Alcohol Advertising in College Newspapers
- posted by Jim Leitzel @ 9:35 PM

The state of Virginia has a law that bans most alcohol advertising in college newspapers. Make that, they had a law -- a federal court has declared the law to be a violation of free speech guarantees. As a matter of law, the decision probably is sound. The state provides no evidence that the ad ban actually promotes the cause of reduced underage drinking -- and hence one of the planks of the "Central Hudson" test governing US commercial speech jurisprudence, that a valid regulation has to directly advance some substantial government interest, is not met. But as a matter of policy, I wonder if the standard approach to commercial speech is appropriate for vice-related goods. Not just "wonder" -- I believe that stricter controls on commercial vice speech will lead to increased freedom, as more vices will be legal if their advertising can effectively be controlled. (I prefer a version of the Posadas approach.)

Hard liquor advertising probably will continue to stay away from Virginia's college newspapers: the code of conduct for the spirits trade association does not allow ads in college papers. The Beer Institute's code has no such rule, but does preclude advertising that doesn't comply with a college's own regulations.

Labels: alcohol, litigation, marketing, teens

 
Regulating Ads for Sexual Services
- posted by Jim Leitzel @ 11:33 PM

This week's Economist has an interesting article on classified advertising in British newspapers for escort services or adult massages or other (presumably) sex-related businesses. There is a concern that some of the ads involve trafficked or underaged women, as opposed to voluntary adult workers. (Adult prostitution per se is legal in Britain, though street walking and the related activity of buyers, "kerb crawling" in cars, is illegal.) "Last month the South Wales Echo ran a story about trafficked women working in Cardiff, only to discover that all of the brothels named in the article had advertisements in the same issue." (Brothels, too, are illegal, as are the activities of pimps or organizers of escort services that provide sex.)

But the British understand harm reduction, so they have not rushed to ban the ads. Following the prostitute murders about one year ago in Ipswich, a local newspaper company consulted with the police, and they agreed to continue to run the ads, to try to keep as much of the trade above-ground as possible. The newspaper requires that such ads be paid for with a check or credit card, so that the advertiser can be located in the event that irregularities appear.

Labels: Britain, marketing, prostitution

 
British Internet Gambling Advertising Partial Ban
- posted by Jim Leitzel @ 11:02 AM

The new UK gambling regulations are going into effect and they include efforts to ensure that internet gambling providers are held to high standards. One such effort is to permit (as of September 1) the advertising of web-gambling sites only if they are located in a geographical location that provides a high level of regulatory oversight. This approaching regulation is both inducing some internet gambling providers to relocate, and some cyberbetting havens to upgrade their oversight.

Labels: Britain, gambling, internet, marketing

 
Towards Banning Brothels in Nevada?
- posted by Jim Leitzel @ 11:17 PM

A federal court decision has handed Nevada's legal brothels the right to advertise, even in those Nevada counties that do not permit legal prostitution. The court found the Nevada state laws banning brothel advertising to be overly broad, and hence inconsistent with the First amendment. But this is a case where more freedom today could well mean less tomorrow, if the marketing of brothels causes Nevada to join the other 49 states in banning them -- and their advertising. Somehow the judge failed to take the Vice Squad advice to follow the Posadas case.

Labels: marketing, Nevada, prostitution

 
Beer and Concentration...
- posted by Jim Leitzel @ 11:55 PM

...not always known for being travelling companions. But the concentration referred to is that of the beer industry itself. How much of the overall beer market is accounted for by the largest beer companies? It turns out that the answer to that question differs quite a bit between the US and Germany. I learned about it from an article by William James Adams, "Beer in Germany and the United States," published in the Journal of Economic Perspectives in Winter, 2006. In Germany in 2000, the top three beer manufacturers accounted for 24 percent of domestic beer shipments; in the US, alternatively, the top three producers that year accounted for 88 percent of domestic output. While craft beers have been on the rise in the States, they remain quite small (about 3.2 percent) in terms of the overall beer market; meanwhile, substantial regional breweries have been more-or-less eliminated in the US, but not in Germany. In the US, Anheuser-Busch produces a majority of the domestic beer output; in Germany, the largest producer accounts for only some 17 percent of output.

The Adams article tries to explain the difference in industry concentration. The overall story is fairly complex, but one of the big factors pushing towards concentration in the US market is an unusual economy of scale: it is not that average costs of production per se fall as brewery size increases, but rather, marketing becomes more effective. National television advertising was what propelled Anheuser-Busch and a few other large companies ahead of the regional breweries, which eventually succumbed.

But wait, don't they have TV in Germany, too? Well, yes, but the German TV market was arranged in such a way prior to 1990 that advertising on commercial television was not all that attractive and did not offer much of an advantage to national producers. The TV market has changed a lot since then, providing more of an advantage to national marketers, and concentration in the German beer market has been rising of late.

Adams doesn't mention it, but the high concentration within US brewing probably eases the implementation of self-regulation. Here (8-page pdf) is the Beer Institute's Advertising and Marketing Code. I am troubled by one element of the code, that "Beer advertising and marketing materials should not disparage competing beers." Could there be an antitrust problem there?

The Big-3 US brewers, plus many others, are members of the Beer Institute; I don't believe that Pabst, the fourth largest brewer, is a member, however.

Labels: alcohol, Europe, marketing

 
Two Items Almost Related to US Temperance History
- posted by Jim Leitzel @ 9:31 AM

Alcohol and Drugs History Society provides pointers to two stories about drinking in America. The first is the news that George Washington's still has been reconstructed on its original site, and has begun producing whiskey. Visitors can purchase a taste, too, though one shouldn't expect anything, well, palatable, from the unaged fire water. The reconstruction of the Washington distillery was financed by the Distilled Spirits Council. This industry group has developed a Code of Responsible Practices for Beverage Alcohol Advertising and Marketing, which includes (among other things) rules for not targeting or appealing to the underage in alcohol ads, and not marketing drinks through associations with sexual prowess. Their semi-annual report featuring ads challenged under the rules and the responses to the challenges makes for fairly fascinating reading. Here (32-page pdf) is the most recent (July-December 2006) report.

Oh yeah, the temperance connection: The temperance society that shot through the US like a comet in the 1840s (with a template paralleled by Alcoholics Anonymous 90 years later) was named after the distillery-owning George Washington.

The other story concerns ice cream sundaes. Why are they called sundaes? The term apparently derives from Sundays. But what is an ice cream Sunday? It's an ice cream soda of the type that you consume on a Sunday. Why don't you consume standard ice cream sodas on Sundays? Because soda water is sometimes used as a mixer with alcohol, so its sale on Sundays had to be proscribed, of course. (Here is the book from which this information is drawn, according to the linked article.)

Labels: AA, alcohol, marketing, temperance

 
The Posadas Case: The Way Ahead for Vice Advertising?
- posted by Jim Leitzel @ 11:40 PM

Vice Squad has long been concerned (see, for instance, the August 26, 2004 post on Rubin v. Coors (1995)) that interpretations of the First Amendment that preclude stringent regulation of commercial advertising for legal goods will mean less freedom, not more, as the government will choose to keep vice goods (such as marijuana or heroin, for instance) illegal rather than adopt a legalization scheme that must tolerate unfettered advertising. There is one Supreme Court decision, however, that I think points a way forward for legalized vice. The decision was rendered in Posadas de Puerto Rico Associates v. Tourism Company, 478 U.S. 328 (1986). The Posadas case concerns limitations on casino advertising in Puerto Rico.

When the legislature of Puerto Rico legalized casino gambling in the late 1940s, it simultaneously prohibited advertising by the casinos directed towards residents of Puerto Rico. Advertising aimed at foreign tourists, however, was permitted. By a 5-4 majority, the US Supreme Court, employing the Central Hudson test, upheld the legitimacy of the advertising restrictions. (The advertising restrictions that were upheld were not the full set adopted by the Puerto Rican legislature, but a narrower version that had been constructed by Puerto Rican courts.) The majority opinion also argued that “the greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling.” This commonsense notion has attracted a good deal of critical commentary (including some from later opinions by Supreme Court justices), and indeed, appears to fly in the face of the Central Hudson approach to regulating commercial speech.

In many circumstances, the existence of a “greater” power need not imply the existence of a “lesser” power. For instance, capital punishment for convicted murderers is constitutional in the United States, while the (arguably) lesser power of extreme torture is not constitutional. (That is, torture would be inconsistent with the Eighth Amendment’s protection against cruel and unusual punishments.) But in terms of vice regulation, the power (if it exists) to ban one of the traditional vices probably should include the lesser power of legalizing the vice while controlling the advertising of the vice, as the Posadas case suggests for casino gambling. A legal-sales-but- controlled-advertising regime essentially consists of an offer from the government to license sellers, conditional on their willingness to refrain from specified types of advertising. The threat not to license the vices in the absence of ad controls is quite credible, in that the traditional vices legally can be banned today, and often have been banned in the past. (And of course, many vice- related activities currently are prohibited in the US.) Such conditional offers, therefore, have a strong claim for promoting both individual liberty and speech, relative to the alternative that would arise if such licenses were not available. A conditional license to sell ketchup only in the absence of advertising cannot similarly be argued to be speech-and-liberty enhancing – a threatened ban on ketchup is neither credible nor traditional. Therefore, a Posadas-like acceptance of the constitutionality of conditional vice licenses need not imply that the government can more generally confer benefits only if speech rights are waived. (On this point in particular, though also for this post more generally, I am indebted to Mitchell N. Berman, “Commercial Speech and the Unconstitutional Conditions Doctrine: A Second Look at ‘The Greater Includes the Lesser.’” Vanderbilt Law Review 55(3): 693-796, April 2002; the working paper version can be found here.) The traditional vices have proven their exceptionalism from most other types of consumer goods and services over centuries, and it is appropriate that the legal regime recognize that exceptional history.

Labels: casino, marketing, Supreme Court

 
Cheaper by the Twelve-Pack? Not in Finland
- posted by Jim Leitzel @ 6:57 PM

The Finnish Parliament has adopted some new controls on alcohol labelling and marketing, including a measure prohibiting volume discounts. It cannot be cheaper, on a per-beer basis, to buy a 12-pack than to buy a single beer, and Finnish restaurants cannot sell bottles of wine more cheaply than the equivalent per-glass price. It is possible that this new law will serve to reduce the price of a glass of wine in restaurants, of course.

Labels: alcohol, Europe, Finland, marketing

 
Beer Label Censorship
- posted by Jim Leitzel @ 4:54 PM

Today's New York Times brings word that the state of Maine is hoping to keep its alcohol shelves safe from naughty pictures -- such as Eugene Delacroix's "Liberty Leading the People". The state Bureau of Liquor Enforcement decided against the offending beer labels in September; now, their ruling is being challenged by the Maine Civil Liberties Union on free speech grounds.

Vice Squad has long been concerned with the application of standard commercial free speech rules to the vice arena. The rationale for such rules is to empower consumers by ensuring that they have access to information, and to protect the speech rights of sellers, too. But these laudable ends are less obviously served by extending the usual speech protections to vice good labeling and advertising. First, in the case of the traditional vices, we have somewhat less reason than we usually have to assume that the informed choices of consumers serve their own best interests, as they themselves would define them. Second, and more importantly, the government (for better or worse) has the power to ban vice goods, and many such goods are banned. There is no free speech protection in the US for advertising illegal goods. Unfettered advertising for a vice good might lead to less speech and less freedom, not more, as governments ban such goods rather than tolerate the advertising. This is easier to see in the case of those currently illegal goods rather than in the case of alcohol. A state or nation might be interested in legalizing cannabis. If legalization entails full commericalization and advertising, however, governments are less likely to legalize in the first place.

As with free speech, commitments to free trade and free competition (antitrust) similarly do not serve their usual purposes (at least to the same extent) when these commitments are applied to the traditonal vices. Vice should form an exception to these commitments -- and it will. The choice in practice often is whether the exception will be in the form of legal vice but controls on advertising (or trade, or competition), or in the form of a vice prohibition.

Nevertheless, there is a good chance that the Maine Bureau of Liquor Enforcement will have to back away from its label objections -- and really, the objection to Delacroix is a bit over-the-top (topless?), anyway. Bad Frog Beer has paved the way.

Labels: alcohol, marketing

 
Marketing Caffeine to Young Athletes
- posted by Jim Leitzel @ 1:39 PM

Sunday's New York Times included this article about AdvoCare International's product Spark, an energy drink aimed at kids. According to the article, Spark "contains several stimulants and is sold in two formulations: one for children 4 to 11 years old that includes roughly the amount of caffeine found in a cup and a half of coffee, and one containing twice that amount for teenagers and adults." The marketing seems to hope to appeal to young athletes, in particular, though the Times story indicates that AdvoCare International executives claim that Spark is directed towards healthy living, not just sports. The Times article also notes many voices of concern at the marketing of high-caffeine products towards kids. If the popularity of products such as Spark increases, I expect that litigation or legislation eventually will impose limits on marketing, if not on caffeine content directly. Will schools suspend students who bring substances such as Spark to class?

Labels: caffeine, marketing, teens

 
NASCAR Vice
- posted by Jim Leitzel @ 8:42 PM

Outrunning revenooers was one impetus for what has developed into stock car racing. NASCAR has had tobacco company and beer brewer sponsorship in the past, and recently took on sponsors from the hard liquor industry. Further, according to an article in today's New York Times, NASCAR also has a tie-in to the gambling world. Some scratch-off tickets for the South Carolina Education Lottery include pictures of drivers, their racecars, and the NASCAR logo; see for yourself -- and for $3, you, too, can have a one-in-750,000 chance of winning $50,000 (plus the possibility of smaller prizes). Or perhaps, if $3 is a bit steep, you should consider Shrimp & Grits 2, where your $1 ticket could yield a $2000 payoff! The National Football League isn't participating in a lottery ticket tie-in, but other sports associations are not so reserved:

But Nascar is hardly alone in its pursuit of gambling income. The company that licenses sports leagues and athletes for use on lottery tickets, MDI Entertainment L.L.C., has also signed the N.B.A., the N.H.L. and the golfers Vijay Singh and Annika Sorenstam to use on lottery tickets. The leagues or the athletes receive a cut of the income from the tickets as well as merchandising money from league or team products that are awarded as part of the game.

Labels: alcohol, lottery, marketing

 
Football and Alcohol
- posted by Jim Leitzel @ 6:29 PM

European-style football, that is. Turns out that some ancient version of kickball is quite popular in other parts of the world, including Scotland, where two of the perennial powerhouses are Glasgow-based Celtic and Rangers. (Together, these teams are known as the "Old Firm.") Many European kickball teams have corporate sponsorships, and the corporations are prominently featured on the teams' uniforms. Further, many kids (and even some adults) enjoy wearing replica jerseys from their favorite teams. Celtic and Rangers are sponsored by Carling, a beer brand owned by Coors. OK, if you are still with me on this, the problem is that not all parents are keen on having their youngsters run around with Carling adverts festooned on their replica kit. Especially Muslim parents. Now the Old Firm has responded, by offering a limited supply of replica jerseys sans beer company advertising.

Labels: alcohol, Britain, marketing

 
Private Vice Controls: Happy Hour Restrictions in Britain
- posted by Jim Leitzel @ 7:53 PM

Vice purveyors often choose to institute voluntary regulations that go beyond their legal requirements. (Of course, these moves may not be entirely uncoerced; rather, their adoption might be intended to head off future legislation or litigation.) Last week, the British Beer and Pub Association adopted guidelines that limit most Happy Hour-style promotions. So, in more than half of British pubs, two-for-one offers, for instance, are no more.

Coincidentally, the move came just before a parliamentary debate on anti-social behavior. (Remember those ASBOs?) Somehow, the Association remembered to send a notice of its new policy to all the Members of Parliament.

In Scotland, the Association's move will likely be supplemented (and largely superseded) by a proposed parliamentary measure that will try to undermine Happy Hours by making them last for two days.

Vice Squad noted the Scottish plan in February, and most recently talked of voluntary vice regulation with respect to US liquor advertising.

Labels: alcohol, Britain, marketing

 
Jon Nelson on Advertising and Vice
- posted by Jim Leitzel @ 4:24 PM

Professor Nelson has been busy in recent years preparing tons on articles on the regulation of alcohol and tobacco advertising. He provides links here; look especially at the bottom of the page. Here's his recent encyclopedia article on advertising bans.

Postscipt: Professor Nelson has made an earlier appearance on Vice Squad.

Labels: marketing, tobacco

 
The EU Pressure on Swedish Alcohol Controls
- posted by Jim Leitzel @ 6:42 PM

One of Vice Squad's favorite topics is how the EU's commitment to free trade is making it hard for EU member nations to maintain strict alcohol policies. The possibility of purchasing massive quantities of cheap alcohol abroad and importing it to some degree undermines a high-tax regime, for instance -- as Sweden is learning. The linked article also points out that EU trade policy has liberalized Sweden's alcohol advertising regulations:

Also last year, the EU ordered Sweden to lift its ban on alcohol advertising, which was deemed an unfair barrier to market entry. Before the ban was lifted, even Absolut Vodka, which is made in Sweden, was barred from placing its catchy ads in Swedish magazines.

Vice Squad likes to claim that allowing free trade, free speech, or antitrust policy to trump vice policy sows the seeds for undermining trade, speech, and antitrust, while simultaneously engendering less-than-optimal vice policies.

Labels: alcohol, EU, free trade, marketing, Sweden, tax

 
One Year of India's Public Smoking Ban
- posted by Jim Leitzel @ 6:09 PM

Yes folks, it was only one year ago when India's 150 million smokers were expected to douse their embers in public. The legislation also included some marketing controls and a ban on sales to minors. Implementation troubles quickly surfaced. After one year, it looks as if compliance with the billboard advertising controls exceeds compliance with the public smoking, sales-to-minors, and point-of-sale ads regulations.

Labels: marketing, smoking ban

 
Sex Worker Film and Arts Festival
- posted by Michael @ 8:53 PM

Darn, I have just missed it. It turns out that the San Francisco's 4th Sex Worker Film and Arts Festival ended today. I learned about it this morning from our local newspaper, The Herald Times (subscription required) that talked about a "college of sorts," as they called it. The actual name is Whore College. It's a day of classes on sex worker techniques, self defence, marketings, etc. Sounds like useful stuff. Perhaps more useful than what I have just finished teaching this semester.

Labels: dancing, marketing, prostitution

 
Only Scylla Left to Negotiate
- posted by Jim Leitzel @ 6:19 PM

A would-be responsible alcohol retailer can face a dilemma. If its rivals compete on the basis of price, our responsible seller might have to, too, by running happy hours or other price promotions. Such marketing might incur the wrath of those concerned with binge drinking. But if our responsible seller attempts to join with its rivals in preventing price discounting, then it may violate the antitrust laws. Such a violation was alleged against alcohol sellers in Madison, Wisconsin, last March.

Today we learn from Walter Olson at Overlawyered that a judge threw out the private lawsuit, on the grounds that the collusion was foisted upon Madison's bar owners. So in this case, vice policy trumps anti-trust. Along with the WTO internet gambling ruling, in which vice policy trumped free trade, perhaps we are seeing a trend towards increased autonomy for vice policy. If so, California medical marijuana patients will have reason to celebrate, even as California winemakers should become increasingly concerned.

Labels: alcohol, free trade, litigation, marketing

 
Tennessee's Alcohol Ad Restrictions
- posted by Jim Leitzel @ 3:57 PM

The office of the Tennessee Attorney General has issued an opinion that many of the state's controls on alcohol advertising violate the US Constitution. Among the questionable rules are bans on distilled spirits advertising on television and radio.

As a matter of Constitutional law, the AG is probably correct; the opinion is here (5 page pdf). It relies on various recent US Supreme Court decisions, including the 1995 case of Rubin v. Coors. This string of cases seems to suggest that the advertising of legal vice products will receive about the same amount of Constitutional protection as any commercial speech. As the loyal Vice Squad reader knows, I view the lack of control over advertising as dangerous for the continued tolerance of legal vice -- states can always outlaw the advertising if they first prohibit alcohol.

Labels: alcohol, marketing, Supreme Court

 
More on Indian Obscenity Policing
- posted by Jim Leitzel @ 1:51 PM

The closing of dance bars in the state of Maharashtra apparently has not yet included such bars in Mumbai (Bombay), which is located in Maharashtra. But one suspects that the tolerance will not last long, as there's a new cop in town. Since January, Sanjay Aparanti, a medical doctor, has been Deputy Commissioner of Police (Enforcement) in Mumbai, and he is on a crusade: 'I have decided Mumbai must be rid of obscenity in all walks of life.' Oh dear. So far it looks as if the good doctor has taken particular aim at outdoor advertising and television broadcasting that does not meet his less-than-precise standards. What is this 'obscenity in all walks of life' that must be stamped out? 'Advertisements that show female models with scanty clothes; film promos full of vulgarity; music albums and remix videos full of vulgarity; film posters full of obscenity; some newspapers regularly carry porn material and I have served them notices too.'

Labels: dancing, India, marketing, obscenity, policing, pornography