Liquor Ads on TV: Is Federal Regulation Brewing?

December 20, 2001 • TechKnowledge No. 30

If you’ve watched any television in your lifetime, chances are you’ve seen more than a few beer ads. In fact, some of the most memorable advertisements in the history of the medium have been produced by beer makers, as they vigorously compete for customer allegiance. It’s just another part of doing business for beer companies, which depend on TV ads to build brand name recognition.

But if you’re a consumer who enjoys other spirits besides beer, you might be wondering why you never hear anything on TV about your favorite brands, or even competing liquor products. The reason you do not is because, for the past 50 years, the spirits industry has lived under a voluntary ban on the placement of liquor ads on TV. But as revenues have declined gradually over the past two increasingly health‐​conscious decades, the industry has rethought the wisdom of the ban and began cautiously testing the regulatory climate by placing ads on some local TV or cable stations. The debate over the wisdom of this reversal has been heating up nationally since NBC announced recently that they would allow liquor commercials to run during late‐​evening programming, making them the first national network to do so.

Not surprisingly, a lot of social do‐​gooders are up in arms over this and are demanding that federal policymakers take action to halt the practice. NBC “is shirking its public interest responsibility as a broadcaster by putting its bottom line ahead of the health and safety of young people,” says George A. Hacker, director of the Alcohol Policies Project at the Center for Science in the Public Interest. And Joseph Califano, director of the National Center on Addiction and Substance Abuse at Columbia University, told The Wall Street Journal last week, “The only solution now is for federal regulation, just as we have federal regulation prohibiting tobacco ads on television.”

From a public policy perspective, the fear seems to be puritanical in character: If people see booze ads on TV, they will drink more. Such post hoc reasoning could be challenged on a number of grounds. Specifically, it is difficult to believe that Americans are a mindless herd of robots who will make a mad dash to their local liquor stores just because they see a few TV ads. In fact, Dr. Morris E. Chafetz, president of the Health Education Foundation and author of The Tyranny of Experts, argues that “the claim that advertising can lead anyone down the bottle‐​strewn garden path not only to drink alcohol but to abuse it, is pure hokum.” In the mid‐​90s, Dr. Chafetz conducted a review of academic research for the New England Journal of Medicine on the question of how advertising affected alcohol use. His conclusion: “I did not find any studies that credibly connect advertising to increases in alcohol use (or abuse) or to young persons taking up drinking. The prevalence of reckless misinterpretation and misapplication of science allows advocacy groups and the media to stretch research findings to suit their preconceived positions.”

So even though academic evidence suggests that exposure to advertising is unlikely to increase consumption, liquor companies are still willing to run ads, perhaps in an attempt to build brand recognition or attract beer and wine consumers. The question is, is there anything wrong with that?

The answer, of course, is all a matter of personal opinion. In a free society, however, people should be at liberty to make such choices without government entering the picture. Adults should be responsible for their decisions in this regard and they should exercise authority over their children until they reach an age when they can be trusted to make such decisions on their own. Employing the old “It’s about the children!” defense to support an ad ban doesn’t make sense for other reasons. As my Cato Institute colleague Doug Bandow noted in a 1997 Wall Street Journal editorial, “almost every good advertised on the airwaves may have some inadvertent adverse effect on the young,” whether it is cars, riding mowers, high‐​fat food, or computers. “But that’s no excuse for banning ads,” concludes Bandow.

Moreover, children can see liquor ads in magazines and newspapers too, so should we ban liquor ads in print? Which raises another important question: Why is it that we continue to tolerate an artificial regulatory distinction between print and electronic media? For decades, policymakers have imposed the equivalent of second‐​class citizenship on electronic media (television, radio) in terms of First Amendment protections. Unlike their print counterparts, which receive substantial free speech protections, electronic media face numerous speech restrictions that would be unthinkable for newspapers or magazines. So the next time you see a newspaper editorializing about the need to ban liquor ads on TV, fire off a letter to the editor and ask them how they’d feel about a federal ban on all those liquor ads that appear in the paper’s pages and provide them with substantial revenues.

Anyway, a federal ban on televised liquor advertising would probably not pass First Amendment muster today. In the important 1996 decision Liquormart, Inc. v. Rhode Island, the Supreme Court struck down a Rhode Island ban on the advertisement of retail liquor prices outside of the place of sale since such a blanket prohibition against truthful speech about a lawful product betrayed the First Amendment. As Thomas A. Hemphill, a fiscal officer for the New Jersey Department of State, noted in Regulation magazine in 1998: “That landmark decision makes it much more difficult for legislators to restrict truthful commercial speech, thus establishing a precedent for more stringent evidentiary requirements underlying future advertising regulations. Therefore any new law that imposes a comprehensive ban on television or radio liquor commercials will probably not survive First Amendment judicial review.” The Court bolstered this line of reasoning in the subsequent 1999 decision Greater New Orleans Broadcasting Assn., Inc. v. United States, which declared that the FCC could not ban casino advertising in states where gambling was legal. The Court declared, “the speaker and the audience, not the Government, should be left to assess the value of accurate and nonmisleading information about lawful conduct.” These decisions also suggests that the Court may finally be getting serious about affording commercial speech the same protections granted to political speech, a move that is long overdue.

A final concern about a federal regulatory response to TV ads relates to its potential applicability to the Internet. As television and the Internet increasingly converge and more Americans gain access to broadband connections, it is likely that more and more television programming will be made available over the Net. So any ban on liquor ads on TV would likely have threatening implications for Internet Webcasting in the long run.

In conclusion, there has never been any logic behind the artificial distinction between liquor and other products, such as beer and wine, when it comes to promotional activities. Alcohol is alcohol. Why should the form in which it is delivered change its legal status? And why place advertising restrictions on lawful products at all? If someone was trying to sell crack cocaine or cruise missiles on TV, it might make for a more interesting debate. But alcohol is a legal product that manufacturers have every right to promote. Policymakers need to take a sober look at these realities before they rush headlong into needless and unconstitutional restrictions on liquor advertisements on TV.

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