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Liquor Ads On Tv: Absolute Folly?


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LIQUOR ADS ON TV: ABSOLUTE FOLLY?

The new foray may create a backlash against all alcohol ads

It doesn't look like one of the all-time shrewd political moves. Hours after U.S. liquor companies announced on Nov. 7 that they were lifting a 48-year-old self-imposed ban on television and radio advertising, the backlash had begun. Federal Communications Commission Chairman Reed E. Hundt threatened new regulation. In his weekly radio address, President Clinton on Nov. 9 compared alcohol companies to tobacco makers and called on company executives to "get back on the ban." Senate Majority Leader Trent Lott (R-Miss.), in a rare instance of bipartisan unanimity, agreed. Even the people who would seem to benefit most--network and cable-TV executives--said liquor advertising had no place on TV.

So what were the spirits companies thinking, anyway? Blame desperation. Their assault on the airwaves is driven by a two-decade drop in liquor consumption. In contrast, wine- and beermakers, which rank among TV's biggest advertisers, have seen sales jump during the same period.

BEST SHOT. Distillers figure their best shot at reversing the decline lies in attracting Generation X consumers. So they've spent millions on new print campaigns aimed at them. But nothing reaches that group as well as television, and when the Supreme Court unanimously struck down Rhode Island laws limiting liquor advertising, executives saw an opening. The May 13 landmark ruling, 44 Liquormart, Inc. vs. Rhode Island, makes it hard for lawmakers to restrict truthful commercial speech.

With cigar and martini bars rising in popularity, liquor companies now see a historic opportunity. "In the 1980s, we were on the outside looking in," says Gary Clayton, marketing director for Beefeater Gin. "In the '90s, we're a part of the culture."

Even if efforts to get on television fail, spirits makers still could come out ahead. In the current political climate, regulators may end up cracking down on all alcohol ads. That, at least, would level the playing field--although the loss of beer and wine ad dollars would be a big blow to networks and televised sports. "It's a win-win situation for the [liquor] industry," says Roy D. Burry, beverage analyst at Oppenheimer & Co.

The argument is simple: Alcohol is alcohol. Wine, whiskey, or six pack, they all do the same thing--and should be subject to the same advertising rules. Liquor executives also insist that their TV advertising will follow voluntary guidelines avoiding images and time slots that appeal to kids.

That could be a hard promise to keep, because nearly every major brand is trying to win over young consumers. Consider Spin magazine. Forty-eight percent of the hip music magazine's readers are under 21, according to data used by ad executives. That audience is much younger than the nation as a whole, in which 30% of residents are underage. Yet the back cover of the December issue carries an ad for V.O. Seagram Co.'s Absolut Vodka, and inside pages are filled with rival ads. Liquor advertising in Allure (with 44% underage readers), Rolling Stone (35%), and others prove Spin is hardly the exception.

Liquor companies say spillover to an underage audience is inevitable. Anti-alcohol crusaders call that argument disingenuous. They say the few TV spots already on the air prove their case: A Seagram ad that has run in Texas depicts two dogs participating in a graduation ceremony. "For the industry to say they're not targeting young people is absurd," says Karolyn Nunnallee, president-elect of Mothers Against Drunk Driving.

Already, the opposition is mobilizing. Within days of the industry announcement, the Center for Science in the Public Interest, a consumer advocacy group, sent out Community Action Kits to 750 groups across the country. Jay R. Stroh, director of California's Alcoholic Beverage Control Dept., says that if liquor ads hit the tube in his state, "people are going to come out of the woodwork" seeking countermeasures that could include an increase in alcohol taxes, point-of-sale restraints, and content restrictions--all of which would hurt the industry even if it wins the fight to get on the airwaves. And Senator John McCain (R-Ariz.) already has announced that if he heads the Commerce Committee, as expected, its first order of business will be to hold hearings on the issue.

Liquor executives remain confident, though. Eventually, says Carolyn Panzer, a vice-president at United Distillers, "people will adjust to the change and see they have nothing to fear." That's one possibility. The other is that this move will bring a whole new round of regulation. But that's a risk the booze business appears willing to take.By David Leonhardt and Mike France in New York, with bureau reportsReturn to top


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