Alcohol Summary Essay
In 2001 spirit makers ended a long standing volunteer policy against aggressive alcohol advertising (Steiner and Steiner, 2009). Since that time, there has been an unprecedented shift toward increased alcoholic advertisements in an effort to increase market share and raise profits. This shift brings into light the challenge alcoholic companies face in balancing their fiduciary duties to their shareholders and their corporate and social responsibility to society. This report focuses on the issues surrounding Anheuser Busch’s Spykes beverage and the corporate and social issues similarly faced by other alcoholic beverage companies.
Introduction There is growing public pressure for alcoholic beverage companies to meet their social and ethical duties to balance efforts to increase profits to their shareholders whilst protecting society from the harmful effects of excessive alcohol consumption. Anheuser Busch (AB) is one of the largest alcoholic beverage companies in the world. In 2005 AB manufactured an alcoholic beverage called Spykes It is a spirit based beverage that was intended to target their 21-30 year old legal age drinkers.
Following a successful soft launch, AB was hopeful that Spykes would help increase market share and profits. Unfortunately, growing public pressure forced AB to stop selling Spykes (Steiner and Steiner, 2009). This report looks at specific issues surrounding Spykes and its potential harm to society, considers AB’s ethical duties to society, discusses the affect of alcoholic advertising in society and addresses potential reforms to help ensure alcoholic beverage companies fulfil their ethical duties to protect society of undue harm. Is Spykes Bad?
Spykes could be considered bad in the sense that it was likely targeted at underage drinkers. It is well accepted that alcoholic beverages are no ordinary commodity (Babor et al, 2003) and Spykes could be classified as part of the Alcopops group of beverages which are primarily consumed by underage or young drinkers. These Alcopops negatively affect the health and well being of young people (Robinson and Kenyon, 2009). Accordingly, Spykes may be considered bad for the health and well being of underage drinkers and society in general.
The World Health Organisation believes that alcohol consumption is one of the leading causes of death among young people (World Health Organisation, 2002). AB elected to stop selling Spykes in response to negative public pressure. This negative pressure primarily came from Center for Science in the Public Interest who believed Spykes was being marketed and consumed by underage drinkers. This belief was formed on the basis that AB used strategic marketing incorporating the latest technology to produce interactive arenas with impressive graphics, eye catching animation and a fancy website (Riley, 2005).
This online content is generally appealing to a young audience. As Riley (2005) stated that young people are the biggest users of the internet and of advanced mobile phone technology. The alcohol industry has been quick to grasp the resulting marketing opportunities. Accordingly, stopping the sale of Spykes was the right thing to do in the context of reducing harm to underage drinkers as well as right thing to do in the context of protecting AB’s brand and public relations efforts as a socially responsible corporation. Anheuser Busch’s Ethical Duties.
Ethics refers to the concept of judgment; what is right and wrong, moral and immoral in society. It is ethically accepted that organisations run to make a profit (Steiner and Steiner 2009). Alcoholic beverage companies would argue that advertising is a promotional activity used to enhance their profit, not to attract under age drinkers to consume alcohol. Anderson (2009) argued that alcohol advertising influences young people to consume more alcohol, especially teenagers due to the sexually arousing images in the advertisements.
Jones (2005) acknowledged that alcoholic beverage companies who don’t provide correct information or hide information in their advertisements are acting unethically. From society’s perspective, any activities conducted by the alcohol beverage companies to remove alcohol related problems like violence, decreased morality and intoxication related problems like drinking driving are seldom advertised and marketed. In this sense, society is only seeing advertisements related to increased consumption leading to increased profits.
Accordingly alcohol industries fail to fulfill their ethical duty to be informative and truthful in their advertising efforts. At present, alcohol beverage companies create a brand image by sponsoring sports and cultural activities that attract drinkers, first starting as a social drinker and then becoming regular drinkers (Munro & De Wever, 2008). The current alcohol advertising regulatory system in Australia should aim to minimize exposure and appeal to children (VAADA, 2010).
In Australia, advertising activities are regulated by legislation and a code of practice such as the Advertiser Code of Ethics and Alcoholic Beverages Advertising Code (ABAC). This code is based on a voluntary system of self-regulation which is funded and administered by the alcohol beverage companies. Currently there are no penalties for non-compliance (Jones, Hall & Munro 2008). Additionally, the organisation is partly funded by alcoholic beverage companies. This presents a conflict of interest as in most instances, their fiduciary duties are act in the best interests of their shareholders and not necessarily society at large.
In order to offset this conflict of interest, it is necessary for an Australian Federal regulatory body to be established to independently control alcohol advertising in society in the hopes of minimising the attraction of alcohol to underage drinkers. Misleading Advertisements Studies have proved that there is a strong relationship between alcohol advertising and consumption rates among under age drinkers (Snyder, Milici, Slater, Sun and Strizhakova, 2006; Collins, Ellickson, McCaffrey and Hambarsoomians, 2007).
In addition, evidence suggests that alcohol ads influence youth perceptions of drinking. Some advertisements contain misleading messages that drinking alcohol will make consumers more sociable and outgoing; help them have a great time; help them feel more confident and less nervous; succeed with the opposite sex or it would make them feel more attractive (Jones and Gregory, 2007). These messages are highly attractive to today’s youth. Some ads portray drinking as distinctive and prestigious. These ads suggest that by drinking their product you will enjoy the finer things in life.
As an example some beer ads depict attractive people on yachts, in luxury restaurants or luxury establishments (Fig 1, 2 and 3). Other ads propagate that drinking increases your status and differentiates you from others (Fig 4). Whilst other ads imply that sports and alcohol go together (Fig 5, 6). These ads are commonly aired during sporting events and through alcoholic beverage company sponsorship of such events. Wealth, happiness and sex tied to drinking are also common themes portrayed in ads (Fig 7 and 8).
In some measure, each of these images appeal to under age drinkers and the investment in advertisements is on the rise. Table 1 shows the substantial investment by alcoholic companies in magazines alone. According to The Center on Alcohol, alcohol companies spent $2billion on alcoholic advertisement in magazines alone between 2001 and 2006 (The center on alcohol marketing and youth, 2008). In Australia during 2008, alcoholic beverage companies spent in $109million on advertisements (Nielsen Australia, 2008). Many of these messages are appealing to under age drinkers.
Accordingly, alcohol companies should attempt to market their products in such a way that ensures their ads do not convey misleading messages. One way is to focus the ad on the product rather than the misleading images of wealth, sex and status. In addition, local governments should also promote responsible drinking and spread awareness in society adopting similar advertisements strategies. Regulating Alcohol Advertising The need for further regulation depends upon weather it can be proven that advertising alcohol increases consumption. In 2006 Teinowitz (2006) undertook a study of randomly sampled 15-26 year olds.
The study found they drank more after seeing alcohol ads, and that each additional ad viewed increased the number of drinks consumed by 1%. The study also established that in markets with more alcohol ads, spending on alcohol was up over markets with fewer ads (Teinowitz, 2006). Accordingly, there is further need for regulation of alcoholic advertising. Further regulation could be in the form of the creation of a regulator body that enforced restrictions against alcoholic beverage companies adopting marketing strategies that primarily appeal to young persons.
In AB’s case, they admittedly targeted young people with a brightly colored web site allowing visitors to download music mixes, ring tones, screen savers, and instant messaging icons (Steiner & Steiner, 2009). These activities catered around youth culture. Regulators could determine that such marketing strategies, directed at young persons, could constitute advertisements that appeal to under age drinkers and therefore ban such ads. This ban could extend to bans on advertisements in public places and bans against alcoholic companies sponsoring public or sporting events.
In order to determine if the suggested restrictions above meet The Central Hudson guidelines, a four part test may be applied as follows (Steiner and Steiner, 2009):- (a) the ad in question should promote a lawful product: (b) the government interest in restricting the particular commercial speech must be substantial; (c) the restriction must directly further the interest of the government; and (d) the restriction should not be more extensive than is necessary to achieve the government’s purpose.
As outlined above, young people are influenced by alcohol advertising (Teinowitz, 2006). This interest is therefore substantial and the suggested bans will further protect the interest of the government. Although the suggested restriction may seem excessive, industries need to appreciate that a “business firm is more likely to gain public approval and social legitimacy if it adheres to basic ethical principles and society’s laws” (Post, Lawrence and Weber, 2002). Accordingly, the suggested restriction would meet the purposes of the Central Hudson guidelines.
Conclusion Anheuser Busch is a good example of an alcohol beverage company that struggled to find a balance between increasing market share and profit whilst fulfilling its ethical duty to be a socially responsible corporation. As a result of this case, the information and ideas presented in this report suggests there is much needed reform and the establishment of a regulatory body to deal with alcohol advertisements. This need is driven by the significant interest in protecting young people from harm.
Alcohol beverage companies and government should work together and do all they can to reduce harm to young people by restricting marketing and advertisements that appeal to young people. * Appendix A * Table 1 * Appendix B * Figures Fig 1: Skyy Blue, Entertainment Weekly, Apr 11, 2003| Fig 2 :
Glenfiddich Scotch Whisky, Sports Illustrated, Nov 15, 2004, Nov 29, 2004, Feb 14, 2005| Fig3 : Captain Morgan Parrot Bay, Stuff, Aug 2002| Fig 4 : http://www. encyclopedia. com/doc/1P2-18802608. html, www. whiskyfun. com/archivemay05-2.
html| Fig 5: www. funkydragon. org/en/fe/page. asp? n1=950&n2=2207| Fig 6: http://www. swimmingworldmagazine. com/media/Michelob_Ad4. JPG| Fig 7 : Molson Canadian, FHM, Aug 2005| Fig 8 : http://katiehann. wordpress. com/2008/11/06/advertising-alcohol/| References Babor, T, Caetano, B, Casswell, S, Edwards, G, Giesbrecht, P, Graham, K, Grube, J, Grveneward, P, Hill, L, Holder, G, Homel, R, Osterberg, E, Rehm, J, Room, R and Rossow, I (eds), 2003, Alcohol: No Ordinary Commodit, Research and Public Policy, Oxford University Press, Oxford.
Brian, J. (2000) Youth, Alcohol, and the Emergence of the Post-modern Alcohol Order, Occasional Paper No. 1 New Series, Institute of Alcohol Studies, London. Riley, L. (2005) ‘Drinking It In: Finding of the Valencia Meeting on Marketing and Promotion of Alcohol to Young People’ in G Marcus & J O’Connor (eds), Corporate Social responsibility and Alcohol: The Need and Potential for Partnership, Guilford Press, Hoboken. Robertson, S and Kenyon, A, 2009, Ethics in the Alcohol Industry, Palgrave Macmillan, New York.
World Health Organisation (WHO), (2002) The World Health Report 2002: Reducing risk, promoting healthy life, Geneva. Anderson, P. (2009) ‘Is it time to ban alcohol advertising? ’, Clinical Medicine, 9, 2 April 2009: 121-124 Jones, S. C. , Hall, D. & Munro, G. (2008) ‘How effective is the revised regulatory code for alcohol advertising in Australia? ’, Drug and Alcohol Review, 27: 29-38 Munro, G. and De Wever, J. (2008) ‘Culture clash: alcohol marketing and public health aspirations’, Drug and Alcohol Review, 27(2): 204-211 Steiner, J. F, Steiner, G. A.
(2009) ‘Business, Government, and Society’ McGraw-Hill Irwin, 12ED Sandra C. Jones (2005) ‘Beer, Boats and Breasts: Responses to a controversial alcohol advertising campaign’ ANZMAC Conference, University of Western Australia, P 77-81 Victorian Alcohol and Drug Association, 2010, Position Paper: Alcohol advertising, marketing and promotion, viewed 16 June 2010, http://www. vaada. org. au/resources/items/314236-upload-00001.pdf.
Post. J. E. , Lawrence. A. T. and Weber. J. , (2002) Business & Society: Corporate Strategy, Public Policy, Ethics, Tenth Edition, Irwin McGraw-Hill, Boston. Teinowitz. I. (2006) Do booze ads drive youth to drink? Advertising Age (Midwest Region Edition) Chicago. Vol 77, Iss 35, p8. – viewed 24/06/10 http://0-proquest. umi. com. library. newcastle. edu. au/pqdweb? index=28&did=1118136211&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1277385716&clientId=29744.
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