The Federal Trade Commission (FTC) recently announced that it sent compulsory process orders to 14 beer, wine, and distilled spirits manufacturers, requiring them to provide data for the agency’s fourth major study on the effectiveness of voluntary industry guidelines in reducing advertising and marketing to underage audiences.
Specifically, the FTC has asked various major alcoholic beverage advertisers – including Anheuser-Busch Companies, Inc., Bacardi USA, Inc., and Heineken USA, Inc. – to provide the Commission with information about their Internet, digital marketing and data collection practices, advertising expenditures and placements, and general business practices.
The alcohol beverage industry imposes its own regulatory guidelines on advertising and marketing by alcohol manufacturers to underage audiences. For example, the Beer Institute’s product placement guidelines recommend that “Brewers discourage underage drinking and do not intend for their products to be purchased or consumed illegally by people below the legal drinking age. Consistent with that philosophy, Brewers will not approve product placement which portrays purchase or consumption of their products by persons who are under the legal drinking age.” The Wine Institute’s Code of Advertising Standards contains similar provisions to prevent product placement in advertisements appealing to underage consumers. Likewise, the Code of Responsible Practices of the Distilled Spirits Council of the United States prohibits product placement directed toward underage consumers.
Recommendations from the FTC’s prior 1999, 2003, and 2008 studies have led industry trade groups, including the Beer Institute, the Wine Institute, and the Distilled Spirits Council of the United States, to implement “an improved voluntary advertising placement standard; media buying guidelines for placing ads on radio, in print, on television, and on the Internet; a requirement that suppliers conduct periodic internal audits of past placements; and systems for external review of complaints about compliance.”
To read the FTC’s press release about the recent study, click here.
Why it matters: What sets the latest FTC study apart from previous studies on the effectiveness of voluntary industry guidelines is that this is the first time the agency has requested information on Internet and digital marketing and data collection practices. In so doing, the FTC appears interested in determining what, if any, impact digital marketing is having on the self-regulatory efforts of the adult-beverage industry.
On a broader front, the compulsory process orders signify the FTC’s regulatory and enforcement authority as the nation’s chief consumer protection agency. The Commission is sending a clear signal to all industries and their trade groups that self-regulation is prudent and necessary to protect consumers and foster a collaborative relationship with federal and state regulators. This is especially true in the age of digital marketing.