Global Economics

Brussels Mulls Crackdown on Car Ads


The EU may regulate auto advertising. German manufacturers and media warn the financial effects could be devastating

The European Union bureaucracy is on a roll: After imposing restrictions on how tobacco, alcohol and food products can be advertised, it has set its sights on gas-guzzling cars. But German manufacturers and media conglomerates warn the financial impact could be devastating.

Only a select few VIPs are allowed to park on the paved lot directly next to the entrance to the enormous Berlaymont building in Brussels, the headquarters of the European Commission. The luxury sedans lined up in the parking lot include Audis, BMWs, Jaguars and Mercedes. The chauffeurs keep the engines running in the winter to stay warm, and in the summer to keep their energy-consuming air-conditioning systems going.

The contents of the Berlaymont's parking lot are especially impressive on Wednesdays, when European Commission President José Manuel Barroso and the 26 European Union commissioners gather around the conference table on the 14th floor. They often discuss climate protection, and what ought to be done to promote it.

To buck the trend, Commissioner for the Environment Stavros Dimas has chosen a Japanese hybrid known for its low emissions as his official vehicle. His position apparently makes this practically a requirement, but he's the exception rather than the rule. His fellow commissioners see no reason to revise their automotive preferences. "We commissioners travel a lot," says one of them, "and we need large, comfortable and fast cars."

Though clearly a topic that they have no serious interest in pursuing when it comes to their own luxury sedans, the commissioners are poised to tackle the issue in a way that will affect everyone else in Europe. Europe's lawmakers want to restrict and regulate automobile advertising. Their hope is that most drivers will lose interest in large cars and finally turn to more frugal models.

The Commission plans to reveal its new proposals by the end of the month and, on June 5, discuss them with industry representatives and politicians for the first time. Although the details are still deeply controversial within the Commission, the general direction is clear. The central element is a requirement to clearly highlight gas mileage and CO2 emissions in large type in every magazine or newspaper ad, on every billboard and in every television ad. Any references to sportiness and Fahrvergnügen would be frowned upon. According to an EU strategy document, the plan is about nothing less than "rebuilding society" and "changing habits in consumption and production."

French and Italian makers of small cars are likely to welcome the plan with open arms. German automakers and the advertising industry that depends on them, on the other hand, are about to go on the warpath. Such restrictions, they argue, mean they might as well cancel their advertising altogether. Publishing industry executives like Bernd Kundrun, chairman of German publishing company Gruner+Jahr, fear "dramatic consequences" for print media if automotive ads are eliminated. In a softening ad market, car ads make up about 20 percent of advertising revenues for many magazines, including SPIEGEL.

There are many good arguments for quickly and substantially reducing gasoline consumption and vehicle emissions. The world's oil wells will eventually run dry, and toxic emissions contribute to environmental and climate catastrophes. But what is so controversial is the approach the EU is taking to solving the problem. It has led many, including Volker Nickel, the German Advertising Industry Association's spokesman, to complain about "constant new regulations and more and more government control."

These misgivings don't just apply to cars. The Brussels Eurocracy, hoping to improve its image among citizens on issues of consumer and environmental protection, is assuming more and more competencies. Advertising, production and sales restrictions for toys and lighters, tobacco, alcohol and many food products are either already in place or in the works.

From breakfast cereal to Coca-Cola, everything is being classified as being either good or bad for citizens, who apparently have lost the ability to make that judgment on their own. Brussels, says advertising executive Nickel, is staging "a gigantic reeducation program for consumers and producers."

Last summer, for example, complex rules were introduced to regulate the way food producers advertise their products. A central register with officially-sanctioned phrases is even in development for language that includes health claims, such as "Builds Immunity" or "Keeps you in Good Shape." Once the register is complete, alternative expressions will no longer be allowed.

Wernhard Möschel, a law professor at the University of Tübingen in southwest Germany, is incensed over the way the EU's producers of rules and regulations treat the consumer "as a pathological idiot in need of supervision, as someone who can't tell the difference between red and white wine."

In fact, the alcohol industry is beginning to feel the heat as a result of this new regulatory zeal. So-called voluntary restrictions agreed to by the manufacturers, the advertising industry and EU market regulators are still in place.

But the text of a rigid ordinance has been drafted and is already sitting in desk drawers in Brussels. It imposes tight restrictions on the sale and advertising of beer, wine and spirits. Labels on bottles of high-proof liquor, similar to the labels on cigarettes packages, will warn consumers of the dangers of drinking, with expressions like: "Drinking harms the liver" or "Alcohol causes disease." Under the new legislation, popular advertising themes, such as vacation and party settings, would be banned. The European Parliament has already ratified the applicable decision, which the Commission will soon follow with specific bans.

Part 2: Moral Terrorism?

And now this "moral terrorism," as Holger Krahmer, a liberal member of the European Parliament, calls it, is about to reach what is perhaps Europe's most sensitive and possibly most important industrial product: the automobile. Legislators hope that strict advertising regulations can achieve what a network of very low speed limit zones, speed limits on most major highways, ever-rising gas prices, taxes and fines could not. In many countries, activists are already drumming up popular sentiment against automobile manufacturers who include only inconspicuous or no information about their vehicles' emissions and fuel economy in their ads. Last fall, the European Parliament came up with a rule critics were happy with: 20 percent of any car ad should be devoted to information about CO2 emissions and fuel consumption.

This information was supposed to be included in ads starting in 1999. According to Appendix IV to Guideline 1999/94, it was to be "easily legible and no less pronounced than the main part of the advertising message" and "easily understood, even when read briefly." But for years the industry paid little attention to the regulation. Environmentalists recently complained to Günter Hörmandinger, the EU official in charge of the planned automobile advertising guidelines, about a particularly egregious example. A seven-meter (23-foot) billboard advertising a luxury car brand printed the required fuel consumption and emissions information in letters just seven millimeters (0.25 inches) tall—in other words, illegible. This sort of thing cannot continue, say the environmentalists.

Such strategies have only given the industry's foes ammunition. Carmakers and their advertising agencies have also failed to take advantage of the opportunity that EU Commissioner for the Environment Stavros Dimas provided for voluntary "self-regulation" to develop a convincing alternative model.

All of this has led to a significant outcry. Executives like VW marketing manager Jochen Sengpiehl say that newspaper advertising would become completely ineffective if it were required to include informational banners or boxes. If ads were "turned into informational material" it would be "highly likely" that companies would be forced to restructure their advertising budgets, Sengpiehl and other executives warn. This would mean a shift away from classic print ads and toward TV commercials or promotional events, which are not subject to any restrictive regulations.

According to Christoph Fiedler of the German magazine publishers' association, this would be a "catastrophe" for print media, especially in Germany. Carmakers spend about €1.5 billion ($2.3 billion) on advertising in Germany, with almost half of that money going to ads in magazines. What Brussels is planning, says Mathias Döpfner, CEO of publishing giant Axel Springer, would be a "major threat to free competition and journalism."

These dramatic warnings of possible economic and political consequences have apparently had their effect on European Commission President Barroso, who prefers to avoid a second car war with Berlin (the conflict over CO2 emissions caps beginning in 2012 has yet to be resolved). It could adversely affect his chances of securing a second term.

This is why his staff have been busy softening some of the proposed advertising guidelines, toning down the most stringent language and requirements, says an EU official involved in the process. Of course, this is only being done for tactical reasons.

In fact, a broad majority of officials on both the Commission and in the European Parliament is convinced that the tenacious pursuit of more and more protections against calories, alcohol and the dangers of driving is both popular and an ethical obligation.

At least, that is, as far as Europeans are concerned. Everyone else in the world can drive at high speeds, smoke and drink to their hearts' content. In fact, to encourage the rest of the world to drink more European wine, Brussels generously subsidizes colorful, happy liquor ads in foreign markets.


Video Game Avenger
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus