Self-Regulation

Our Thinking

Our brands can help people enrich and enjoy life. Their popularity also gives us the opportunity to responsibly market—as well as to market responsibility by using the influence of our marketing and advertising messages to promote and educate about responsible consumption.

Since 1999, we have adhered to The Brown-Forman Marketing, Advertising, and Promotional Policy, which mirrors all of the provisions in the DISCUS and Wine Institute codes and goes above and beyond them in key ways. For instance, in 2006, we took an independent stand on advertising placement, committing to plan our media placements to deliver total impressions at an average of at least 80 percent legal drinking age. In addition, in 2009, wedeveloped a more user-friendly format called “B-F Marketing Dos and Don’ts” to assist our employees in understanding and applying the Code in real-world situations.

We maintain a strong commitment to self-regulation, responsible marketing and advertising – and the marketing of responsible drinking patterns and behaviors.

As part of the Global Actions on Harmful Drinking commitments, we will work to implement the targeted actions relating to strengthening and expanding marketing codes of practice.

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MORE SPECIFICALLY, BROWN-FORMAN SUPPORTS AND ENCOURAGES:

Through continued self-regulation, a strong commitment by all beverage alcohol companies that they will direct their marketing only to people of legal drinking age in any given market

We believe the most recent FTC report affirms the important role that voluntary codes play in balancing the rights of advertisers to talk to their consumers with the need to ensure that those under the legal drinking age are not the targets of such advertising.

The development of marketing codes where they do not already exist and the continual improvement of codes where they do
  • Organizations such as The Portman Group in the U.K., the International Alliance for Responsible Drinking, DSICA in Australia, spiritsEUROPE (formerly EFRD), and World Federation of Advertisers (WFA) offer resources to help guide groups through the process of establishing a self-regulatory framework.
  • Existing or new codes can and should stay current with technology and communication advances, respond to changes in social norms, be transparent regarding complaints and complaint resolution, and have robust review processes internally and externally.
Broad commitment by beverage alcohol companies to timely review of advertising complaints and timely action in response to claims found to have merit
  • A criticism of self-regulation is that some companies do not respond to advertising complaints in the manner called for by marketing codes. Companies that ignore complaints do a disservice to consumers, communities, and the majority of companies working in earnest to uphold self-regulatory marketing codes.
  • Enforcement is best achieved through transparency and turning the “spotlight” on those companies who choose to ignore complaints.
In markets where government and/or industry efforts have not been effective, consideration of adopting co-regulation approaches

Using such a model, government and the beverage alcohol industry can work in concert to promote responsible drinking—and discourage irresponsible drinking–with clear, easy-to-understand standards as well as sanctions and penalties.

Responsible retailing which honors industry and company codes.

Responsibility messaging and responsible practices should be consistent at all points of the supply and distribution chains.

A collaborative, industry-sponsored effort to establish a repository of “best practices” with regard to responsible marketing.

This should also include best practices focused on marketing responsibility in drinking patterns and behaviors.

  • The beverage alcohol industry is one of the most heavily regulated industries in the world. This regulation takes a number of forms, ranging from taxation to labeling requirements and limits on when, where, and how beverage alcohol may be sold and served, to regulations focused on the marketing of beverage alcohol. This latter category of regulation—pertaining to the responsible marketing of beverage alcohol—is the focus of this Issues Forum entry.

  • OVERVIEW

    Just as the beverage alcohol industry is one of the most heavily regulated industries in the world, beverage alcohol marketing is one of the most highly regulated forms of commercial communication in the world.

    In many countries, advertising for beverage alcohol (as well as for many other products and services) has been subject to self-regulatory rules for many years. A recent survey of 22 European countries found that 21 of them, including all EU member states, have developed self-regulatory systems which govern alcohol advertising.1 In particular, the European Advertising Standards Alliance (EASA) is dedicated to acting as a single voice on advertising self-regulation issues, and promoting high ethical standards in commercial communications by means of effective self-regulation.

    spiritsEUROPE acts as the European representative body for producers of spirit drinks. Their membership comprises 31 national associations representing the industry in 26 countries as well as a group of leading spirits producing companies. In April 2012, spiritsEUROPE adopted EU-wide guidelines for the development of responsible marketing communications. They are the first key deliverable of the spiritsEUROPE ROADMAP 2015 (a commitment to the European Alcohol and Health Forum). The guidelines come as an addition to the general principles of responsible marketing communications covered in the ICC Code of Advertising and Marketing Communication Practice.

    The Portman Group has its own code of practice in the U.K. The Distilled Spirits Industry Council of Australia (DSICA) has a code of practice as well.

    In the United States, the Distilled Spirits Council of the U.S. (DISCUS) has a voluntary Code of Responsible Practices for Beverage Alcohol Advertising and Marketing. The Beer Institute and The Wine Institute are also separate trade associations and both have their own Codes of Responsibility.

    Such systems operate in various governmental and regulatory contexts and vary according to country. In Kenya and Norway, for example, alcohol advertising on billboards and television is banned altogether. In Ireland, spirits advertisements on television and radio are prohibited, as is the broadcasting of alcohol advertisements before sports programs. In France, there is a ban on alcohol company sponsorships of sports events, as well as alcohol (and other retail sector) advertising on television. (A complete review of industry codes can be found on the International Alliance for Responsible Drinking website at www.iard.org2.) In addition, changes in regulation activity, including self- and co-regulation strategies, continue to emerge. (See Appendix I for details by country.)3

    EVIDENCE REGARDING BEVERAGE ALCOHOL ADVERTISING AND DRINKING PATTERNS

    The marketing of beverage alcohol is a topic which has attracted a great deal of research, as well as media attention. In particular, there has been significant focus on the relationship between marketing and alcohol consumption by young people.

    With regard to both underage youth and adults, the research evidence does not show a causal relationship between overall alcohol marketing and drinking levels or harmful drinking patterns.4 According to the U.S. National Institute on Alcohol Abuse and Alcoholism (NIAAA), “When all of the studies are considered, the results of research on the effects of alcohol advertising are mixed and not conclusive.”5

    On the one hand, there is research which shows that parents, and to some extent peers—not advertisements—are the most powerful factor in young peoples’ decisions to drink (and if they do drink, how and to what extent). Moreover, the research tends to show that advertising by alcohol producers largely affects market share for particular brands and substitution between brands. In other words, advertising has not been shown to increase consumption levels, either amongst adults or youth—but rather, has a documented impact on the extent to which certain products and brands are preferred and consumed, versus other products and brands.6

    On the other hand, there are recent longitudinal studies which show a modest correlation between advertising and alcohol consumption by underage youth and young adults who are of college age.7 For example, one study found that 12-year olds who are highly exposed to alcohol advertisements are 50 percent more likely to start drinking in a year’s time, compared to youth of the same age who have light exposure to alcohol advertisements.8 The methodologies of these studies have been criticized, and the authors of one study have acknowledged limitations in inferences which can be drawn because “unmeasured confounders cannot be adjusted for and can result in biased findings.”9

    In addition, the research consistently identifies the strong influence of parents and family environment with regard to young peoples’ drinking, as well as peer influence.10

    SELF-REGULATION CODES: WHAT THEY ADDRESS AND HOW THEY WORK

    Various industry and company self-regulatory codes address matters such as ad placement (where the ad is seen) and content (what is contained in the ad itself), responsible consumption messaging, the percentage of any given audience which may be comprised of underage youth, requirements for the vetting of marketing campaigns, and pressure for the withdrawal of advertisements determined to breach codes of best practice.

    For example, with the DISCUS Code in the U.S., a Code Review Board provides a mechanism for any complaints or inquiries regarding all advertising and marketing materials that are subject to the Code.11 The results of these reviews are published semi-annually.

    Two key elements of self-regulatory codes are industry standards for ad content as well as ad placement. Content standards in the U.S. include commitments similar to those found in the Brown-Forman Marketing, Advertising, and Promotional Policy, which, among other things, specifies that:

    • Ads should not feature children, cartoon figures, or anything that appeals primarily to persons below the legal drinking age.
    • There should be no suggestion that alcohol use represents a “rite of passage” to adulthood.
    • There should be no suggestion that drinking alcohol is a means to attain success.
    • Ads should not depict situations in which beverage alcohol is consumed excessively or irresponsibly.
    • Models and actors employed must be a minimum of 25-years old and appear to be at least 21-years old.
    • There should be prominent responsibility statements in all advertising initiatives.

    Examples of such responsibility messaging include:

    • “Keep your judgment pure. Drink responsibly.” —Finlandia
    • “Drinking responsibly is the calling card of a gentleman.” —Gentleman Jack
    • “Celebrate responsibly.” —Korbel

    The industry standard for ad placements is to direct marketing to only adults of legal drinking age, and to advertise only in media with audiences that are at least 70 percent legal drinking age or older.12 (Brown-Forman has taken an additional step of planning our placements to deliver total cumulative impressions by brand and by media to average at least 80 percent LDA audience. For more information, see http://www.brown-forman.com/responsibility/.)

    CO-REGULATION

    Co-regulation is self-regulation in the context of other, external regulation or monitoring—for example, legislative and governmental regulation. Under the co-regulation model, alcohol producers are committed to active and effective self-regulation and, at the same time, are also monitored by independent bodies and/or are expected to comply with codes and regulations established and enforced by outside agencies and authorities. For example, in Australia, under a co-regulatory model, the Alcohol Beverages Advertising Code (ABAC) was developed in conjunction with the federal government, the Australian Consumers Association and the Australian Competition and Consumer Commission. Australia’s four major beverage alcohol industry associations have committed to abide by the Code and the decisions of the ABAC Complaints Adjudication Panel.13

    THE EFFECTIVENESS OF SELF-REGULATION

    Some critics suggest that self-regulation mechanisms evoke the proverbial fox guarding the henhouse: Why trust beverage alcohol companies to accurately gauge compliance with their own codes of conduct?

    In June 2008, the Federal Trade Commission (FTC) released its third report examining the beverage alcohol industry’s efforts to reduce the likelihood that its advertising will target those under the legal drinking age. The most recent FTC report found that more than 97 percent of total alcohol advertising impressions of the 12 DISCUS member companies were in compliance with the 70 percent standard. The report also noted that all three segments of the alcohol industry (wine, beer, spirits) have adopted systems for third-party review of advertising complaints.14

    In Europe, since 1995, the industry has commissioned compliance monitoring with law and codes in a large number of EU countries. Compliance rates have consistently been above 93 percent, and the most recent assessment reflected a 95 percent compliance rate across 19 EU member states.15

    APPENDIX I
    CHRONOLOGY OF SELF- AND CO-REGULATION ACTIVITIES WORLDWIDE: EXAMPLES OF RECENT ACTIVITY

    Africa. In an effort to support self-regulation in the alcohol beverage industry on the African continent, the International Alliance for Responsible Drinking organizes a regional workshop on self-regulation in Cape Town, South Africa. Over 60 participants from 13 countries in the region participate. (2006)

    Australia. The Australian Associated Brewers, Distilled Spirits Industry Council of Australia, Liquor Merchants Association, and Winemakers Federation of Australia agree to abide by new Alcohol Beverages Advertising Code. (April 2004)

    Belgium. A convention on alcohol marketing is signed by representatives of all Belgian producers, distributors, and retailers, with the endorsement of the Ministry of Health. Complaints about alcohol beverage marketing will be considered by the Jury for Ethical Practices in Advertising (with consumer representation). (March 2005)

    Brazil. The National Council for Advertising Self-regulation announces new guidelines on advertisements for alcohol beverages, including tighter rules regarding young people and association of alcohol consumption with sexual success. (September 2003)

    Cameroon. The National Advertisement Council introduces proposals to enable tougher scrutiny of alcohol beverage advertising. (June 2005)

    European Union. In a study initiated to measure industry compliance with its own self-regulation initiatives, the European Advertising Standards Alliance (EASA), reports a 95 percent compliance rate across 19 EU member states. (2008)

    European Union. The European Forum for Responsible Drinking (EFRD) adopts “Guidelines for Commercial Communications on the Internet, for Digital and Mobile Marketing.” (2009)

    Germany. Zentralverband der Deutschen Werbewirtschaft (ZAW), the German advertising association, issues new and stronger self-regulatory rules for alcohol advertising. (October 2004)

    Greece. A new self-regulatory organization for the advertising industry is launched in Greece. (February 2004)

    Ireland. Central Copy Clearance Ireland, an independent pre-vetting agency, reports that, from its establishment in February 2003 through July 2004, the number of complaints received about alcohol advertising by the Advertising Standards Authority Ireland halved by comparison with the previous year. (July 2004)

    Japan. The Industry-wide Council for Alcohol Consumption produced a code of practice for alcohol beverages. The code specifies restrictions on different types of media and outlines content requirements. (September 2005)

    Japan. In an effort to support self-regulation in the alcohol beverage industry in the Asia-Pacific region, the International Alliance for Responsible Drinking organizes a regional workshop on self-regulation in Tokyo. (2006)

    Latin America. In an effort to support self-regulation in the alcohol beverage industry in the Latin American region, the International Alliance for Responsible Drinking organizes a regional workshop on self-regulation in Santiago, Chile. (2007)

    Netherlands. The Dutch Foundation for the Responsible Alcohol Consumption (Stichting Verantwoord Alcoholgebruik, STIVA) announces the establishment of an independent pre-vetting commission for alcohol beverage advertising. Fines for non-compliance are also proposed. (May 2005)

    New Zealand. Guidelines drawn by the Alcohol Advisory Council of New Zealand (ALAC) on the naming, packaging, and merchandising of alcohol beverages are incorporated into New Zealand advertising codes. (August 2003)

    Nigeria. In accordance with the revised Nigerian Code of Advertising Practice, the Advertising Practitioners Council of Nigeria calls for penalties for advertisers who do not comply with rules. (May 2005)

    South Africa. The Industry Association for Responsible Use of Alcohol (ARA) revises code for the third time since 1989, adding provisions that prohibit the special promotion of beverages with higher alcohol content and the promotion of aggressive or antisocial behavior. (July 2004)

    Spain. Brewers of Spain, the Confederation of Consumers and the Association for Self-Regulation announce self-regulatory agreement setting standards for beer advertising. A similar code exists for spirits. (September 2003)

    United Kingdom. New guidelines on broadcast alcohol advertising are published by the Committee of Advertising Practice, with strengthened provisions relating to young people and to any suggested link with sexual success. (2005)

    United States. The Distilled Spirits Council of the United States (DISCUS) publishes its first ever public report detailing complaints about specific alcohol advertisements, decisions of the industry’s internal review panel, and actions taken by each advertiser. The Council announces that it will continue to publish periodic reports on a semi-annual basis. (March 2005)

    United States. The Federal Trade Commission (FTC) releases its third report examining the alcohol beverage industry’s efforts to reduce the likelihood that its advertising will target those under the legal drinking age. The most recent FTC report finds that more than 97 percent of total alcohol advertising impressions by the 12 DISCUS members were in compliance with the 70 percent standard. The report also notes that all three segments of the alcohol industry (wine, beer, spirits) have adopted systems for third-party review of advertising complaints. (June 2008)

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  • RESPONSIBLE MARKETING AND AD PLACEMENTS

    Advertising of alcohol beverages is a matter for serious policy consideration, especially where there is concern that such advertisements may attract the attention of underage youth.

    There are well-established industry codes for responsible marketing worldwide—codes which comprehensively address the importance of marketing and advertising practices directed only to consumers of legal drinking age. These codes include the DISCUS Code of Responsible Practices for Beverage Alcohol Advertising and Marketing and similar codes of responsibility established by The Beer Institute and The Wine Institute, DSICA in Australia, the European Spirits Association (CEPS), and the Portman Group in the United Kingdom.

    As previously noted in this Issues Forum entry, in the face of criticisms of self-regulation, studies confirm the effectiveness of this approach:

    • The most recent FTC study on this topic in the U.S. showed that more than 97 percent of total alcohol advertising impressions of the 12 DISCUS member companies were in compliance with the 70 percent standard.1
    • In Europe, based on a study initiated to measure industry compliance with its own self-regulation initiatives, the European Advertising Standards Alliance (EASA) recently reported a 95 percent compliance rate across 19 EU member states.2

    THE INTERNET AND NEW MEDIA

    Over time, as marketing methods become ever more sophisticated, self-regulation codes have added provisions to specific commercial communications channels, e.g. point-of-sale promotions, sponsorship, digital media, and naming, packaging, and labeling. The member companies of both spiritsEUROPE (formerly EFRD) and DISCUS in the U.S., including Brown-Forman, recently supported a review of the Internet Guidelines first adopted in 2004 and updated them to form the new “Guidelines for Commercial Communications on the Internet, for Digital and Mobile Marketing” (also known as “Digital Media Guidelines”) which became effective on June 30, 2009. EFRD consulted on the new guidelines with a group of external stakeholders including all participants to the Marketing Communications Task Force of the European Commission’s Alcohol & Health Forum, additional non-governmental organizations (NGOs) and trade associations, as well as academics.3

    DEBATE ABOUT THE STRENGTH OF CERTAIN INFLUENCES WITH UNDERAGE YOUTH

    A recent survey commissioned by The Foundation for Advancing Alcohol Responsibility (Responsbility.org) asked teens, ‘Where do you get the alcohol that you drink?’ Sixty-five percent of the youth surveyed said that they got the alcohol they drink from family and friends, meaning they got it from their parents, their friends’ parents, older siblings or family members or older friends, with or without permission. Moreover, research consistently shows that parents, and to a certain extent, peers—not advertisements—are the most powerful factor in young peoples’ decisions to drink (and if they do drink, how and to what extent).4 However, there are recent studies which correlate advertising with alcohol consumption by underage youth and young adults who are of college age.5

    EMERGING MARKETS AND SOCIO-CULTURAL CONSIDERATIONS

    There are increasing numbers of self-regulatory systems for beverage alcohol in Central and Eastern Europe, Africa, Asia and Latin America, but support for the concept is not universal. In some countries, the legislation which governs alcohol beverage advertising is so strict that self-regulation would be a superfluous exercise. In other countries, alcohol advertising is governed by more general codes of practice for advertising.

    In countries where self-regulatory codes are being introduced for the first time, national and regional concerns need to be taken into account within broader debate and discussion about regulation, self-regulation, and co-regulation. From Asia and the Pacific to the Americas, Europe, and Africa, each region is characterized by cultural, religious, and socioeconomic characteristics which affect debates about alcohol advertising, regulation, and the relevance of particular messages within specific population subgroups and markets.6

    FURTHER INSIGHTS FROM AN EXPERT COMMITTEE

    In 2006, the International Alliance for Responsible Drinking convened an expert committee for the purpose of addressing the important topic of responsible drinks marketing from a variety of seasoned perspectives. The committee consisted of participants with the perspectives of marketers, regulators, beverage alcohol producers, researchers, and consumers. The committee made recommendations which are summarized below:

    • Government and industry should build partnerships for the marketing of alcohol beverages.
    • Marketing codes should be developed where they do not already exist.
    • The industry should take steps to ensure that marketing codes cover all types of consumer communication, including new media.
    • Responsibility messages should be developed globally and adapted at the local level to help educate consumers.
    • Alcohol beverage retailers should ensure the creation of consistently safe drinking environments.
    • The industry should facilitate consumer access to channels of communication for feedback, complaints, questions, and concerns.
    • The public health community, government, and the industry should disseminate results of research on alcohol-related issues.
    • The industry should set up a repository of “best practices” with regard to responsible marketing.7

    Global Actions on Harmful Drinking

    In 2012, global producers of beer, wine, and spirits announced new commitments that build on long-standing efforts to reduce harmful drinking. The companies have pledged to implement 10 targeted actions in five key areas over the next five years. One of these areas included strengthening and expanding marketing codes of practice. The actions included:

      1. A commitment to develop a set of global guiding principles for beverage alcohol marketing in digital media, including social media sites that are engaged in direct interaction with consumers.
      2. Over the next five years, a commitment to take steps to enable non-industry participation where none already exists in self-regulatory processes that enforce code standards.
      3. Including appropriate contractual language in agreements with advertising agencies, where practicable and legal, that will require them to abide by responsible marketing and promotion codes for beverage alcohol brands.
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