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Rules & Regulations About Marketing Alcohol

Alcohol is a socially acceptable, fairly cheap, easily accessible, and legal mind-altering substance for those of the lawful drinking age of 21. The National Institute on Alcohol Abuse and Alcoholism (NIAAA) publishes that almost 90 percent of adults in the US report consuming alcohol at some point in life.

Alcohol is considered the most regularly used addictive substance in the United States, the National Council on Alcoholism and Drug Dependence (NCADD) publishes. According to Statistica, alcohol beverage sales in the United States topped $220 billion in 2016.

The multibillion dollar industry spends a lot of money on marketing and advertising their products to the public as well. In the first quarter of 2016 alone, Business Insider reports that alcohol companies spent $421 million dollars on advertising. Around 90 percent of these dollars were spent by beer companies on television ads. Any verbal or written depiction, illustration, or statement that is intended to entice people to buy a product is considered an advertisement. Ads can be spots or commercials on TV; printed in newspapers, magazines, or promotional materials; included on social media; sent via email; or promoted digitally. They can also be signs and billboards, or in the form of promotions in physical establishments.

Marketing and advertising of alcoholic beverages and products in America is regulated under the Federal Alcohol Administration Act (FAA) by the Tobacco Tax and Trade Bureau (TTB), which is hosted by the Department of the Treasury.

Rules Governing Advertisements in the Alcoholic Beverage Industry

The First Amendment allows for a lot of freedom of speech in general and therefore limits how much the federal government can regulate advertising, even in regard to alcohol. In general, advertisements of alcoholic products must be truthful and without deception. They must provide enough information about the identity of the product for the consumer's benefit and for them to be able to make an educated decision about what the product is or what it contains.

TTB does not have to approve ads before they are run or placed; however, they do provide a free voluntary pre-screening service that industry members may use prior to broadcasting or printing their advertisement. TTB reviews complaints from government agencies, the general public, or other industry members to ensure that the advertisement falls within all set rules and regulations. Market compliance specialists within TTB also review advertisements independently to be sure they are compliant.

Alcoholic beverage advertisements differ based on type (beer and malt beverages, wine, and distilled spirits). They are required to provide the following information:

  • Malt beverages and beer:
    • The class the product belongs to (e.g., ale, stout, lager, etc.)
    • Name and address, including city and state, of advertiser
  • Wine:
    • Type, class, and/or distinctive designation that product belongs to (e.g., red wine, sparking wine, white wine, champagne, etc.)
    • Name and address, including city and state, of advertiser
  • Distilled spirits:
    • The class and type of product (e.g., whiskey, vodka, flavored spirits, etc.)
    • Alcohol content listed as percent by volume
    • Name and address, including city and state, of advertiser
    • If applicable, name of commodity and percentage of neutral spirits must be included

There are also specific things for each type of alcoholic product – wine, malt beverages, and distilled spirits – that are prohibited to be included in advertisements. General prohibited practices for alcoholic advertisements include:

  • Statements that are misleading, false, or untrue
  • Saying something negative or disparaging about a competitor
  • Indecent or obscene representations, designs, or statements
  • Misrepresenting analyses, standards, or tests
  • Guarantees that are misleading, excluding money-back guarantees
  • Statements falsely heralding the health benefits of alcohol
  • Claims that alcohol is made, sold, or marketed under federal or state regulation
  • Words "bonded" or basically insinuating that alcohol is made under government supervision
  • Claims that wine or malt beverages contain distilled spirits
  • Statements about distilled spirits being "double" or "triple" distilled unless they really are
  • The word pure when advertising distilled spirits, unless it is referring to a specific ingredient
  • Statements that are not consistent with approved labeling

Promotions and discounts are often popular ways to encourage a person to buy a product, and alcoholic beverages are no exception. Drinking establishments, such as bars and restaurants, often host "happy hours," daily drink specials, or "mug clubs," or run other promotions to enhance sales. There are often state regulations about what establishments can and can't do regarding these promotions. For instance, daily drink specials are generally limited to one type of alcoholic beverage per day; happy hour may not exceed a certain number of hours per day or week; all drink promotions must end by midnight; and no alcohol is to be discounted between 12 a.m. and 2 a.m.

A mug club can't give free drinks as an incentive for signing up, and in general, establishments can't attempt to induce people to purchase alcohol through these promotions. An establishment cannot offer incitements of value for purchasing alcoholic beverages either. Items and giveaways that are less than $15 or so are generally allowed, however. Free drink promotions are prohibited as are contests and games that encourage binge drinking, drinking in general, or that offer drinks as prizes.

States may have rules that do not allow establishments to sell an unlimited amount of drinks to a person, or group of people, for a fixed price either. Licensees selling alcohol for consumption on the premises are also not allowed to sell alcohol to people who are visibly intoxicated, so promotional events are often discouraged by state regulations. Different states may have variable rules and regulations regarding discounts on alcohol and promotions run by drinking establishments for marketing it.

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Self-Regulation of Alcohol Marketing

Many of the regulations and rules surrounding the advertisement of alcoholic beverages are self-imposed and voluntary on the federal level. States may have specific rules, however.

In general, the majority of alcoholic advertisement regulation surrounds underage drinking and the marketing of alcohol to those too young to legally consume it. Alcoholic beverage companies and the advertising industry generally agree to self-regulatory standards designed to discourage underage drinking based on ad placement or content. The FTC publishes that most alcohol advertisers agree to not appeal to an audience under the age of 21 and that no more than 28.4 percent of the audience of said ad be underage.

There are three major alcohol supplier trade associations: the Distilled Spirits Council of the United States (DISCUS), the Beer Institute (BI), and the Wine Institute (WI). These three associations have adopted regulations regarding advertising that are entirely voluntary in order to discourage underage drinking.

The Centers for Disease Control and Prevention (CDC) publishes that alcohol is the most widely used drug by American youth and that more than 4,000 underage youth die every year from causes related to excessive drinking. In 2010, nearly 200,000 people under the age of 21 were treated in emergency departments (EDs) for alcohol-related injuries or conditions.

Underage drinking is a serious public health concern, and alcohol advertisement seeks to address this issue by not contributing to the problem. Advertisers of alcohol review demographic data before placing ads in order to attempt to ensure that 70 percent or more of the audience is of legal drinking age, the FTC reports. Physical advertisements are not to be placed near schools, public playgrounds, churches, or where there is a lot of underage traffic, for instance. Some states have regulations stating that print advertisements for alcohol must be at least 500 feet from these locations. Civic events, such as college sporting events, fairs, and other events that have large underage audiences may also have state-based regulations regarding alcohol marketing. Alcohol advertising is not to target minors, either by using images or age-directed marketing ploys that may intentionally attract younger consumers, such as depicting Santa Claus.

These self-adopted regulations also apply to digital media, and many alcoholic beverage companies have age-related safeguards in place on their websites and within their marketing communication procedures. One such example is an "age gate" that attempts to verify that a consumer is of legal drinking age before allowing them to enter the landing page of an alcohol company website. Cookies are also used to track users of the site and to analyze site traffic. Registration forms that must be filled out with a legal drinking-age birthday are often an additional required measure to obtain more marketing information from an alcoholic beverage company. Some companies even use third-party age-verification systems as well.

States may also have specific rules and regulations regarding signs and advertisements that are visible in retail establishment locations, the Center on Alcohol Marketing and Youth (CAMY) publishes. Retail windows are often coded and regulated since they are so visible to passersby. States often regulate how much of the window is allowed to be used for alcohol product marketing, for example.