Study on Key Features of the Alcohol Industry

Description
Like the tobacco industry, the alcohol industry produces a legal, widely consumed drug; is dominated by relatively few producers; and utilizes a powerful combination of advertising dollars, savvy marketing, political campaign contributions, and sophisticated lobbying tactics to create and maintain an environment favorable to its economic and political interests.

ALCOHOL INDUSTRY
101
I TS STRUCTURE & ORGANI ZATI ON
American Medical Association
Physicians dedicated to the health of America
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Richard A. Yoast, PhD
Project Director
Janet Williams, MA
Deputy Director
Reducing Underage
Drinking Through Coalitions
American Medical Association
Office of Alcohol and
Other Drug Abuse
515 North State Street
Chicago, Illinois 60610
For copies of this report,
call 312-464-4618.
Supported by The Robert Wood
Johnson Foundation
© 2004 American Medical
Association. All right reserved.
This booklet can be reproduced
or duplicated and distributed
without charge for noncommercial
purposes. All copies must include
the American Medical Association’s
copyright notice and contain no
charge in the content or format
of the publication.
KEY FEATURES OF
THE ALCOHOL INDUSTRY:
LARGE, COMPLEX AND INCREASINGLY
INTERNATIONAL IN OWNERSHIP
•
POLITICALLY POWERFUL AND ABLE TO INFLUENCE
AND GUIDE MANY NATIONAL, STATE AND LOCAL
ALCOHOL CONTROL POLICIES
•
EFFECTIVE IN INFLUENCING HOW THE
MEDIA, PUBLIC AND DECISION MAKERS THINK
ABOUT ALCOHOL, ALCOHOL CONSUMPTION,
AND ALCOHOL PROBLEMS
•
CONSTANT IN ITS POLICIES, EDUCATIONAL
ACTIVITIES AND MARKETING: DRINKING IS
AN INDIVIDUAL CHOICE, PROBLEMS DERIVE FROM
IRRESPONSIBLE INDIVIDUAL DRINKERS (MOST
DRINKERS ARE RESPONSIBLE), AND CONTROL
POLICIES OUGHT TO FOCUS ON PUNISHING
“IRRESPONSIBLE” INDIVIDUAL DRINKERS –
NO ONE ELSE.
1
This primer is an overview of the alcohol industry, its influential role in normalizing drinking
and its opposition to prevention policies and programs it perceives as threats to its bottom line.
This primer is a follow-up to The Alcohol Industry: Partner or Foe? published by the American
Medical Association (AMA) Office of Alcohol and other Drugs and examined the industry’s
funding of others as wel l as its prevention programs. It is avail abl e onl ine at
www.AlcoholPolicyMD.com. The information in this primer was current as of January 2004.
Like the tobacco industry, the alcohol industry
produces a legal, widely consumed drug; is dominated
by relatively few producers; and utilizes a powerful
combination of advertising dollars, savvy marketing,
political campaign contributions, and sophisticated
lobbying tactics to create and maintain an environment
favorable to its economic and political interests.
It requires the recruitment of new, youthful drinkers
to maintain and build its customer base. It distances
itself as far as possible from research findings that
show alcohol is an addictive, albeit legal, drug
that has harmful effects on mental, physical and
community health.
Although the industry presents substantial information
that reflects favorably upon its economic and social
roles, it has received little external scrutiny regarding
its political strategies and how it implements them.
The industry is highly visible as a producer, advertiser
and supporter of community groups including impaired
driving prevention groups. It has been barely visible
as a powerful political complex with major policy
and cultural influences on how we think about and
manage alcohol problems.
The alcohol industry has effectively shaped the public
image to always focus on the consumer and not on
the sellers, producers and promoters of the product.
As a chemical that affects our bodies, alcohol is
a powerful drug resulting in more premature deaths
and illnesses than all illicit drugs combined. Yet the
industry has shaped public opinion and forced
government to treat it not as a drug but as a cultural
artifact, a valued legal commodity, almost a food,
even a necessity of life. While always acting as a
business it has obscured that role with constant
information portraying it as a concerned citizen
interested solely in the pleasure and safety of its
customers. To encourage a more thoughtful debate
and understanding of this industry, this primer
examines its:
• Structure and diversity
• Production and distribution systems
• Marketing and promotion strategies
• Marketing campaigns to promote “safe”
drinking policies
• Lobbying tactics and efforts to defeat regulation
and restriction on its operation.
The examination of the above topics dispels the myth
of excessive drinking as solely the product of individual
choice while underscoring the role the alcohol industry
plays in contributing to the health risks, fatalities,
violence, and other problems associated with underage
and high-risk consumption of alcohol.
INTRODUCTION
Through extensive campaign contributions to members
of both parties, at all levels of government, the industry
maintains great political influence. Through its
business presence in every community it maintains
strong connections to local communities, state
government and governing bodies at every level.
Communities in need of new businesses in downtown
areas often recruit or accept alcohol retailers to fill
vacant store fronts. Community organizations and
colleges may turn to the industry for donations and
sponsorship – and remain uncritical of the problems
that alcohol creates.
The various segments of the alcohol industry do not
act as one, but they do share many common interests:
• Normalize (regularize) and encourage the
consumption of alcohol
• Minimize government checks and regulation on
their ability to market, advertise and distribute
their product
• Minimize taxes and law violation penalties on the
sale of their products
2
THE ALCOHOL INDUSTRIAL COMPLEX: AN OVERVIEW
Alcoholic beverages annually generate over $137 billion in sales in the United States for a total
consumption of 7.3 billion gallons in 2002
1
. The alcohol industry is a powerful multinational
business complex. It includes not only the producers of beer, wine and distilled spirits (“hard
liquor”) and their labyrinthine network of distributors and wholesalers, but also related
“hospitality” and entertainment industries such as restaurants, hotels, tourism, professional
sports, and retailers from resorts and clubs to bars and convenience stores. Many additional
business sectors earn substantial profits from the sale and/or promotion/advertising of
alcohol: mass media, advertising industry, groceries and gas stations (in some states). Through
the use of advertising dollars, the alcohol industry also exerts economic and political influence
over the mass media and the public that consumes the media.
U.S. Alcohol Retail Sales and Advertising Expenditures - 2002
2
*These figures do not include additional expenditures for promotions, sponsorship, discounting, and other marketing activities.
Total marketing expenditures, including advertising, have been estimated at between $4 and $6 billion.
Beer
Wine
Liquor
Total
$ 35,920,000,000
9,160,000,000
23,584,000,000
$ 68,664,000,000
$ 38,515,000,000
11,370,000,000
18,566,000,000
$ 68,451,000,000
$ 74,435,000,000
20,530,000,000
42,150,000,000
$ 137,115,000,000
$ 1,169,801,000
122,417,000
408,131,000
$ 1,700,348,000
On-Premise Off-Premise Total Sales Advertising Expenditures*
THE ALCOHOL INDUSTRIAL COMPLEX: AN OVERVIEW
3
• Maximize the focus of alcohol control laws on consumer
rather than corporate or retailer responsibility for harm
resulting from use of their product
• Distance themselves and their product from the
problems inevitably associated with its use
• Obscure and misrepresent the causes and effects
of those problems in general. [This, for example,
is a major reason why the industry opposes alcohol
being labeled a “drug” and opposes the inclusion
of alcohol in the “war on drugs.”]
The history of alcohol in America since Prohibition
(1920-1933) is a story of increasing corporate and
market consolidation. Between 1934 and 1982,
the number of brewing companies in the U.S. shrank
from 756 to 44.
3
The consolidation has been vertical:
producers have exerted more control and ownership
up and down the line from production to local
distribution. The consolidated companies are active
at all political levels – national, state and local
(legislative and administrative). Integration has also
been horizontal as companies acquire each other to
reduce the number of major competitors. In the 1970s
and 1980s industrial giants Philip Morris, Coca Cola
and R.J. Reynolds began entering the alcohol market
as well. By the early 1980s the bulk of the market was
shared by a small circle of companies. And the circle
has only tightened in the last two decades: the top 10
beer companies now control 95 percent of the beer
market.
4
Some recent noteworthy consolidations
were: the merger of Grand Metropolitan and
Guinness in 1997, to form the multinational
conglomerate and global spirits leader Diageo; the
divestment by Seagrams of its drinks portfolio, which
was bought up by Diageo and Pernod Ricard in 2001;
the 2002 purchase by South African Breweries of
control of Miller Brewing from Philip Morris (which
still retains some ownership); the 2003 purchase by
Constellation Brands, Inc. of BRL Hardy, Australia’s
largest wine producer, to make Constellation the
world’s largest wine company.
With concentration has come increased political
influence. Alcohol producers have successfully
chipped away at many of the restrictions on retail
sales placed in state codes in the 1930s. The dramatic
increases in consumption since prohibition have
simultaneously provided state and federal governments
with revenue from taxes on alcohol and alcohol sales.
Alcohol policy has always been shaped by economic
and political, as much as and often more than
health, agendas.
REGULATION
Although Prohibition was repealed in 1933, in part
to reduce the violence and costs associated with an
illicit alcohol market, the costs of alcoholism, social
problems associated with alcohol and the negative
effects of alcohol abuse on families and children
remained. Reflecting these concerns, a national
consensus continued to treat alcohol as a dangerous
product that needs to be heavily regulated in its
production, distribution and sales. Within this
perspective, the public perceived distilled spirits and
to some extent wine as presenting greater potential
dangers to consumers and society than beer. Thus,
the regulations, restrictions and taxes regarding distilled
spirits are often more extensive than for beer.
FEDERAL REGULATORS
Alcohol products, production and sales are subject
to government regulations at the federal and state,
and occasionally, the local level. Regulation affects
distribution, labeling, advertising, credit, container
characteristics, alcoholic content, tax rates (set by
Congress), and litter assessments. Until recently,
nearly all federal regulations involving alcohol
were issued by the Treasury Department Bureau of
Alcohol, Tobacco, and Firearms (BATF), established
by the Federal Alcohol Administration Act of 1935
PRODUCTS, PRODUCTION
AND DISTRIBUTION
4
and the 1968 Gun Control Act.
5
However, in 2002,
under the Homeland Security Act, the bureau was
divided. The part remaining in the Dept. of the
Treasury was renamed the Alcohol and Tobacco Tax
and Trade Bureau (TTB). A new Bureau of Alcohol,
Tobacco, Firearms and Explosives (ATF) was formed
in the Department of Justice. The TTB continues
to administer and enforce existing Federal laws and
tax code provisions related to the production and
taxation of alcohol and tobacco products, and to
collect excise taxes on the manufacture of firearms
and ammunition. The new ATF enforces federal laws
and regulations relating to alcohol, tobacco, firearms
and explosives by working directly and in cooperation
with others.
STATE LICENSING
Most states operate under a license- to-sell system;
i.e., one is required to have a state issued license
to sell alcohol. Most licenses are issued, regulated
and enforced by state agencies although some states
allow for local licensing. Licenses to sell beer are
often separate, less expensive and easier to obtain
than licenses to sell distilled spirits or wine.
Licensing law enforcement (including regulations
banning sales to minors or to intoxicated drinkers)
varies from state to state although most states
maintain some state enforcement agency and allow
for local enforcement agency roles as well. Specific
alcohol taxation (as opposed to more general sales
taxes) is primarily a federal and state right although
some states permit some additional local taxation.
Enforcement of alcohol sales laws in some states has
been combined recently with enforcement of tobacco
control laws, but in most cases state enforcement,
licensing and revenue collection of alcohol and
tobacco are handled separately.
CONTROL STATES
A second, but shrinking, system of sales is known as
the control state system; i.e., the “control” state is
involved in the distribution and sale of some alcohol
products (usually only wine and spirits). After
Prohibition, numerous states took control of many
facets of alcohol sales and distribution. Since then
under constant pressure from the alcohol industry
and other businesses wanting a share of the sales
market, the number of such states has greatly declined.
However, 18 “control” states still maintain some
direct control over certain sectors of the alcoholic
beverage market.
6,7
Montgomery County, Maryland,
is the only non-state government to participate in
this control system.
The “control” states that sell alcohol participate in
a unique way as part of the alcohol industry. They
have a direct interest in the levels of revenue – profit-
produced by alcohol sales – but they also have public
health and safety concerns and obligations. Thus, they
may exert more extensive controls on the conditions
of sale and promotion. Some extend this to how
alcohol is advertised. Several include extensive public
alcohol education activities and focus on prevention
of sales to minors.
In every state, controlled or not, the license to sell
beer is more widely permitted: e.g. in liquor stores,
convenience stores, supermarkets, restaurants and
taverns, and sports arenas. Permits to sell and/or serve
are often granted for special public events – festivals,
fairs, races – and for institutional events and facilities
(fund raisers, parties, campus pubs, etc.).
INDUSTRY REGULATORY STRATEGIES
Often, the private alcohol industry heavily and
persistently pushes to reduce regulation through
various strategies:
• Whittle away at existing state controls
• Reduce the number and functions of control states
and replace these with licensing regulations
• Limit resources available for alcohol law
enforcement
• Limit (preempt) the ability of municipalities and
counties to enact (often stronger) local control
ordinances or to provide expanded enforcement
5
of state regulations [For more information on
this topic, see The Perils of Preemption at
www.AlcoholPolicyMD.com.]
• Expand the number of places, situations, and
times in which alcohol can be sold
• Resist or reduce any restrictions on alcohol
advertising (e.g., signage; advertising content)
• Decrease existing or resist new alcohol excise
taxes, license and penalty fees
Although states bear much of the burden of handling
the health care and social disruption costs of alcohol
consumption, they also gain significant revenue from
alcohol taxes and frequently have close working
relationships with industry representatives. Most
governmental attention to alcohol in recent decades
has focused on harm reduction: restricting when
and sometimes where people drink and educating
the public about potentially high-risk consumption
(e.g., while operating cars and machinery; drinking
during pregnancy; underage drinking; outdoor
consumption). At the same time government has
been used to protect and even expand the opportunities
to promote, sell and consume alcohol. While there
has been a clear governmental focus on treating
alcoholism, prevention is usually lumped in with all
other drug abuse prevention – where alcohol is treated
as one amongst many, and usually not the most dangerous
substance. As the federal and state governments
annually declare one illicit drug crisis after another,
alcohol, the most widely abused and used recreational
drug, remains in the background.
“The lower priority assigned to alcohol compared
with other drugs may be due in part to voter attitudes.
Voters have demanded action to stop illicit drug
problems, but have not expressed similar concerns
about alcohol. Most voters are not aware of the costs
associated with alcohol abuse, and congress does
not hear from large numbers of constituents that
alcohol abuse presents a problem.”
8
A THREE-TIERED SYSTEM
The industry is organized into a three-tiered system
of producers, distributors and sellers of alcohol.
As explained above, when states took over regulation
of these three tiers after Prohibition, they chose to
either license or directly control sales and distribution.
These laws (known as “tied house” laws), adopted at
the state and federal levels, regulate how alcoholic
beverages are marketed and how the various tiers of
the industry interact. The term “tied house” dates
back to before Prohibition when saloons were often
tied, by ownership links or contractual obligations,
to a specific manufacturer.
Although sharing many common interests, each
industry tier has its own perspectives and concerns.
The three tiers might conflict with each other
when, for example, a manufacturer decides to increase
charges to wholesalers who pass them on to retailers
and ultimately consumers. Laws which give advantages
to one tier over the others might be opposed by those
other tiers. When producers fail to focus state laws
on consumer responsibility they may shift the focus
to seller responsibility. Rarely are producers held
liable for the harm caused by their products. As beer
production concentrated nationally, the producers
focused on national regulation and sales concerns.
Local retailers (i.e., local businesses) more fully
integrated into local communities and cultures, tend
to reflect local values and policy concerns more than
a national producer. The good will of the community
surrounding them can make them more responsive
to addressing the negative impacts of alcohol sales
and consumption – felt more strongly at the local
than at the state (e.g., distributor) or national (e.g.,
producer) level. Conversely, they will also use their
clout to influence local and state policy decisions to
favor their interests.
INDUSTRY ORGANIZATION OF
SALES AND DISTRIBUTION
6
MOVEMENT TOWARDS ONE TIER, ONE OWNERR
In recent years, there has been a strong shift away
from the spirit of the “tied house” laws. The major
producers have tried to eliminate these tiers by
taking ownership and control at all levels (i.e., vertical
integration). The distinction between the three tiers
has become increasingly blurred as producers exert
more control over, or even absorb, distribution
networks and exert more control over retailing.
Politically, this has led to national producers becoming
more involved in trying to influence local alcohol
policy decisions. Communities concerned with local
alcohol problems now need to cope with the presence
of lobbyists and opposition from national and even
international producer headquarters.
9
This type of vertical integration effectively consolidates
power in a few hands and assists the leading producers
in achieving a virtual stranglehold on market share.
Although retailers are generally more subject to
regulation, particularly by the states, their policies
and those of the distributors, are now largely dictated
by the producers themselves. Thus, the producers
have created the appearance of product diversity in
the various alcohol markets, with multiple low-end and
high-end brands seeming to compete with each other.
But, in many cases, the “competition” is between several
brands of the same parent company, as in the case of
Budweiser, Bud-Light, Busch, Michelob and Corona
beers - all brand names owned by Anheuser-Busch.
A new area of integration has been the development
of collaborations between the beer and distilled spirits
industry – industries that traditionally have seen
themselves as competitors who often disagreed in key
legislative area. So, we now see a number of high
alcohol content malt beverages that are regulated,
taxed, and sold as beer but which are packaged and
named to look like well-known distilled spirits brands.
A consequence of integration is that the policy and
economic interests of the three tiers have blended
in favor of national and international producers.
The expressed interests of some retailers, for example,
have become more similar to those of the producers
who increasingly sponsor and fund (and thus influence)
the state activities of various retailer associations.
Thus, one might find local retailers taking one stance
on local public policies and a state association taking
another stance representing the interests of the producers.
Anheuser-Busch, the leading brewer nationally and globally, no longer allows its distributors to carry
any products other than its own, and has been involved in several high-profile legal battles in its
attempts to assert control over its distributors. In 1996, August Busch III’s daughter Susie Busch
Transou was given responsibility for AB’s Florida distributors, including the Gainesville distributorship
which was awarded to baseball star Roger Maris by Cardinals team owner August Busch Jr. after
the 1967 world series, and owned and operated by the Roger Maris family for 30 years. When the
Maris family rejected Busch’s buyout offer as unreasonably low, the beer giant terminated the
contract and sold the Gainesville franchise, alleging mismanagement and falsified documents. The
Maris family sued for breach of contract and in 2002, was awarded $50 million by a circuit court
judge.
10
Diageo, the world’s largest spirits marketer, has also recently re-organized its vast network
to accomplish similar goals.
The 1990s brought some new challenges to state and local governments who are the primary
regulators of alcohol sales and consumption. These stem from a few key mergers in the 1990s
coming on top of a gradual process of consolidation in the alcohol industry over the past
30 years. Increasingly, the dominant players are national, multi-national or foreign-owned
businesses. These present several issues for local and state regulators:
SOME COMMENTS FROM A STATE REGULATOR
1
2
3
4
National or international businesses are more difficult to work with just because their head office
or management is out of state or in another country. Communication is more difficult and a company’s
representative often has “marching orders” without the ability to compromise.
Foreign-owned businesses have no history with the U.S.’s unique style of alcohol regulation. Not
only are they confronted with different regulations in each state, but also tied house laws prohibit
connections with the retail sector. No doubt, the newly formed companies react negatively to this
chaotic array of regulations, seeing them as barriers to business. They may or may not be aware
that the “three-tiered system” was designed to prevent the abuses experienced in this country
prior to prohibition. Before prohibition, large alcohol manufactures owned strings of retail outlets
that were pressured to engage in heavy promotion of intoxication.
Small operators—usually in the wine and microbrewery business—are generally responsible
operators. These are craft operators who are primarily interested in selling the quality of their
product but not quantity consumption. However, they have a difficult time competing and some
get bought out by large concerns or are just muscled out of business.
Associations of licensees—grocers, restaurateurs—are often powerful political forces. But, because
their members have families that live in local communities, they are usually careful not to advocate
for something that would clearly offend or be a danger to our communities. It is usually easier
to work with these groups in the typical “give and take” arena of politics. This could change,
however, as mergers impact this business sector as well. Large chains of grocers and restaurants
are gaining in dominance.
7
8
BEER
Beer is the largest alcohol segment nationwide and
internationally , accounting for roughly 86 percent of
all alcohol volume sold in the United States and annually
generating over $74.4 billion in retail sales.
11
The industry
has continued to grow and increase its profitability despite
economic and even consumption downturns. For example,
at the start of 2003 Anheuser-Busch had experienced
16 straight quarters of earnings-per-share growth.
12
The beer industry, like that of spirits and wine, is organized
in a “three-tier" distribution system consisting of producers,
wholesalers (or distributors) and retailers.
The beer industry is a vast global network of transnational
producers, subsidiaries and joint ventures with local
partners. Beer itself has many variations, from light beer,
clear beer, ice beer to higher alcohol content brews such
as stout, ale, or malt liquor. Technological advances in
manufacturing, transportation and refrigeration make it
possible to cheaply produce, store and ship large quantities of
beer. These techniques have spread rapidly around the globe.
The beer market is the most concentrated of the three
alcohol sectors. Anheuser-Busch is the number one seller
and the world’s largest brewer; in 2003 it had over 50
percent of the domestic U.S. market share.
13
Combined
with South African Breweries’ Miller Beer (SABMiller is
the world’s second largest brewer), these two companies
account for over 70 percent of all U.S. beer sales.
14
The top
10 beer companies combined now control 95 percent of the
beer market. Of the $19.1 billion in federal, state and local
taxes paid by the alcohol industry in 1999, more than $9
billion came from the beer industry (spirits contributed
$8.1 billion and wine just over $2 billion).
15
Although
some beer companies operate as regional or even local
beers, these continue to decline in number, often
closing or being sold to a larger national brewer.
Craft beer: This industry segment includes about
1,400 brewpubs, microbreweries, regional specialty
breweries and contract brewing companies. Although
proliferating, they still only account for a small share
of the market and cater to more local tastes and
interests. In 2001 they produced 6.4 million barrels
of beer with a total industry annual retail sales of
9
$3.8 billion. The regional specialty breweries account
for almost 60 percent of the production volume in
this industry segment.
16
Some microbreweries are
owned by the larger breweries or are themselves part
of small brewery/restaurant chains.
SPIRITS
Spirits, strong alcoholic liquor produced by distillation,
generated $42.1 billion in retail sales in 2002.
17
While
the beer and spirits markets have much in common,
there are some important distinctions. Distilled spirits
are more complex, often costlier products to produce
and require substantial know-how to produce in large
quantities. Some products (e.g., whiskey, cognac) which
require aging have added storage costs over time. As a
result of these factors, production of spirits is more
localized than that of premium beer. More typically,
spirits producers export bulk concentrate for local
mixing and bottling. Spirits also vary widely in terms
of strength, although products with an alcohol content
higher than 50 percent (100 proof) are rare except
in the informal production sector, which is minimal
in the U.S. While the distilled spirits market’s
concentration is less pronounced than that of beer,
it is still very high and increasing: the top five spirits
marketers control 59 percent of the U.S. market.
18
WINE
Wine, both in terms of production and consumption,
is the smallest of the three main types of alcohol.
In 2002, total U.S wine sales were $20.5 billion.
19
The
wine industry has suffered a decline in recent years and
many wine-making countries or regions have responded
to the oversupply by limiting production and focusing
on other grape-derived products such as non-alcoholic
fruit juices. The wine industry is most significant in terms
of its ownership ties to the major spirits producers:
Constellation Brands, United Distillers & Vintners
(Diageo) and Brown-Forman occupy the number two,
seven and 9 slots, respectively, in the U.S. wine market
with a combined market share of 23.7 percent.
20
E. & J.
Gallo Winery is the world’s largest wine maker. It
produces about 30 percent of the wine sold in the U.S.
21
With increased concentration comes increased wealth,
and a growth of the political and market influence of
a relatively small number of players. For example, where
once many regional and local beer brands were key
economic and political players in their regions, we now
see only three corporations with extensive influence at
all levels. This translates into:
• Increased purchasing influence (e.g., in the mass
media)
• Influence over organizations they sponsor and for
whom they are a major purchaser of services
• Increased ability to operate politically at all fields
(campaign contributions, placement of lobbyists and
representatives in the field)
• Movement of key political and economic decision
making away from state and local bodies to national
and international levels.
This makes the expression of community concerns
extremely difficult. It is often easiest for concerned
citizens to act locally on business, political and media
activities. They know who to influence and have
the resources to approach and influence them. Not
surprisingly, the strongest alcohol control policies
have been local and then state. Citizen input at the
national or international level is greatly diminished,
far costlier, and harder to organize – if possible at all.
As the level to impact goes up citizens are faced with
opponents with far greater economic resources and
abilities to influence decision makers. As a smaller
number of brand names dominate the consumer
market, they become increasingly familiar as household
names. Youth especially begin to express brand loyalties
and awareness along these lines which can then carry
over into adult behaviors.
SOME IMPLICATIONS OF
INDUSTRY CONCENTRATION
MAJOR PLAYERS IN THE U.S. ALCOHOL INDUSTRY – A QUICK PICTURE
Common State and Local Level Allies (can vary considerably by location and issue): State and local alcohol producers
and their associations: microbreweries, vineyards, etc.
Retail associations often representing alcohol vendors: bars/taverns/clubs, distributors and wholesalers, restaurants, hotels
and resorts, convenience stores, grocers and supermarkets, liquor stores, drug stores and gas stations (in some states).
Business sectors that often benefit from alcohol sales, promotion, advertising or alcohol industry funding or
sponsorship: mass media (television, radio, magazines, newspapers) advertising and marketing industry, professional
sports teams and associations, tourism bureaus, some higher education and arts organizations; some community fund
raising groups; some community festivals/fairs.
• American Beverage Institute (ABI)
• American Beverage Licensees (ABL)
• Association of Brewers
• Beer Institute
• National Beer Wholesalers
Association
• www.beerservesamerica.org
• Alcohol Beverage Medical
Research Foundation (ABMRF)
• International Center for Alcohol
Policies (ICAP)
• “We I.D.”
• Boost Alcohol Consciousness
Concerning the Health of University
Students & Greeks Advocating
Mature Management of Alcohol
(BACCHUS & GAMMA)
• National Collegiate Athletic
Association (NCAA) Choices program
• National Collegiate Alcohol
Awareness (NCAA) Week
• National Commission Against Drunk
Driving (NCADD)
• National Social Norms Resource
Center (Northern Illinois University)
• Training for Intervention Procedures
by Servers of Alcohol (TIPS)
• “Family Talk About Drinking”
• Century Council
• ICAP
• Point of Sale
Campaign/Front Lines
• Responsible Hospitality
Institute
• Alcohol 101
®
• BACCHUS & GAMMA
• Full House at Prom Night
• Promising Practices
Sourcebook (college)
• Ready or Not:
®
Talking
with Kids About Alcohol
• Training for Intervention
Procedures by Servers
of Alcohol (TIPS)
• Cops in Shops
• Allied Domecq
• Bacardi-Martini
• Brown-Forman
• Constellation Brands
• Fortune Brands
• Guiness-UDV (DIAGEO)
• Heaven Hill Distilleries
• ABI
• ABL
• Distilled Spirits Council of
the United States (DISCUS)
• Wine & Spirits
Wholesalers of
America (WSWA)
• ABI
• ABL
• Wine Institute
• American
Vintners
Association
• WSWA
• ICAP
• Responsible
Hospitality
Institute
• Constellation
Brands
• E. & J. Gallo
Winery
• The Wine Group
• Anheuser-Busch
• Coors
• Pabst
• SAB/Miller
Alcohol
Education &
Research
some programs
and organizations
with substantial
industry funding
and/or support
Alcohol
Education
& Research
primarily
industry funded
Industry
Advocacy &
Lobbying
Largest
Producers
Liquor Wine
10
Beer
*Current corporate name; formerly named Canandaigua Wines Source: Adam Wine Handbook, 2002 Edition.
1
2
3
4
5
6
7
8
9
10
Franzia Wine Taps
Carlo Rossi
Twin Valley
Almaden
Livingston Cellars
Sutter Home
Beringer
Woodbridge
Boone’s
Inglenook
The Wine Group
E & J Gallo Group
E & J Gallo Group
Constellation Brands*
E & J Gallo Group
Trinchero Family Estates
Beringer Blass Wine Estates
Robert Mondavi Winery
E & J Gallo Group
Constellation Brands*
20,892
12,900
10,000
9,680
7,200
7,083
7,000
6,785
4,700
4,340
Brand Rank Supplier 2002
TOP TEN WINE BRANDS, 2002
(thousands of 9-litter cases)
*Current corporate name; formerly named Canandaigua Wines Source: Adam Wine Handbook, 2002 Edition.
1
2
3
4
5
6
7
8
9
10
E & J Gallo Group
Constellation Brands*
The Wine Group
Beringer Blass Wine Estates
Robert Mondavi Winery
Kendall-Jackson Wine Estates
Brown-Forman Beverages
Trinchero Family Estates
Southcorp Wines, USA
Allied Domecq Wines, USA
$1,298
895
806
552
427
336
307
240
225
193
18.4%
12.7%
11.4%
7.8%
6.1%
4.8%
4.4%
3.4%
3.2%
2.7%
64,575
36,785
31,383
10,435
8,857
4,686
5,680
7,925
4,268
2,486
26.2%
14.9%
12.7%
4.2%
3.6%
1.9%
2.3%
3.2%
1.7%
1%
Supplier Rank Sales $Millions Sales Share Volume Cases Volume Share
TOP TEN WINE SUPPLIERS, 2002
11
Source: Adam Liquor Handbook, 2003 Edition.
1
2
3
4
5
6
7
8
9
10
Diageo PLC
Constellation Brands
Jim Beam Brands/Future Brands
Allied domecq Spirits USA
Bacardi USA
Brown-Forman Beverages
Heaven Hill Distilleries, Inc.
Schieffelin & Somerset
Pernod Ricard USA
Absolut Spirits Co./Future Brands
Total Top 10
20.0
9.7
9.5
7.9
7.8
7.0
4.8
3.8
3.4
2.9
76.8
Distiller Rank Percent Market Share
TOP 10 U.S. LIQUOR MARKETERS, 2002 - PERCENT MARKET SHARE BY VOLUME
Source: Adam Liquor Handbook, 2003 Edition.
1
2
3
4
5
6
7
8
9
10
Bacardi - Rum
Smirnoff - Vodka
Absolut - Vodka
Captain Morgan - Rum
Jack Daniel’s - Straight
Jose Cuervo - Tequila
Jim Beam - Straight
Crown Royal - Canadian
Seagram’s Gin
Dekuyper - Cordial
Bacardi USA
Diageo
Absolut Spirits/Future Brands
Diageo
Brown-Forman Corp.
Diageo
Jim Beam Brands
Diageo
Pernod Ricard USA
Jim Beam Brands
Rank Brand Supplier
TOP TEN LIQUOR BRANDS, 2002
12
TOP TEN U.S. COMMERCIAL BREWERS, 2002
22
TOP TEN BEER BRANDS, 2002
Rank Brewer Sales – 31-Gallon Barrels Percent Share of
U.S. Sales Market
1 Anheuser-Busch 101,800,000 50.03
2 Miller 39,660,000 19.49
3 Adolph Coors 22,688,000 11.15
4 Pabst * 8,500,000 4.18
Imports: Heinekin, Labatt, Est. 4,000,000 each
Barton/ Gambrinus (Corona),
Barton and Diageo (Guiness)
5 Boston Beer 1,280,589 0.63
6 D.G. Yuengling & Sons 1,220,000 0.60
7 LaTrobe 1,040,000 0.51
8 Genesee 900,000 0.44
9 Sierra Nevada 566,098 0.28
10 City (LaCrosse) 510,000 0.25
Total Domestic** 180,400,000 88.7
Total Import 23,070,000 11.3
Total U.S. Export 4,350,000
Total 207,820,000
* Pabst Brewing Company has closed its breweries and is now produced under contract by SABMiller.
** Figures do not include exports
Rank Brand Supplier 2002 (Thousands of
2.25-Gallon Cases)
1 Bud Light Anheuser-Busch 505,000
2 Budweiser Anheuser-Busch 423,000
3 Coors Light Coors Brewing 232,500
4 Miller Lite Miller Brewing 214,500
5 Natural Light Anheuser-Busch 113,500
6 Busch Anheuser-Busch 99,500
7 Corona Extra Barton/Gambrinus 91,278
8 Busch Light Anheuser-Busch 78,300
9 Miller High Life Miller Brewing 73,000
10 Miller Genuine Draft Miller Brewing 66,500
Source: Adams Beer Handbook, 2003 Edition
13
The vast majority of alcohol production is consumed
in domestic markets. Thus, alcohol is of limited
significance as an export product; it constitutes about
10 percent of international trade.
23
However, the export
of brand names and brand recipes is a major component
of the marketing and distribution philosophies of the
leading alcohol producers. During the last 30 years they
have systematically expanded into the developing world,
spearheaded by sophisticated marketing and advertising
strategies. Diverse, scattered local production facilities
have been incorporated into the global network of
multi-national corporations, which have come to dominate
world alcohol trade. In the annual reports of the top
producers, these goals are stated explicitly. Graham
MacKay, chief executive of South African Breweries,
the world’s 2nd largest brewer, observed, “All the growth
to be had is outside the developed world.”
24
The third
sentence in Seagram’s 1996 annual report proclaims:
“Our single biggest opportunity is global expansion.”
Alcohol production is now the end result of a complex
set of global economic and trade processes with major
producers increasingly operating on an international
scale. As Anheuser-Busch actively expands in Europe
and China, South African Breweries’ purchase of Miller
Brewing made it the second largest U.S. beer producer.
Diageo, an English firm, purchased Seagrams and a
number of U.S. distilled spirits and wine brands.
International free trade agreements, focused on reducing
impediments to free trade, will increasingly come into
play to challenge local, state and even national restrictions
on a wide range of products, including alcohol. Efforts
at local control policies will face additional international
challenges by international companies with international
brands. Policies to protect communities from the alcohol-
related harm will be challenged as unfair restraints of
trade and impediments to free access to markets (i.e.,
consumers). Local and national cultural differences are
challenged by international marketing and promotion
techniques. The chief executive of a leading Asian beer
company explains: “A beer is a beer is a beer… So
therefore it is all about brands… We are not selling
beer, we are selling image.”
25
A reduction in the number of competitors, particularly
at the national level, and a near-monopolistic dominance,
provides the springboard for the next step: international
expansion. This is illustrated clearly by the fact that
the top 20 brewers account for more than 65 percent of
the world beer market.
26
While the beer, wine and
spirits sectors each continually strives to increase its
share of the consumer market, mergers and new product
introduction continue unabated and concentration of
ownership and supply rapidly grow.
As a whole, the alcohol industry spends in excess of $4.8
billion a year in the U.S., or the equivalent of $13 million
a day, on promotional activities, including advertising
and sponsorships.
27
To put this in perspective, $70.5
million is spent on milk ads per year, about what the
alcohol industry spends in one week.
28
The entire
2005 budget of the National Institute on Alcohol
Abuse and Alcoholism was only $442 million, or
about 10 percent of the alcohol industry’s marketing
budget.
29
The impact of these marketing dollars on our
consumption habits and acceptance of alcohol’s role
in our lives-and acceptance of industry supported
policies-cannot be overestimated. For example, college
students annually (1991) spend an estimated $5.5
billion on alcohol, mostly beer. This is more than
they spend on books, soda, coffee, juice and milk
combined.
30
With the exception of ongoing campaigns
against drinking and driving, and to prevent fetal
alcohol syndrome, there have been no national,
federally funded media campaigns focused on preventing
underage drinking or other alcohol-related problems
since the early 1980s. Alcohol has been legislated
out of the focus of the War on Drugs and is only considered
THE INTERNATIONAL PICTURE-
WHAT LIES AHEAD AT HOME
A BRIEF INTRODUCTION TO ALCOHOL
MARKETING: HOW TO WIN FRIENDS
AND INFLUENCE PEOPLE
14
15
“…the global brand owners in the beer and
spirits categories have kept tight control over
their products. Although they may not directly
control production of their products, they are
likely to dictate marketing approaches to
promote a consistent product image worldwide.
Sophisticated market research tools combined
with the use of religious and cultural symbols,
coupon and sweepstakes schemes, sexual
innuendo and health and strength claims,
have been used to encourage consumption of
the companies’ products.
The ability and willingness of the global pro-
ducers to spend heavily to maintain product
image create high barriers to entry for other
firms, whether local or international . . .
accelerating the trends towards concentration
in ownership of the alcohol supply worldwide.
The health danger of this concentration lies in
the economic and political influence that may
accrue to the leading companies. This may
give them the potential to block or temper
efforts to control alcohol consumption and
problems at the same time that they rely on
huge marketing budgets to encourage
consumption of their products.
. . . Developing a policy infrastructure able to
monitor and regulate alcohol markets is an
important public health challenge.”
World Health Organization. Global Status
Report on Alcohol. Geneva: Substance
Abuse Department, Social Change and
Mental Health, World Health Organization,
1999: Pp 35-36.
one among many drugs in other drug abuse prevention
activities. In effect, in the mass media, the alcohol
industry has been a primary and a pervasive source of
public information about the product and its impacts.
This helps frame public discourse about alcohol, its
benefits, and why consumers, more than the industry,
are held responsible for any alcohol-related harms.
After Prohibition’s repeal, alcohol companies were still
wary of alienating or upsetting the public. The public’s
concerns, especially about the negative impact of
distilled spirits consumption, was reflected in higher
taxes and greater controls on liquor than on beer or
wine. For a good many years alcohol advertising was
mainly limited to specific, product-based advertising.
As television grew, the liquor industry voluntarily
excluded itself from advertising in that media. It wasn’t
until the late 1970s, when Philip Morris purchased
Miller Beer, that things began to change. When Philip
Morris entered the beer market, it brought with it
the advertising strategies that had helped it sell
cigarettes. This marked the beginning of a shift towards
“lifestyle” marketing that would eventually have a
profound and revolutionary effect on the advertising of
the alcohol industry as a whole.
Marketing plays a critical role in the globalization of
patterns of alcohol use and reflects the revolution that
is occurring in advertising in general. The same types of
marketing images appear internationally.
BRANDING
In today’s marketplace where consumers can choose
among competing brands of the same product, brand
and image promotion is preeminently important.
Among U.S. brand names, only 25 percent of
expenditures are used to purchase mass media ads
(known as measured media) while 75 percent goes to
promotional enterprises (“unmeasured” media) such as:
•sponsorships of professional and collegiate sports,
concerts, community events and groups, educational
and art institutes
•product tie-ins such as clothing and recreational para-
phernalia, product placement in movies and TV
•special contests.
31
These sponsorships and products provide direct ways
for the alcohol industry to use a wide range of
community institutions to promote their names,
and products, and to create a positive, even emotional,
relationship between the brand and consumers. Loyalty
and personal brand connections contribute to ongoing
purchases. This bonding creates a positive image of the
producer as a friend so as to diminish positive responses
to criticisms of that “friend” or to sellers of the product.
This type of loyalty can often be seen on college
campuses among students who not only have brand
loyalty and possess a wide range of brand paraphernalia
(posters, neon signs, mugs and glasses, towels, etc.)
but who rarely see that their relationship to that brand
is simply a commercial transaction – they pay and
consume, someone else profits. Activities are designed
to integrate the product into consumer and societal
lifestyles – which then respond by viewing the industry’s
goals as their own. Ivan Menezes, Diageo’s director of
commercial global strategy, states explicitly the process
by which a brand of alcohol is depicted as representing
personal “values”:
“We’ve got to own the emotional heartland of
the category and connect with the consumer in
a way that goes beyond the rational aspects of
the brand… The emotional high ground we believe
Johnnie Walker [whisky] can hold surrounds the
area of inspiring personal progress. That whole
area carries a set of values that works extremely
well across borders.”
32
RESOURCES DIRECTED AT KEY
CONSUMER TARGETS
National data and scientific research indicate that the
age of drinking initiation has declined (to age 11 or 12),
binge drinking among adolescents has increased, and
the long term effects on adolescent development and
maturation can increase life long risks for alcoholism,
injury and other alcohol-related problems. Thus, alcohol’s
role in the lives of young people is a major public health
and alcohol control policy concern. Promotion strategies
to position alcohol products as integral to particular
lifestyles or cultural or ethnic experiences are seen in the
various promotions employed to tie products to sports
and popular music desired by the target – young people.
Young populations, formerly seen as off-limits and not
an appropriate target for advertising, have now
become the focus of efforts to build brand recognition
and lifetime consumption. The alcohol industry is not
alone in this marketing revolution, but it is a vibrant,
innovative part of it.
“Alcohol advertising is designed to highlight the
attractions of using alcohol, especially to enhance
the enjoyment of social occasions, and to induce or
persuade potential customers to feel favorably towards
the promoted product. Even though these messages
may not be intentionally targeted at youths under 21,
messages aimed at “young adults” (e.g., ages 21- to 25-
year olds) will inevitably reach older teens . . . many
of those messages will also be attractive to children
and teenagers (those under 16).”
(National Research Council and Institute of Medicine
Reducing Underage Drinking: A Collective Responsibility.
Committee on Developing a Strategy to Reduce Underage
Drinking, Richard J. Bonnie and Mary Ellen O’Connell, eds.
Washington, DC: The National Academies Press. 2003; p135.)
16
17
SPORTS MARKETING
Sports marketing offers another highly effective
means to reach young drinkers. Sporting events attract
substantial young audiences, particularly young men,
who studies show are the heaviest consumers of alcoholic
beverages. Alcohol industry sponsorship of college
sports has become a common feature of university life.
Just look up at the scoreboard at many major college or
professional sports events. College football, especially,
is associated with heavy drinking, beer brand sponsorship
of athletic department activities and televised broadcasts.
In 2001, of the $811 million spent on television
alcoholic beverage advertising, $491 million was spent
on sports programs and had the largest youth ad viewing
audience of any type of programming with alcohol
advertising.
33
Alcohol industry sponsorship of major
national and international sports competitions such as
the Super Bowl, Olympics and World Cup assure brand
familiarity throughout the world.
“Sports sponsorships connect with adult consumers
Budweiser’s backing of the world’s most popular
sporting event, the World Cup, is a prime example
of how Anheuser-Busch uses sports sponsorships
to connect with adult consumers from a wide
demographic background. Anheuser-Busch brands
sponsor the Ladies Professional Golf Association,
Major League Baseball, Major League Soccer,
NASCAR, the National Basketball Association,
the National Football League, the National Hockey
League, the Professional Golfers’ Association and
the Women’s National Basketball Association.”
“Budweiser and Bud Light broadened their appeal
to contemporary adults by stepping up music
sponsorships in 2002. . . . which includes “One
Night Stand” concerts . . . in small venues where
attendance is open only to those who get tickets
through Budweiser.”
“Recognizing the potential to reach consumers in
their homes, Anheuser-Busch was the first brewer
to sponsor a national television show.”
Source:Anheuser-Busch Annual Report 2002, p. 10
YOUTH MARKETING
On both the big and small screens (TV and computer),
alcohol is highly visible to young people. The Federal
Trade Commission reported that eight of the largest
alcohol companies had made product placements in
“PG” and “PG-13”-rated movies with primarily young
audiences, and on eight of the 15 television shows most
popular with teenagers.
34
A 2002 Center for Science in
the Public Interest (CSPI) survey found that more than
73 percent of teens ages 12 to 18 had seen alcohol
beverage television advertisements after 9 p.m. on
school nights, including 71 percent of youths ages 12
to 13.
35
A study of alcohol advertising in a sample of 35
magazines, 1997 to 2001, found that beer and distilled
liquor ads appeared more frequently in magazines with
higher adolescent readership and that this advertising
was “increasing exponentially as adolescent readership
increased.”
36
Illustrating the fact that advertisers “may
be aware of adolescent consumption demographics,”
the authors pointed out that wine advertising was
associated with higher income adults and young adult
readership. Ads for wine do not appear in magazines
with youth readership – producers know who is and
should be drinking their product and advertise accordingly.
An analysis of 289,381 alcohol ad placements on television
in 2002 found that youth 12-20 saw two beer and
distilled spirits ads on television for every three seen by
adults and nearly three ads for low alcohol refreshers for
every four seen by the adults. The study concludes that
the alcohol industry’s voluntary guidelines for alcohol
ad placements are inadequate and allow for alcohol ads
to be placed on programs where there are twice as many
youth as in the viewing population.
37
During the past two decades the alcohol industry has
invested heavily in production and promotion of drinks
that will appeal to youth - “alcopops,” pre-mixed cocktails
and “energy drinks”- sweet, energy drinks, fruity drinks
with a high alcohol content at an affordable price. The
brand names of these drinks, which blur the distinction
between alcohol and soft drinks, are far more likely to
be recognized by teenagers than by adults.
38
Additional
malt liquor drinks (that offer high alcohol content at
low prices), “test tube” shots in dynamite-shaped packages,
beverages that change the color of the drinker’s tongue,
products with labels like “hot sex” and other novelty
beverages are all designed to encourage heavy drinking
among young people by introducing “fun,” affordable
ways to consume alcohol. Many of these products are
not noticed by adults who might object to their use by
children. They provide a new access to the underage
market without consideration for the health impacts on
that market. Again, one impact is that alcohol products
are placed within the existing lifestyles of young people.
MARKETING TO MINORITIES
While a major target for alcohol producers is youth,
the alcohol industry also understands the importance
of niche marketing - an approach crafted to appeal
principally to only a segment or segments of the
population. Minority populations are seen as more
accessible and offer the alcohol industry an opportunity
to exploit culture and community.
Traditional promotion and advertising campaigns
include billboards, magazines, broadcast and
in-store displays. The 1990s saw the industry
sponsoring music festivals and neighborhood
events. In addition, minority-based nonprofit
organizations were pursued by alcohol companies
as opportunities for corporate donations. Every year,
nearly all the nation’s major Latino groups receive
thousands of dollars – sometimes millions – in alcohol
industry donations.
39
These donations allowed the
companies to associate themselves with good works
and activities.
Alcohol industry advertisements often exploit
important cultural symbols especially in Latino and
African-American communities.
40
Commemorative
celebrations such as Cinco de Mayo have become ripe
opportunities for the alcohol industry to sell more
product, promote the use of its product as an appropriate
way to celebrate and to associate a particulate company
as a champion for a particular cultural event. What
was once a holiday representing Mexican Americans’
fight for civil rights, Cinco de Mayo has hit a fiesta-
fever pitch, recognized as a “drinking holiday” fueled
by alcohol companies advertising.
41
“It’s just an excuse to drink – like St. Patrick’s Day,”
said Faris Bushnaq, manger of Chevy’s Fresh Mex
Restaurant in Hollywood. “…This will be our biggest
event of the year – something for the whole family”
42
In five media markets in 2002—San Antonio,
Los Angeles, Miami, Houston, and San Francisco—
Hispanic youth were overexposed to English-language
radio alcohol advertising even more than non-Hispanic
youth. These five markets were also among seven
markets that accounted for 85% of alcohol advertising
spending on Spanish-language television.
43
The beer and
ale industry was the seventh highest-spending industry
on Spanish-language television in 2002, outspending
the makers of cars, soft drinks, and motion pictures.
44
The marketing of alcohol products in African-
American communities has, on occasion, stirred
national controversy and met with fierce resistance
from African Americans and others. Charges of
over-concentration of alcohol billboards in African-
American neighborhoods have prompted protests and
legislative fights in Chicago, Milwaukee, Baltimore,
Los Angeles and elsewhere.
45
Alcohol advertisers placed ads on 86 programs on BET
(Black Entertainment Television) in 2002, but 65% of
advertising spending and two-thirds of the ads were on
18
19
just six programs. According to audience data obtained
from BET, youth in general were more likely to see all
six of these programs than adults, and four of the six
drew disproportionate numbers of African-American
youth relative to African-American adults.
46
MARKETING HEALTH AND PERCEPTIONS
In recent years the wine industry, now joined by the
beer and liquor industries, has been notable for its
aggressive promotion of research indicating the limited
health benefits, but not the extensive risks of alcohol
consumption. These marketing tactics sell their
products and support policy changes favorable to alcohol
producers. This research has been used to:
• Argue for changes in wine labeling to reflect the
health benefits
• Reduce taxes on these “health producing” products
• Support the concept that moderate, i.e. “healthy,”
drinking is beneficial and therefore policies which
restrict the rights of moderate drinkers are unhealthy
and misguided
Some scientists have become involved in industry-
sponsored initiatives while the industry interprets and
promotes the research which favors its cause. Industry
sponsored commentators also attack independent
researchers and policy makers who set research agendas.
47
These efforts reached one crescendo following the
issuance of new U.S. Dietary Guidelines in 2000.
Warning that even one drink per day can slightly
increase the risk of breast cancer, the Guidelines noted
that moderate consumption (defined as no more than
one drink a day for women or two drinks a day for men)
may reduce the risk of coronary heart disease in certain
individuals. The guidelines indicate that these possible
benefits do not apply to:
• Youth under 21
• Women who are or may become pregnant
• Individuals taking prescription or over-the-counter
medications that can interact with alcohol
• Individuals of any age who cannot restrict their
drinking to moderate levels
• Individuals who plan to drive, operate machinery,
or take part in other activities that require attention,
skill, or coordination
The Wine Institute has used research on the health
benefits of wine and similar findings to promote
increased alcohol consumption and availability. In a
widely publicized proposal to the Bureau of Alcohol,
Tobacco and Firearms in 1996, it offered a new
container label referring wine drinkers to the Dietary
Guidelines “to learn the health benefits of moderate
alcohol consumption.” However, the ATF refused to
sanction the claim and the wording of the proposal
was changed to health “effects”.
48
As additional research has confirmed the possible
cardiovascular benefits of light drinking (no more than
one or two drinks per day in most studies) for some
populations, these studies have also shown those benefits
are primarily for white males over 40 and women over
50 and excluded some specific populations as well as
those identified by the Dietary guidelines. The alcohol
industry, aided by simplistic media headlines indicating
that daily drinking is good for you (i.e., everyone), has
extensively exaggerated, simplified and promoted these
findings to indicate that regular moderate drinking is
healthy – a vast overstatement of benefits found to help
only some of the total population. It should be noted
that at this point, most of these studies have not been
conducted prospectively (i.e., introduce alcohol to a
population and follow them and the effects over time)
which would present a far more accurate picture of
effects. Nor do these studies look at total risks or potential
harms for even the populations who might receive
cardiovascular benefits from consumption but for whom
consumption may pose risks to other body organs or
other potential health risks.
20
The National Institute on Alcohol Abuse and Alcoholism (NIH, USDHHS) in its State of the Science
Report on the Effects of Moderate Drinking concludes that …“moderate alcohol use” should not be
construed as “healthy alcohol use”. . . the relationship between moderate alcohol consumption and
disease outcome is confounded and modified by numerous individual differences – age, gender,
genetic susceptibility, metabolic rate, co-morbid conditions, lifestyle factors, and patterns of
consumption, just to name a few. Protective and detrimental levels of alcohol consumption cannot
be generalized across the population…The potential for moderate alcohol consumption to increase
risk for one disease may be offset or outweighed by its potential to decrease risk for another disease,
depending on the individual’s family history, medical history, genetic makeup, and lifestyle. The
current scientific knowledge on the risks and benefits related to various levels of alcohol consumption
does not suggest a need to modify the existing guidelines on moderate alcohol use. Except for those
individuals at particular risk (as are described in the current guidelines), consumption of two drinks
a day for men and one for women is unlikely to increase health risks. As risks for some conditions
and diseases do increase at higher levels of consumption, men should be cautioned to not exceed
4 drinks on any day and women to not exceed 3 on any day.
(www.niaaa.nih.gov/publications/ModerateDrinking-03.htm)
Over the years, the alcohol industry has answered
critics of its promotional tactics by launching big-budget
public education campaigns ostensibly aimed at
encouraging Americans to drink safely while promoting
the assumption that people will “drink.”
In fact, only half (50.1 percent) of Americans aged
12 or older reported being current drinkers – defined
as having at least one drink during the past month.
This includes binge drinkers and heavy users.
49
Although
the rates are somewhat higher for ages 18 to 25 (61.4
percent) and those aged 26 or older (52.5 percent),
the number of citizens who rarely drink, drink very
little, or drink not at all is substantial but invisible
in public discourse.
INDUSTRY PREVENTION GOALS
Alcohol industry “prevention” and education programs
reflect industry marketing and policy goals:
• Normalize drinking within the social context to
exaggerate actual levels of consumption and to make
drinking the norm
• Minimize the responsibility of alcohol producers and
retailers for the various adverse consequences of
drinking in society
• Improve the public image of the producers (as good
corporate citizens doing all they can to ensure that
their product is used responsibly)
• Emphasize individual voluntary (rather than
legislative) solutions to alcohol-related problems
(thereby enabling the industry, as much as possible,
to operate without control or accountability)
ALCOHOL INDUSTRY PREVENTION ACTIVITIES – THE ANTIDOTE TO DEMANDS FOR
GREATER INDUSTRY ACCOUNTABILITY
21
• Imprecisely define those problems only in terms of
individual responsibility or irresponsibility (thus not
setting limits to how much drinking is responsible –
i.e., no limits to sales and consumption while
diverting attention and anger away from the product
and its producers)
• Exclude corporate roles and accountability (thus,
the focus of any legislation passed will be to punish
individual transgressors, not the business structure
that assisted them in their behaviors, nor to focus on
the product that is common to all alcohol-related
problems – alcohol, itself)
• Supplant policy and regulatory enforcement strategies
with solely education, information and consumer
oriented strategies that are easy to do, ineffective
and mislead participants to thinking that’s all there
is so nothing else can be done. When these fail to
work, a common community response is “we tried
everything, nothing works, nothing changes.” The
energy of concerned citizens gets used up with little
energy left for the more difficult and contentious
strategy of changing policies and how alcohol is
sold and marketed.
Industry prevention initiatives are often crafted in
direct response to alcohol policy campaigns that
threaten its marketing interests. They have fought the
environmental approach (legal mandates and control,
restrictions of promotion and advertising, increased
taxation and enforcement) to alcohol-related problems
favored by most health and safety policy advocates.
IMPAIRED DRIVING
The industry has actively highlighted the problem of
impaired driving (focusing on the individual) and has
actively participated with a wide array of groups seeking
to prevent it. This effort has been genuine, extensive
and biased in its favor. Thus, it has also blocked effective
measures (e.g., reduced number of outlets and hours of
sale; server liability) that might also reduce over all
consumption or which look to place responsibilities on
anyone other than the individual driver. The industry’s
recognition that drinking and driving is a major
The National Association of Attorneys
General at their March 22-24, 2000, meeting
passed a resolution that commended The
Robert Wood Johnson Foundation for its
funding of an alcohol policy advocacy
program (Reducing Underage Drinking
through Coalitions), and called upon the
Federal Trade Commission to review its
1999 report on alcohol advertising to
minors which concluded that the industry
was taking steps to prevent underage drinking.
Shortly thereafter, Anheuser-Busch invited
the Attorneys General to send a letter to the
parents in their states at the company’s
expense and accompanied by company
parents’ oriented materials and containing
company logos. The now former attorney
general of Texas mailed such a package.
concern and hazard for all is not a recognition that the
product involved is a problem (only how it is used) nor
that the causes of the problem can be multiple. It has
supported effective laws to reduce underage drinking
and driving, to punish drinking drivers and to wage
public media campaigns against drinking and driving.
Simultaneously, most of the industry has actively
resisted or tried to discredit policies to lower the legal
permissible alcohol level or that point to server, seller
and advertiser contributions to the problem. These
efforts have been part of the nation’s success in reducing
drink/drive fatalities and simultaneously limiting
national options for doing so.
This effort has helped draw attention away from the
alcohol industry’s role in blocking other effective policies
and has given the appearance of extensive collaboration
which exists only in so far as it supports their over all
mission of normalizing drinking and maintaining
widespread availability. Through participation in
22
anti-impaired driving collaborations, it adds its support
to policies it favors, while blocking directions other
collaborators might want to take but which the industry
opposes. Because of this opposition, a consensus cannot
be reached and advocates often wind up only working
on industry approved steps. Some independent
organizations such as Mothers Against Drunk Driving
(MADD) set their own directions regardless, but many
transportation groups receive federal funding which
requires that all players – including the alcohol industry –
be allowed to participate.
EDUCATION FOR INDUSTRY GOALS
The industry produces attractive, expensive “education”
materials it widely disseminates free to a public starved
for good quality, inexpensive materials. The industry
uses drink-in-moderation messages simultaneously for
public education, public relations and policy purposes.
The messages are disseminated by numerous industry
representatives (e.g., DISCUS, the Beer Institute),
industry-created social concerns organizations (e.g.,
ICAP, The Century Council), and industry-funded
organizations that promote strategies and messages the
industry supports as some social norms campaigns
which may argue against policy changes (e.g., in 2000,
Anheuser-Busch provided a $105,000 to open a social
norms research center at Northern Illinois University
and then contributed nearly $400,000 to social norms
marketing programs on seven university campuses
50
).
The policy implications of industry messages are
consistent: Environmental and legislative strategies
are not the answer (“we have too many”; “they don’t
work”; “they punish the vast majority”), and
the responsibility for “safe” drinking lies solely with the
individual drinker (or, in the case of underage drinking,
with the individual’s parent as well) and education of
the drinker.
51
Policies which penalize individual consumers
for transgressions are supported; those that hold or
restrict sellers, advertisers or producers are strenuously
opposed. The industry is quick to claim credit for any
statistical reductions in alcohol-related harm, and
equally quick to oppose measures most scientific studies
indicate result in those reductions (minimum-age
drinking laws, not allowing minors’ entry to bars, BAC
level reductions, drunk-driving laws, tax increases, etc.).
It takes out ads to congratulate parents for working with
them to reduce underage drinking but then also blames
parents for any remaining underage drinking that
continues - while admitting no industry responsibility
for such problems. Also absent are discussions or
portrayals of problems related to alcohol use – alcohol
abuse, alcoholism, overdose, hangover, domestic
violence, etc. In effect, the industry blames its
customers for problems while excusing its own or its
product’s liability.
Vague, catchy slogans such as “think before you drink”
and “know when to say when” promote the assumption
that drinkers, if properly warned, can best decide for
themselves or even know how much is “too much.”
These decisions are encouraged among drinkers who,
the messages fail to say, have been drinking and thus not
able to think clearly. In fact, research on self-assessment
indicates that drinkers cannot accurately assess their
levels of blood alcohol and impairment.
52
While
ostensibly encouraging moderation, industry-sponsored
messages carefully avoid any exact definition of
moderate drinking, which has been defined by the
U. S. Department of Agriculture as no more than two
drinks a day for men and no more than one drink a day
for women.
53
As only 25 percent of alcohol consumption
occurs at or below these levels,
54
the industry’s incentive
with regard to the promotion of moderate drinking is
not difficult to ascertain. Anheuser-Busch’s $40 million
"Responsible Drinking" campaign, launched in 1999,
55
focused on re-enforcing the responsibility of retailers,
designated drivers and parents. But notably absent from
the many television, radio and print ads was any mention
of exactly when to say “when,” i.e., when to stop buying
and drinking. Independent, scientific verification that
these programs work is rarely found in the research
literature.
56
In fact, they have been little studied and
the industry has not produced any evidence that they
do work – except that participants like them and use
them and that the industry widely distributes them.
23
Each industry segment produces merchant and server
education materials and programs to prevent over-service,
service and sales to minors, and to prevent problems
related to alcohol in drinking establishments. These
have had some positive impacts and improved the
industry’s public image. But research has also indicated
that without legal mandates and enforcement, these
voluntary policies have very limited impact.
57
However,
mandated server training, sales to youth compliance
checks, management of legal accountability for employee
behaviors, and strictly enforced licensing laws are
vigorously opposed by the industry.
COUNTER-PREVENTION
To fend off accusations or deter reform initiatives, industry
prevention groups rely on misleading and emotionally
charged responses. Activists spotlighting the industry’s
or product’s role in facilitating alcohol-related problems,
or lawmakers attempting to target alcohol companies
with tax increases or other regulatory initiatives are
quickly labeled “neo-prohibitionists” or interfering
“nannies.” These terms evoke an image of extremism
and intolerance which has proven effective messaging
to state and federal legislators and in opinion polls.
Other common industry arguments against controls
on alcohol are:
• Price increases or tax hikes target the poor and
working class (hence, restricting their ability to
purchase a more expensive product);
• Price has no impact on consumption
• Alcoholics and those who abuse alcohol are going
to drink “no matter what”
• Restrictions on the industry will result in loss of jobs
and unemployment
• Only a small percentage of people drink irresponsibly
and therefore alcohol problems are grossly exaggerated
• The industry is already heavily regulated and taxed
and, besides, can monitor itself
• Controls mean total prohibition – the denial of the
right to drink and feel good.
Industry educational materials are often a direct
response to prevention efforts or lobbying that could
potentially threaten their marketing practices. Its
various anti-drunk driving educational campaigns are
a counter to the efforts of Mothers Against Drunk
Driving and other organizations to enact various alcohol
policy measures to address the issue. When law enforcement
began focusing on illegal alcohol sales to minors,
the Century Council, a distilled spirits-funded organization,
developed the “Cops in Shops” program to shift the
responsibility from the retailer to the underage buyer.
58
The industry has supported penalties for underage
possession and consumption of alcohol but opposes
compliance checks that focus on apprehension of adult
sellers and the reduction of sales to minors.
Industry-sponsored college campus programs emerged
after several alcohol-related school tragedies led to a
reexamination of collegiate environments and efforts
to remove alcohol promotions and sales from college
campuses. The Century Council, for example, created
a publication (Promising Practices: Campus Alcohol
Strategies, 1996) it sent free to every university president
and their boards of trustees highlighting “programs of
excellence for America’s Colleges and Universities.”
As is often the case with industry “prevention” materials,
there was no evaluation of whether these programs were
effective. Discussion of law enforcement centered on
punishment of student drinking violations, and there
was little indication that there was a wide range of
possibilities regarding community alcohol policy
research, alcohol policies and university collaboration
with their communities on these policies. In fact,
a number of the campus programs cited also included
extensive policy components that failed to make it into
the book. None of the scientific policy research which
was easily identified a few years later for the National
Institute on Alcohol Abuse and Alcoholism, seemed
to have been noticed. According to Peter Cressy, the
CEO of Distilled Spirits Council of the United States
(DISCUS), whose members fund the Century Council
(for which Cressy often appears at major press events),
24
“DISCUS is working to ensure cultural acceptance of
alcohol beverages by “normalizing” them in the minds
of consumers as a healthy part of a normal lifestyle.”
59
Prevention materials and ads, with company and brand
names prominently placed, have an added effect of
boosting brand and corporate name recognition,
particularly among young people, at whom many of the
ads are targeted. One evaluation even found that the
beer industry’s moderation messages were confusing and
often perceived as encouraging alcohol use.
60
At any
rate, compared to their product advertising, the level of
industry contributions to “responsibility advertising”
(i.e., to warn against drinking and driving, encourage
use of designated drivers, advise consumers to drink
responsibly, inform that the legal drinking age is 21)
is miniscule. A 2003 report from the Georgetown
University Center on Alcohol Marketing and Youth
61
found that in 2001 the alcohol industry placed 208,909
commercials promoting alcoholic beverages at a cost of
$811,166,404 (95.7 percent of the total) compared to
its 2,379 responsibility ads at a cost of $23,217,943 (2.7
percent of total). Compared to the responsibility ads,
the product ads had over 45 times more TV audience
(ages 12+) exposure and were seen more by adults than
youth (including drinking age ads). Industry-wide,
Anheuser-Busch and Coors accounted for 95 percent
of the reported responsibility advertising. This report
did not include ads paid for by industry associations
or industry funded organizations nor alcohol education
expenditures outside of television advertising.
Industry sponsorship and contributions to prevention
and social causes also help to increase influence among
recipients – some of whom may also come to depend
on those funds for particular activities.
62
Recipients of
such funds are more likely to have a positive image of
the donor and are less likely to criticize them or support
measures those donors oppose – for fear of having funds
cut off. Of course, donations do not usually go to groups
that might criticize industry behaviors or highlight
the negative impacts of alcohol on society (including
treatment programs). But one can also see a more
pervasive impact when one looks at some community
funding groups who abstain from funding advocacy
programs that might target major funding sources (e.g.,
alcohol and tobacco companies). Funding recipients
may very well receive a warning to discontinue their
critiques if they want their funding to continue. In
addition to attempt to control an organization that
funds, the industry uses the organization it supports
to buy credibility. It co-opts the good name of these
community/civic groups and connects their good work
with the name of the alcohol industry funder. For a
further discussion of the impacts of alcohol industry
funding on recipients, see Partner or Foe?: The Alcohol
Industry, Youth Alcohol Problems, and Alcohol Policy
Solutions at www.AlcoholPolicyMD.com.
Another example of the alcohol industry’s questionable
commitment to safe drinking is the case of warning
labels. In 1988 Congress passed the Alcohol Beverage
Labeling Act, requiring alcohol companies to inform
the public and alcohol consumers of serious risks
related to alcohol consumption. But in a national
survey, nearly three out of four drinkers agreed with
the statement that warning messages "sometimes
appear in the least prominent place on containers,
making them difficult to notice and read." Among
drinkers, only 34 percent said they generally noticed
the warning label.
63
There has been no industry
demand that the labels contain the U.S. Dietary
Guideline recommendations limiting consumption
to no more than one or two drinks per day. As with other
commercial warning labels, these also have the potential
of reducing the liability of alcohol producers who can
claim that consumers were forewarned.
POLICY
The alcohol industry has ample political muscle and
can be a formidable foe. In the late 1980s and early
1990s, the Center for Substance Abuse Prevention
(CSAP), a federal agency within the Department of
Health and Human Services, was a strong proponent
of environmental-based strategies for dealing with
alcohol-related problems. It funded numerous
community action programs that included such
strategies.
64
However, aggressive attacks by the alcohol
25
“SHOULD FEDERAL PROGRAMS LINK THE USE OF ILLEGAL DRUGS WITH THE CONSUMPTION OF BEER?”
National Beer Wholesalers Association Position:
“ It is misrepresentative to state that beer is a drug.
Beer is deemed legal for persons over 21, consumed
safely and responsibly by 85 million Americans, has
food value and is the beverage of choice for many adults.
Increasingly medical evidence shows the moderate
consumption of beer to be beneficial to health, and the
American Cancer Society reports that moderate drinkers
have a 30-40 percent lower risk of dying of cardiovascular
disease. Attempts to link beer with illegal drugs weaken
the greatly needed credibility of legitimate and properly
targeted programs established to treat alcohol abuse
and illegal drug use.”
Source: NBWA
Web Site: www.nba.org/policy/link_beer.html; visited 02/20/2003
The American Cancer Society actually emphasizes the
connection between breast cancer risk and moderate
alcohol use: “Alcohol Increases Hormone Levels, Raising
Breast Cancer Risk” – “Drinking a daily glass of wine
may ward off heart problems, but the opposite may be
true when it comes to breast cancer. Even small amounts
of alcohol may increase hormone levels circulating in the
blood that could raise breast cancer risk…” and “Alcohol
Intake Tied to Breast Cancer Risk Even Moderate Drinking
Affects Chances” – Despite earlier reports, more recent
studies leave little doubt that alcohol intake increases
breast cancer risk.”
The cancer society goes on to associate alcohol consumption
with other cancers. According to The Complete Guide –
Nutrition and Physical Activity, “If you drink alcoholic
beverages, limit consumption. People who drink alcohol
should limit their intake to no more than 2 drinks per day
for men and 1 drink a day for women . . . Alcohol is an
established cause of cancers of the:
• Mouth
• Pharynx (throat)
• Larynx (voice box)
• Esophagus
• Liver
• Breast
Alcohol may also increase the risk of colon cancer.”
Source: www.cancer.org
industry effectively dismantled this portion of CSAP’s
programs. Reflecting industry pressures to not have
alcohol labeled as a drug, the agency’s terminology
changed from “alcohol and other drugs” to “substance
abuse” (which minimized attention to alcohol) and
“alcohol and drug abuse” (which implies that alcohol
is not a drug). The industry has successfully derailed
advertising and tax reform, and has thwarted many
local city or county-based initiatives by lobbying
on behalf of weaker, less likely to be enforced
statewide ordinances.
65
Increasing excise taxes can be an effective means to
reduce underage drinking. This is especially true for
beer, the most popular alcoholic beverage consumed by
youth.
66
Although in general the industry actively
opposes increases in taxes upon its products and services,
one sector might not complain when another sector is
threatened with an increase in tax rates. It is more likely,
however, that the sectors most heavily taxed (wine and
distilled spirits) want rates equalized to the lowest
common denominator (i.e., beer). Occasionally one
might see active support for a tax increase if the tax will
be used to benefit that sector (e.g., to assist product
research or promotion).
67
INFLUENCING LEGISLATORS
Like most industries, “the alcohol industry pays careful
attention to legislative processes and commits considerable
resources to making its concerns known to elected and
appointed officials in all levels of government. Trade
groups such as the Distilled Spirits Council of the
United States, the National Beer Wholesalers
Association, and the Wine and Spirits Wholesalers of
America represent alcohol industry interests to the
media, the public and especially the government.
26
Through its political action committees (PACs),
the alcohol industry gave $2.3 million to Federal
candidates during the 1997-1998 campaign cycle.”
68
“If our products are culturally accepted and our legislators
and regulators recognize that this is part of a normal,
healthy lifestyle, we think we can create an environment
where we are not demonized, where we’re not subject
to stings every other week, where we are recognized as
a responsible part of the community.” Peter Cressy,
CEO, DISCUS
69
The industry has contributed $27.3 million to national
parties and federal candidates since 1991, including
$13.6 million in soft money between 1995 and 2001.
In the 2000 election year alone, over $7.9 million was
donated by alcohol interests and affiliates to various
state and local candidates. These donations are firmly
bipartisan and effective at promoting the industry’s
legislative agenda.
70
Thirty out of 34 Senators elected
in 1998 - including 15 Republicans and 15 Democrats -
accepted contributions from alcohol PACs, totaling
more than $400,000.
71,72
The alcohol industry like
other lobbying groups also recruits from among former
federal and state elected and administrative officials.
For example, former New York Congresswoman Susan
Molinari is the Chairman of The Century Council
(the liquor industry-funded group that deals with
drunk driving and underage drinking). Ron Sarasin,
another Congressman, went on to serve as President
of the National Beer Wholesalers Association. Former
U.S. Federal Trade Commissioner Roscoe B. Starek, III
was their Senior Vice President of Government
Affairs. John De Luca, former head of the Wine
Institute, previously headed the government’s NIAAA.
In 2000, Congress finally passed legislation that would
require states to lower the minimum blood alcohol
level allowed for operating a motor vehicle to .08,
but pressure from the alcohol industry was instrumental
in blocking the legislation for years, despite overwhelming
support from health, medical, insurance, and consumer
groups, as well as public opinion polls. In 1999 the
alcohol industry successfully blocked legislation in
Congress to earmark a portion of the $195 million
set aside for anti-drug advertisements for ads to
prevent underage drinking. “I guess this was a real
experience in how powerful outside interests can be,
regardless of the merits of the case,” concluded Rep.
Lucille Roy-bal-Allard, who sponsored the legislation
in the House.
73
The industry also has a number of allies that often
collaborate with it at the state and local level. Most
of these are groups that typically also profit from the
sale of alcohol (depending on what state laws allow):
convenience stores, restaurants and taverns, grocers,
gas stations, pharmacies, tourism groups, hotels,
billboard and advertising groups. Other groups who
may have shared interests are business associations
(especially regarding taxes), the tobacco industry
and groups that sell their products to the alcohol
industry. The particular configuration may vary by
state and municipality but the industry rarely has to
act without allies.
POWERFUL, YET NOT INVINCIBLE
At the local level, when not preempted from doing
so by state laws, one commonly sees ongoing, often
successful efforts to curb practices that lead to the
violence, injury and property damage related to alcohol
use. Communities are far more prone to restrict alcohol
advertising (e.g., near schools and churches, on
billboards), to uphold health and safety codes, and to
generally express concerns about the problems alcohol
may pose.
74
While alcohol industry interests are present
in every community, municipalities supported by local
citizen action groups have a track record of passing
more stringent policies than are typically passed at the
state level.
75
However, state legislatures are also the scenes of serious
successful efforts to control the harm that alcohol may
cause. In 1994, the California State Legislature passed
the “Three Strikes and You’re Out” law which permits
alcohol license revocation if a vendor is caught selling
alcohol to minors three times in a three-year period.
BEER, WINE & LIQUOR DONATIONS FOR THE 2001-2002 ELECTION CYCLE
(These figures do not include additional contributions for local and state elections.)
27
TOTAL INDUSTRY DONATIONS TO BOTH PARTIES COMBINED: $5,465,718
The law also gave community members concerned
with underage sales to minors the mechanism to shut
down retailers that would not comply with the law. In
addition, that same year, the California Supreme Court
ruled that minors could be used as decoys to conduct
compliance checks on licensees. In 1998, a California
state senator from San Diego introduced Senate Bill
1696, which essentially allowed a fourth violation in
a three-year period and restricted the Alcohol Beverage
Service Department’s grant funding for decoy
programs. Multiple food and beverage retail associations,
big breweries such as Anheuser-Busch and Miller,
as well as the Wine Institute, supported the bill.
But after health and safety groups opposing the bill
successfully used media advocacy to target the industry
and the bill’s sponsor, the bill was amended by removing
the fourth strike provision and keeping the grant
funding for the minor decoy programs.
76
Although tax increases have been shown to be the
single most effective means of lowering the rates of
alcohol-related problems - among young people in
particular - attempts to increase alcohol taxes have
been far less successful than similar efforts to raise
taxes on tobacco products. In 1991, for example,
the alcohol industry spent an estimated $30 million
To Democrats To Republicans
(Total for all 30 donors listed - $2,517,812.) (Total for all 59 donors listed - $2,947,906)
10 Largest Donors Total 10 Largest Donors Total
Anheuser-Busch Co Inc $726,914 Anheuser-Busch Co Inc $1,040,902
Stryker, Pat 710,000 National Beer Wholesalers Assn 260,166
E&J Gallo Winery 205,000 Distilled Spirits Council of the US Inc 209,166
Diageo PLC 116,375 Diageo PLC 188,802
Distilled Spirits Council of the US Inc 103,800 Brown-Forman Corp 148,586
Philip Morris Cos Inc 93,000 Phillips Products Co 125,000
Brown-Forman Corp 80,000 Coors Brewing 122,932
National Beer Wholesalers Assn 69,090 Allied Domecq Spirits & Wine USA Inc 119,118
Southern Wine & Spirits 68,352 Wine & Spirits Wholesalers of America 118,480
Bacardi Martini USA Inc 60,000 Silver Eagle Distributors Inc 112,350
Vivendi Universal 60,000
Source: www.commoncause.org; “Soft Money Laundromat – Soft money donors matching the industry of “Beer, Wine & Liquor”
for the 2001-2002 election cycle.”
28
to defeat the relatively benign “nickel a drink” tax
in California, and the industry’s diligence has resulted
in the derailment of similar measures in other states.
77
The relatively static rate of alcohol taxes has also
meant that alcohol prices have increased far less than
those of other consumer goods. It is not uncommon
for beer to be available at corner stores for less than
the price of milk or water. However, when governments
find themselves with shrinking revenue bases,
the appeal of increasing alcohol excise taxes
greatly increases.
Victories can be won when a broad coalition of
grassroots community people speak up. In 2002, the
State of Alaska equalized the taxes on alcohol products
to 10 cents on each, and Puerto Rico raised the alcohol
tax on beer, wine and spirits by 30 percent. In 2001-
2002 local and state victories were achieved through
campus-community activist coalitions seeking to enact
policies to reduce high risk and binge drinking by
college students. See A Matter of Degree Advocacy
Initiative at www.AlcoholPolicyMD.com.
Currently, the beer industry, led by the National Beer
Wholesalers Association, is urging Congress to lower
the federal excise tax on beer, and more than 200
U.S. lawmakers, many of whom receive political
contributions from the alcoholic-beverage industry,
have indicated their support for the tax cut proposals.
78
Campaigning by the beer industry focuses on the
harm done to working-class Americans by the “unfair”
and “regressive” beer tax,
79
although a national public
opinion poll released by Center for Science in the
Public Interest showed that by a 2 to 1 margin,
Americans oppose rolling back the federal excise tax
on beer.
80
Anheuser-Busch has even devoted an entire
website to the cause: www.rollbackthebeertax.org.
CONCLUSION
The alcohol industry is a complex, international industry
with great economic and political power and impacts at
all levels of society and around the globe. It is powerful but
not invincible and not always united. It seeks to keep
everyone’s focus on what may be desirable and pleasant
about the product. But it also knows it has a major source
of weakness: alcohol itself and the dangers, risks and
great harm to life, health and community well-being that it
engenders. Although industry segments may conflict over
particular issues and fight for market share, as a whole it
seeks to maximize its profits and create a policy and
legislative environment favorable to its operations with as
few controls as possible. As a whole the industry seeks to
build, maintain and expand product and brand loyalty
and sales, and to obscure its role as anything other than
a good corporate citizen. While marketing and promotion
promote consumption and sales through an image of
alcohol’s connections with all the good things in life (and
none of the bad), the goal of the industry is to act
to increase profits and sales, to maintain and enlarge its
consumer base, and to create an environment (political,
economic, cultural) conducive to reaching these goals. It is
not interested in reducing its scale, consumption of its
product or its abilities to operate as it sees fit. Anyone
concerned about the harms related to alcohol consumption
needs to keep this in mind.
REFERENCES
1
2002 retail sales; Adams Beer Handbook, 2003
Edition. Adams Business Research, Norwalk, CT.
2003.
2
Adams Beer Handbook, 2003 Edition. Adams
Business Research, Norwalk, CT. 2003.
3
Jernigan, DH, & Mosher, JF. An environmental
approach to the prevention of alcohol-related
problems: an introductory text on alcohol problems.
Unpublished manuscript. San Francisco: Trauma
Foundation, 1987.
4
Impact Databank Review and Forecast 2001:
The U.S. Beer Market. New York, NY: M Shanken
Communications, 2001.
5
ATF Online.http://www.atf.treas.gov/about/history.htm.
6
Of these, 11 directly intervene in some sectors of
both the wholesale and retail off-sale markets
including three (New Hampshire, Pennsylvania and
Utah) exercise direct state control over the
wholesale and retail sales (i.e., sales are only through
state owned liquor stores) of alcoholic beverages with
moderate- to high-alcohol content, such as table
wine, spirits, and fortified wine. Eight (Idaho,
Michigan, Montana, North Carolina, Ohio, Oregon,
Vermont, and Washington) have direct control over
the wholesale and off-sale of high-alcohol-content
beverages only, such as spirits and fortified wine.
Seven other “control states” directly intervene only
in the wholesale market. Of these, two (Mississippi
and Wyoming) exercise direct control over the
wholesale of both moderate- and high-alcohol-
content beverages, and five (Alabama, Iowa, Maine,
Virginia, and West Virginia) directly control only the
sale of high-alcohol content beverages.
7
Alcohol Epidemiology Program. Alcohol Policies in
the United States: Highlights from the 50 States.
Minneapolis: University of Minnesota, 2000.
8
DrugStrategies. Keeping Score on Alcohol.
Washington, DC: DrugStrategies; 1999. p.33.
9
Examples of this impact are growing more numerous.
In 2002 the Stepping Up Coalition of Iowa City
sought to eliminate drink specials in the bars
surrounding the University of Iowa campus. Local
bar owners publicly went to Anheuser-Busch in St.
Louis for help. At a recent hospitality group meeting
in Chicago (October 2003) an international liquor
producer discussed how local licensing laws could be
changed to favor increasing the number of sales
outlets.
10
Donahue, TS. “Anheuser-Busch to pay Maris family
$50 million.” The Independent Florida Alligator,
August 30, 2001.
11
Impact Databank Review and Forecast 2001.
supra n. 1.
12
Dow Jones Newswires, “Bear Market is Beer Market
for Anheuser-Busch.” Wall Street Journal Online,
January 20,2003.http://online.wsj.com/article.
13
Salter J. “Anheuser-Busch Claims Half of Beer
Market” Business AP athttp://story.news.yahoo.com/news, 04/30/2003.
14
Impact Databank Review and Forecast 2001.
supra n. 1.
15
Impact Databank Review and Forecast 2001.
supra n. 1.
16
“Craft Brewing Industry Statistics” and “Association
of Brewers reports US craft beer production grows 3.4
percent” Press Release (3/21/03); www.aob.org
3/24/03.
17
Adams Beer Handbook, 2003 Edition. Adams
Business Research, Norwalk, CT. 2003.
18
Impact Databank Review and Forecast 2001.
supra n. 1.
19
Adams Beer Handbook, 2003 Edition. Adams
Business Research, Norwalk, CT. 2003.
20
Impact Databank Review and Forecast 2001.
supra n. 1.
21
www.datamonitor.com; 7/01/03.
22
“Beer battles to come.” Modern Brewery Age, March
31,2003; Vol. 54, No.13; pp 6-13.
23
World Health Organization. Global Status Report on
Alcohol. Geneva: World Health Organization, 1999.
24
Willman, J. “Time for another round.” Financial
Times, June 21, 1999.
25
Jernigan, DH. Thirsting for markets: the global
impact of corporate alcohol. San Rafael, Ca: The
Marin Institute for the Prevention of Alcohol and
Other Drug Problems, 1997.
26
Impact Databank Review and Forecast 2001.
supra n. 1.
27
Federal Trade Commission. Self Regulation in the
Alcohol Industry: A Review of Industry Efforts to
Avoid Promoting Alcohol to Underage Consumers.
Washington, D.C., 1999.
28
Adams Business Media, Blisard N et al, 1999.
29
The National Institute on Alcohol Abuse and
Alcoholism (NIAAA), an agency of the U.S.
Department of Health and Human Services,
supports and conducts research and information
dissemination on the causes, consequences,
treatment, and prevention of alcoholism and
alcohol-related problems. It is the only federal
agency focused solely upon alcohol issues.
30
Eigan, Lewis. Alcohol Practices, Policies and
Potentials of American Colleges and Universities.
U.S, Department of Health and Human Services,
1991.
31
Jernigan, DH. Global Status Report: Alcohol and
Young People. Geneva: World Health Organization,
2001.
30
31
32
Fleming, D, & Zwiebach, P. “UDV unveils first-ever
global Johnnie Walker ads.” Impact, 1999,
29(23):1,18-19, December 1.
33
Center on Alcohol Marketing and Youth. Television:
Alcohol’s Vast Adland. Georgetown University,
Center on Alcohol Marketing and Youth.
Washington, DC: 2002.
34
Federal Trade Commission. Self-Regulation in the
Alcohol Industry: A Review of Industry Efforts to
Avoid Promoting Alcohol to Underage Consumers,
Appendix A [FTC Report]. Washington, DC: FTC,
September 1999.
35
Center for Science in the Public Interest. “Kids in
the Crosshairs of Big Booze.” CSPI News Release,
July 16, 2002.
36
Garfield CF, Chung PJ, Rathouz PJ. “Alcohol
advertising in magazines and adolescent readership.”
JAMA. 2003;289:2424-2429.
37
Center on Alcohol Marketing and Youth. Youth
Exposure to Alcohol Ads on Television, 2002: from
2001 to 2002, Alcohol’s Adland Grew Vaster.
Georgetown University, Center on Alcohol
Marketing and Youth. Washington, DC: 2004.
38
Ibid
39
Babor TF, Edwards G, Stockwell T. “Science and
the drinks industry: cause for concern.” Addiction
1996. 91(1),5-9.
40
A Brewing Controversy, Sonia Nazario, LA
Times,March 21, 1999.
41
Alcohol Ads Aim at Ethnicity Fact Sheet, May
2002. Institute of Public Strategies
42
Cinco de Mayo grows to fiesta proportions in U.S.,
Adam Ramirez, Miami Herald, May 4, 1999
43
Ibid
44
Center on Alcohol Marketing and Youth, Exposure
of Hispanic Youth to Alcohol Advertising.
Georgetown University, Center on Alcohol
Marketing and Youth. Washington, DC: 2003.
45
Ibid, 13
46
See e.g., D. Jernigan and P. Wright, eds., Making
News, Changing Policy: Using Media Advocacy to
Change Alcohol and Tobacco Policy (Rockville,
MD: Center for Substance Abuse Prevention, 1994);
B. Gallegos, Chasing the Frogs and Camels out of
Los Angeles: The Movement to Limit Alcohol and
Tobacco Billboards: A Case Study (San Rafael, CA:
The Marin Institute for the Prevention of Alcohol
and Other Drug Problems, 1999)
47
Center on Alcohol Marketing and Youth, Exposure of
African-American Youth to Alcohol Advertising.
Georgetown University, Center on Alcohol
Marketing and Youth. Washington, DC: 2003.
48
Mosher, JF. What place for alcoholic beverage
container labels? A view from the United States.
Addiction, 92(7):791, 1997.
49
2001 National Household Survey.
50
Murray, S, & Gruley, B. “On many campus, big
brewers play a role in new alcohol policies.”
Wall Street Journal, November 2, 2000.
51
An example of these stances was seen in a May 15,
2001 industry letter attacking a local Tallahasee
alcohol control coalition (PAR - Partnership for
Alcohol Responsibility) action plan. The letter was
signed by the Florida Restaurant Association, Retail
Beverage Council of the Florida Retail Federation,
Wine and Spirits Distributors of Florida Association,
Florida Beer Wholesalers Association (including
Tri-Eagle Sales) [Tri-Eagle is the largest state
distributor for Anheuser-Busch and is run by a
member of the Busch family]. Some statements
contained in the letter include: “Problems cannot
be legislated out of existence”; “Additional laws
aren’t needed. We support and encourage
enforcement of what’s already on the books.”;
“We strongly favor and have worked to reiterate
voluntary responsible advertising and promotion
guidelines.”
52
United States Department of Transportation. Driving
Under the Influence: A Report to congress on
Alcohol Limits. National Highway Traffic Safety
Administration; October, 1992; D1-3.
53
United States Department of Agriculture website.http://www.usda.gov/
54
2001 National Household Survey. supra n. 20.
55
“A-B debuts $40 million responsibility campaign.”
Beverage Dynamics, 110(9):5, November/December,
1999.
56
The Committee on Developing a Strategy to Reduce
and Prevent Underage Drinking of the Institute of
Medicine National Research council indicated that
they were “aware of only one industry-sponsored
education program that has been independently
evaluated – Alcohol 101.” They went on to
recommend that “industry efforts to prevent and
reduce underage drinking, however sincere, should
be redirected and strengthened.“ (National Research
Council and Institute of Medicine Reducing
Underage Drinking: A Collective Responsibility.
Committee on Developing a Strategy to Reduce
Underage Drinking, Richard J. Bonnie and Mary
Ellen O’Connell, eds. Washington, DC: The
National Academies Press. 2003; pp131-132.) TIPS
has been independently evaluated as effective in
some respects by the NIAAA, whose founder, Morris
Chafetz originally designed the program. There have
been many evaluations of drink drive policy and
reduction campaigns in which the alcohol industry
participates.
57
Prevention Research Center (Berkeley, CA). Guide
to Responsible Alcohol Sales: Off-Premise Clerk,
Licensee, and Manager Training. Calverton, MD:
32
Pacific Institute for Research and Evaluation, 1999.
58
Mosher, J. The merchants, not the customers:
Resisting the alcohol and tobacco industries’
strategyto blame young people for illegal alcohol
and tobacco sales. Journal of Public Health Policy,
16:412-429, 1995.
59
As reported in the March 2000 Nightclub Magazine,
Mitchell Diggs, “Growth Prospects. Cultural
Acceptance seen as Key to Boosting Industry Sales.”
www.nightclub.com/magazine/March00/growth.html
60
DeJong, et al. “A critical analysis of ‘moderation’
advertising sponsored by the beer industry:
Are ‘responsible drinking’ commercials done
responsibly?”m Milbank Quarterly, 70:661-679,
1992.
61
Center on Alcohol Marketing and Youth. Drops in
the Bucket: Alcohol Industry “Responsibility”
Advertising on Television in 2001. Georgetown
University, Center on Alcohol Marketing and Youth.
Washington, DC: 2003.
62
Center for Science in the Public Interest. Paying the
Piper. The Effect of Industry Funding on Alcohol
Prevention Priorities. March 1996.
“Sell a Case, Save a Kid? Activists Knock Health
Charities for Taking Alcohol $.” The Marin Institute
for the Prevention of alcohol and Other Drug
Problems. Winter 1993.
Wallack L.”Warning”: the alcohol industry is not
your friend? Addiction 87:1109-1119;1992.
63
Center For Science in the Public Interest. “Alcohol
warning labels go unnoticed, poll finds.” CSPI News
Release, August 20, 2001.
64
Mosher, J. “Absolute Influence: The structure,
wealth, and power of the alcohol industry.” Slide Set
5 in The Alcohol Policy Slide Set Series: Resources
for Organizing and Advocacy. San Rafael, CA: The
Marin Institute for the Prevention of Alcohol and
Other Drug Problems, 1997.
65
Mosher, J. The Perils of Preemption. Briefing paper.
Chicago, IL: American Medical Association, 2001.
66
See National Research Council and Institute of
Medicine Reducing Underage Drinking:
A Collective Responsibility. Committee on
Developing a Strategy to Reduce Underage
Drinking, Richard J. Bonnie and Mary Ellen
O’Connell, eds. Washington, DC: The National
Academies Press. 2003; pp242-246.
67
For example, in both 1983 and 2002 a 6 cents per
gallon increase on wine taxes passed without
opposition and with industry support. The tax
increase was earmarked for research and promotion
of Missouri wine! (for bill language seeHttp://www.moga.state.mo.us/statutes/C300-
399/3110554.HTM). Conversely, the low rates on
beer, and the liquor tax rate have not bee increased
since 1970 and all proceeds go to state General
Revenue. At the same time, the state’s Division of
Liquor control has had its budget reduced by 30
percent in the last few years.
68
Drug Strategies. Keeping Score on Alcohol.
Washington, DC: DrugStrategies,1999. p. 33.
69
As reported in the March 2000 Nightclub Magazine,
Mitchell Diggs, “Growth Prospects. Cultural
Acceptance seen as Key to Boosting Industry Sales.”
www.nightclub.com/magazine/March00/growth.html
70
Common Cause. Under the Influence: Congress
Backs Down to Big Booze. Follow the Dollar Report.
At www.commoncause.org/publications/booze-
exec.htm. 1998.
71
The National Institute on Money in State Politics
website.http://www.followthemoney.org
72
Common Cause website.http://www.commoncause.org/
73
Common Cause. “Addiction Industries and
Campaign Finance Reform (factsheet).” Washington
DC: Common Cause, June, 2001.
74
See, for example the following publications produced
by the Center for Science in the Public Interest
(CSPI) (www.cspinet.org): McMahon ET, Taylor PA.
Citizens’ Action Handbook on Alcohol and Tobacco
Billboard Advertising; Erenberg DE, Hacker GA.
Last Call for High-Risk Bar Promotions that Target
College Students.
75
See Ch 11, “Communities” in National Research
Council and Institute of Medicine, Reducing
Underage Drinking: A Collective Responsibility.
Committee on Developing a Strategy to Reduce
Underage Drinking, Richard J. Bonnie and Mary
Ellen O’Connell, eds. Washington, DC: The
National Academies Press. 2003; pp. 218-233.
76
Ryan, BE, & Mosher, JF. The campaign against SB
1696: No 4th strike for California retailers who sell
alcohol to minors. San Rafael, CA: The Marin
Institute for the Prevention of Alcohol and Other
Drug Problems, 2000.
77
Alcohol-Related Injury & Violence (ARIV). Taking
Initiative: The 1990 Citizens' Movement to Raise
California Alcohol Excise Taxes to Save Lives. San
Francisco, CA: Trauma Foundation.http://www.tf.org/tf/alcohol/ariv/case3.html.
78
Hanks, N. Moyse, M.”Safety, consumer
group, American public just say no to beer
industry’s “roll back the beer tax”. MADD
Press Release, April 16, 2002.
79
Beer Institute Online website.http://www.beerinst.org/pp_fedexcisetax.htm.
80
Hanks, N. Moyse, M. supra n. 48.

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