They've got Big Tobacco on the run. Now, Clinton Administration regulators are turning their sights on the liquor industry. The opening came in November, when the Distilled Spirits Council, worried by flagging sales, scuttled its voluntary ban against broadcast ads. But the Federal Trade Commission and Federal Communications Commission may find efforts to restrict alcohol ads on the air rough going.
The FTC's inquiry into advertising by Seagram Americas and Stroh Brewery Co. faces high legal hurdles that could stymie action. And the FCC must overcome clashes among fractious commissioners before it can push through any rule limiting broadcast ads for spirits. Meanwhile, liquor and beer makers can argue that their ads are not deceptive--and thus are legal--and that government efforts to silence them violate their free speech rights. "There are always problems in attempting to regulate lawful products lawfully advertised," says Washington communications lawyer Richard E. Wiley. "That's going to be a challenge for anybody."
PUBLIC OUTCRY. Unlike in their campaign against tobacco ads, the regulators enjoy support from normally antiregulatory Republicans in Congress who favor limits on alcohol ads on TV that reach kids. Although Senate Majority Leader Trent Lott (R-Miss.) and incoming Senate Commerce Committee Chairman John McCain (R-Ariz.) want to scrutinize these commercials, there's no indication that the GOP-led Congress would restrict ads on its own if the FTC or FCC fails to act. Instead, regulators and lawmakers may have to hope that a public outcry forces the industry to back down.
If liquor companies persist in advertising on TV, the FTC has the bureaucratic muscle to fight back: Chairman Robert Pitofsky usually commands at least three of the five-member commission's votes. But the agency's case against ads for Stroh's malt liquor--not its beers--and Seagram spirits faces the same legal difficulties that plagued its failed inquiry into R.J. Reynolds Tobacco Co.'s Joe Camel campaign.
As in that 1994 effort, the FTC is likely to pursue the "unfair advertising" theory that is based on relatively uncharted law. It must prove that Stroh and Seagram ads not only target underage consumers but have a harmful effect on them, such as inducing them to drink. On Dec. 2, both companies got subpoenas from the FTC requesting copies of recent broadcast commercials, their time slots, and the demographic composition of viewers at those times. The companies say they follow industry guidelines prohibiting marketing to consumers under 21.
DEADLOCK? With the FTC focusing on only two companies for now, consumer activists hoping for a sweeping ban against liquor ads are looking to the FCC. Under its powers to make sure that broadcasters serve the public interest, the agency has leeway to propose a broad rule limiting electronic ads for alcohol. It is mulling several options: banning advertising altogether, restricting time slots for commercials, and encouraging counter-ads on the ill effects of underage drinking.
But the FCC, now short one commissioner, often deadlocks 2 to 2 on contentious issues. Indeed, only Chairman Reed E. Hundt has come out strongly in favor of restrictions on liquor ads if the TV networks abandon their voluntary ban on accepting spirit ads. His usual ally, Susan Ness, has remained uncommitted, while frequent adversaries James H. Quello and Rachelle B. Chong oppose FCC action.
Should the FCC deadlock on the issue, Congress and the White House are likely to do little more than preach against marketing harmful products to kids. And that could leave the spirits industry raising a glass to Washington gridlock.