NBC and Liquor Ads

RAY SUAREZ:

We begin with a look at how alcohol and television will mix in 2002. Media correspondent Terence Smith has that story.

TERENCE SMITH:

For the first time in over 50 years, advertising for distilled spirits will appear on a national broadcast network: NBC.

FROG, in advertisement:

Bud.

TERENCE SMITH:

As opposed to beer and wine ads, long a highly- profitable staple of television advertising…

LIZARD, in advertisement:

Frogs sell beers. That's it, man, number one rule of marketing.

TERENCE SMITH:

..Ads for so-called "hard liquor" have been off the national airwaves since 1948, when the liquor industry imposed a voluntary ban. But that has been changing. Local television stations have accepted and run ads for spirits since 1996. The end of the national ban came as a result of a negotiated agreement between NBC and distillers that will permit the gradual return of liquor ads to the national airwaves. The first ad appeared during a recent edition of "Saturday Night Live."

AD SPOKESMAN:

One of the best ways to have a great time this holiday season is…

TERENCE SMITH:

Sponsored by Smirnoff, it is the first in a series of ads, required by the new agreement to run over four months that urge responsible drinking. After that, more direct ads for products will appear.

Critics immediately challenged NBC's decision. Joseph Califano, head of the National Center on Addiction and Substance Abuse, blasted the ad guidelines and said NBC's decision was intended to "self- medicate its bottom line." And Virginia Congressman Frank Wolf recently asked regulatory agencies to examine the new policy and said he was prepared to introduce legislation to ban the advertising altogether.

Distilleries and industry advocates counter the criticism by citing studies that they say dispute the notion that ads will increase problem and underage drinking. In addition, they say the guidelines they have imposed upon their advertising are very strict mandating that the ads feature mature actors, no visible consumption of alcohol, and no cartoon characters. The ads will also run later in the evening when underage viewers are less likely to be watching. The ad controversy is likely to heat up once Congress returns in late January.

TERENCE SMITH:

To further discuss the NBC decision we're joined by Congressman Frank Wolf, Republican of Virginia, who has challenged the new policy, and by Dr. Peter Cressy president of the Distilled Spirits Council of the United States, an industry advocacy group. NBC, incidentally, declined an invitation to join the discussion. Gentlemen, welcome to you both. Congressman Wolf, what's the problem with these ads?

REP. FRANK WOLF:

Well there's been self- regulation for 52 years, and we are now beginning to make progress with regard to doing away with teenaged and drunk driving. The Congress just passed a 0.08. To bring this advertising back in at this time, we believe will bring a lot of increase in drunk driving, increase in teenaged suicide, increase in homicide and will create many, many problems. So we're hoping that the Congress does not have to get involved in this issue, that NBC will go back and implement the policy that ABC has, CBS has and Fox News has and have a self- regulatory ban and not force the Congress into action.

TERENCE SMITH:

Peter Cressy, how important are these ads, nationally television ads, to the industry?

PETER CRESSY:

Well, we feel we're a very, very responsible industry, Terry. We've had the toughest code of good practice for over 60 years in the industry, and I think this new set of guidelines which NBC and UDV Guinness have put together are really exemplary and, in some ways, they really deserve a lot of credit. They are important. Quite clearly, when one looks at the literature, there is virtually no impact on the decision to begin drinking or the decision to drink more as a result of advertising.

TERENCE SMITH:

Now that's not what the Congressman suggests. He suggests it will affect it.

PETER CRESSY:

I know he does, and I appreciate it. I have a great admiration for the Congressman. I've been a northern Virginian now for about 20 years, but in point of fact the 1990 HHS Special Report to the Congress, the year 2000 special report to the Congress which reviews all of the available literature– Fisher, Atkins, all that group– makes it clear that it doesn't have an impact on a child's decision to drink, and we don't want it to have an impact. That's exactly why we set such tough standards.

TERENCE SMITH:

What do you think the evidence is that it does?

REP. FRANK WOLF:

Well that's laughable that it doesn't have any impact because that's why they run the ads. The Prevention Research Center at the University of California, Berkeley, said alcohol advertising seems to increase use positive attitude and likelihood to drink and nearly 70 percent of the American people believe that. They want to run the ads so young people will move and begin to drink. And if you begin to drink at an early age, there's a greater likelihood of drug abuse, greater likelihood of alcoholism, greater likelihood of homicide, greater likelihood of suicide, the break-up of the family. So they want to advertise. It's an indication of unbridled corporate greed whereby they want to bring young people in. The same thing happened with regard to smoking. There was a ban on smoking, and we're beginning to have fewer and fewer people smoking. They now want to do the same thing.

TERENCE SMITH:

A ban on smoking ads.

REP. FRANK WOLF:

NBC ought to rescind this.

TERENCE SMITH:

That's what you've asked them to do. Have you gotten any response?

REP. FRANK WOLF:

They have not had the courtesy to answer.

TERENCE SMITH:

Okay.

PETER CRESSY:

Look, I want to be absolutely clear about this. There is nobody in this industry that wants to get young people to drink. We're aiming this, really, at a very adult population. That's why all the models are going to be 30 and over, that's why it's going to be in the evening. That's why one in five is going to be a serious responsibility ad. We're deadly serious about that. The last thing any of us want, as parents and as grandparents, is to have any young kid influenced by these things.

TERENCE SMITH:

Why change the policy now? If in fact it's been this place for all these, years why change it now?

PETER CRESSY:

Look, as you well know since 1980 our industry has lost a lot of market share to beer and wine. Beer has gone from 53 percent market share to 59 percent. Wine has gone from about 10.5 percent to about 12.2 percent. And our share of the market has gone from about 36 percent to about 28 percent, all the while that overall per capita consumption in the United States has gone down. So it's become very, very clear when you put the facts together, that the advertising does not impact people's decision to drink more.

TERENCE SMITH:

Now they say they want to sell more liquor, which is reasonable enough. NBC of course wants to sell more ads. What's wrong with that?

REP. FRANK WOLF:

Well, what they say is not accurate because they will show it at 8:00 Central Time. Secondly, anyone….

TERENCE SMITH:

And you argue that young people will be watching.

REP. FRANK WOLF:

Anyone who understands… I have five children. Anyone who has teenagers will tell you… Tell you that many of the shows they're watching are at 8:00, 9:00, 10:00. And many times young people in college are watching the Jay Leno Show. It is really not accurate what NBC is saying. As I said, it's just a matter of corporate greed. Every weekend, every hour on the hour, a teenager dies in an automobile accident. 50 percent of those deaths are the result of alcohol. If they begin to run these ads, moms and dads who never know about it will get those telephone calls potentially saying, "This is the Virginia State police. We have your son or your daughter and there's been a major accident." We're saying we're now beginning to make progress against youth drinking. Let's not run these ads and change the whole dynamics which we currently have.

PETER CRESSY:

Look, the Congressman suggests that this is going to result in more drunk driving of under aged, and yet during an era of unprecedented advertising by beer and wine, in point of fact, deaths, fatalities due to drunk driving of youth, have gone down nearly 60 percent at a time when the population is growing. If you look at it in terms of the number of deaths per 100,000, it's even more dramatic. So it's simply by the fact isn't true. Look, I stand with the Congressman totally, and so does my industry, in arguing that the last thing we want to do is influence these kids. That's why we've put $120 million into the Century Council to fight these kinds of things.

TERENCE SMITH:

All right. Congressman, what can you do about it from where you sit and through the regulatory agencies.

REP. FRANK WOLF:

Well, we have the support of a number of members of Congress. I have written Secretary of Health and human services asking him to speak out. I think Tommy Thompson has to be involved in this. We have also contacted the FCC. I've spoken to Commissioner Powell on this issue. We're also contacting the Federal Trade Commission, asking them to look at this. I've spoken to members of Congress on both sides of the aisle at the press conference we had on the day that we recessed, adjourned, Congresswoman Roybal-Allard from California joined me, Congressman Ed Markey who is the ranking member on that sub committee. So we're going to begin to bring the Congress into this, hold extensive hearings. But our hope would be that that wouldn't be necessary. Our hope would be that NBC would be responsible, that they would go back and implement the policy. And they recognize this. They were a good corporate citizen. For 52 years, they had this policy. We would ask them in the interest of being responsible, they would go back and put that policy in without the Congress coming in and begin to pass the legislation.

TERENCE SMITH:

Is this a concern, the idea of the Congress coming in for the industry?

PETER CRESSY:

Well, obviously since in 1999, the FTC report lauded all three segments of the industry, beer, wine and spirits for the excellence of their self-regulatory approach. We don't feel it is appropriate to make any distinction between beer, wine and spirits. Since the science supports us on that, we think it's important. But perhaps even more interesting, Terry, is just this last year, the U.S. Court of Appeals, the 10th Circuit in Utah, found that the Utah laws prohibiting spirits and wine advertising but allowing beer advertising drew an irrational distinction between the different types of alcohol.

TERENCE SMITH:

An irrational distinction?

REP. FRANK WOLF:

On average, young people begin drinking at about age 13. Some even start earlier. 40 percent of college students are binge drinkers.

TERENCE SMITH:

What about the distinction that he's talking about?

REP. FRANK WOLF:

But they're going to open up the floodgates because if NBC does it, ABC may come in. If ABC does it, CBS may do it. Fox may very well do it. And pretty soon, these college kids and high school kids that are watching these shows will be seeing liquor ads. They'll be seeing them on the Olympics. They'll be seeing them on ballgames. They'll be getting a retired ball players to advertise. You know what they'll do. As a result of that, more parents will get that telephone call saying there's been an accident somewhere. We're asking NBC to be responsible — to go back to the self- regulation that they recognized for over 52 years.

TERENCE SMITH:

Smith: Okay. Final word?

PETER CRESSY:

Congressman, we will not use athletes. We will not use cartoon characters. We want to hold all of us to a very, very high standard and clearly if beer and wine can be on television, then certainly we should be allowed to, provided we maintain very high standards and I promise you we will.

TERENCE SMITH:

Okay. Dr. Cressy, Congressman Wolf, thank you both very much.