FTC Report Commends Distilled Spirits Industry Group on Advertising Code and Rigorous Standards

WASHINGTON, D.C. – In a major report released today on advertising in the beverage alcohol industry, the Federal Trade Commission recognized the Distilled Spirits Council for its “robust” and effective self-regulatory system.

“This report underscores our dedication to high standards, strict compliance and proactive measures to address the new media landscape,” said Distilled Spirits Council President Peter Cressy.  “The FTC report clearly shows that the spirits industry directs its advertising to adults and is a leader in self-regulation.”

In the report, “Self-Regulation in the Alcohol Industry,” the FTC specifically recognized DISCUS for its self-regulatory actions.  Among the highlights in the report:

  • “The Commission commends the industry for its adoption, in mid-2011, of a 71.6 percent 21+ standard for new advertising purchases, and it expects all industry members to adhere to this new standard.”
  • “The Commission commends efforts, such as the DISCUS ‘Media Summits,’ that bring together representatives of spirits, beer, and wine companies, as well as demographic services, new media outlets, and representatives of companies that provide compliance tools.”
  • The FTC cited DISCUS for proactively issuing guidelines for marketing practices on digital media and adopting provisions related to privacy and information security.
  • The FTC noted that self-regulatory systems “are most effective when consumers and competitors take advantage of them and submit complaints, as demonstrated by the DISCUS experience.”

The report, an in-depth analysis of marketing placements and expenditures, found that over 93 percent of all placements – television, radio, print, and digital/online –met the 70 percent 21 plus demographic standard, which was the placement standard at the time.  In fact, more than 97 percent of total advertising impressions met the 70 percent standard.  For online and other digital media, 99.5 percent of alcohol ads met the 70 percent standard.

The FTC encouraged the industry to develop more consumer-friendly privacy policies; use 6 plus audience demographic data for radio that has now become available for larger markets; and also encouraged state regulatory authorities, consumer advocacy organizations and others to use the industry’s complaint review system.

“DISCUS will give careful consideration to the recommendations in the report,” said Cressy.  “Key to our Code’s success is the willingness to adapt to the changing marketplace and new technology.”

The FTC underscored its support for self-regulation stating that “a self-regulatory regime has several advantages over government regulation,” noting that it “is more prompt and flexible than government regulation.”

Importantly, the FTC said that “teen alcohol use and binge drinking have significantly declined since 1995.”  The FTC noted that “limiting youth access to alcohol is a highly effective way of preventing underage drinking” and pointed to government research showing most teens obtain alcohol primarily through non-commercial sources such as an unrelated person of legal drinking age or an adult family member.