'Ban' Lifted on Network Advertising of Spirits

In an important milestone for the spirits industry, NBC has agreed to air advertising of Smirnoff Vodka by Diageo PLC (Diageo). The first ad was aired during the December 15, 2001, episode of Saturday Night Live.

Several stations, most notably in Utah, have vowed not to air the ads. Spokespersons from Mothers Against Drunk Driving have expressed concern, and the American Medical Association continues to oppose all broadcast advertising of spirits. More significantly, members of the House of Representatives threatened to impose a ban on such advertising if NBC did not reverse its position.

History of Advertisement of Alcohol Beverages

Though many outside of the alcohol industry might be puzzled that NBC's decision has proven controversial, industry members are well aware of the history which informs any debate about spirits advertising through broadcast media.

For various reasons, commercial speech rights have been exercised by different segments of the industry in different ways. For example, the beer segment of the industry has pursued an aggressive advertising campaign that historically has included both radio and television. Most recently, large and small brewers alike have established web sites that reach out to consumers with product information and branded non-alcohol items.

The spirits segment of the alcohol industry historically has exercised significant restraint in the marketing and advertising of its products through electronic media. A voluntary ban on radio and television advertisements of distilled spirits effectively kept those products off America's airwaves for almost 60 years. For the most part, the voluntary ban encompassed wine as well.

In late 1998, Joseph E. Seagram & Sons departed from industry policy and ran a series of advertisements for one of its spirits brands on local television stations in Texas and the northeastern United States. This change in policy generated public concern, including calls from senior levels of the federal government to impose a mandatory prohibition on all electronic advertisement of alcohol products generally.

Since the initial furor over Seagram's televised advertisements, this situation has stabilized to some degree. Today, heavy television and radio advertising for the beer segment continues. Moderate amounts of electronic advertising for the wine segment of the industry appear to be developing in certain markets throughout the United States, though in significantly smaller levels relative to beer. Distilled spirits advertising has remained generally confined to print media.

Advertising of spirits and wine brands on the Internet, however, has increased in recent years. With the advent of the Internet and the ability to reach end-use consumers directly, new questions are arising about both a state regulator's ability to prohibit or restrict electronic...