What Are The History, Laws, Profitability, And Responsibilities To The Consumer

Term Paper Title	What Are The History, Laws, Profitability, And Responsibilities To The Consumer
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What Are The History, Laws, Profitability, and Responsibilities To The Consumer
Of Advertising Hard Liquor on TV In The United States?

INTRODUCTION

Purpose

The goal of this report is to inform the reader of the recent events that
prompted hard liquor advertising on TV.  In addition, the laws associated with
advertising across this media, as well as recent legislative endeavors to
control such advertising.  Furthermore, the report also focuses on the potential
profitability the distilled spirit's industry will gain from advertising across
this media and the industries social responsibilities to the consumer.

Sources and Methods

Research for this report is gathered mainly from information found on the World
Wide Web.   Some information was gained through newspaper articles obtained by
using the InfoTrac system in the Ruth Scarborough Library on the Shepherd
College Campus.  Refer to the bibliography for specific information references.

History

Research by the Distilled Spirits Council of the United States (DISCUS) found
that 30 to 50 percent of Americans think that distilled spirits are being
advertised on TV.  Since Prohibition the hard liquor industry voluntarily agreed
not to advertise their products, first on radio in 1936, and of TV in 1948.
However, the industry is being faced with declining sales.  Their competitors
such as the beer and wine industries have grown.  The sales of beer and wine
have increased dramatically, leaving the hard liquor industry behind.  The main
reason for this occurrence is due to the fact that these industries have tapped
into the resource of advertising on TV.

Consequently, this has prompted the hard liquor industry to reevaluate its
current marketing situation.  The first company to take the leap to TV is
Seagram.  The Seagram company began advertising 30-second Crown Royal whiskey
commercials in Corpus Christi, Texas.

Definitions

The words "distilled spirit" is used throughout this report.  Distilled spirits
and hard liquor in this report have the same meaning.  Distill means to let fall,
exude, or precipitate in drops or in a wet mist according to Webster's
Dictionary.  Hard liquor is the end result of  this process using the
appropriate ingredients.  Distilled spirit is any alcoholic beverage not defined
as beer or wine.

Laws

Constitutional

The right to advertise is constitutionally protected commercial free speech
under the First Amendment.  This fact is being upheld in a recent commercial
free speech decision by the Supreme Court.  The case of 44 Liquormart, Inc. vs.
Rhode Island upholds the industry's commercial free speech rights by insuring
that beverage alcohol is allowed the same protection under the First Amendment
as other legal products and services.

In addition, the Courts also ruled that truthful and non-misleading advertising
is an essential part of the free enterprise system.  Withholding this form of
advertising deprives the consumers of knowledge that is needed to make conscious
and informed decisions.

Federal Regulations

Advertising hard liquor on TV is a constitutionally protected right, however,
the industry must follow strict Federal regulations.  An advertisement of
distilled spirits can not contain any false or misleading statement that tends
to create a misleading impression of the product to the consumer.  Furthermore,
a statement in an advertisement cannot say anything bad about a competitor's
product. Provisions are made also for  a statement's design that cannot contain
any material that is obscene or indecent.

Federal regulations do not permit claims of distilled spirits having curative or
therapeutic qualities.  This practice was very popular in the 1800's and early
1900's.  Traveling salespersons would often stage a show in the middle of small
towns claiming a miracle cure for various sicknesses.  Most often, the cure
would involve alcohol consumption causing the consumer to become intoxicated.
This advertising was false and misleading.

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