D-day for alcohol industry

by Peter O'Donahoo and Tami Dower

In June 2002, the Victorian Health Minister initiated an inquiry into the effectiveness of the alcohol industry's self-regulation of alcohol advertising. The National Committee for the Review of Alcohol Advertising (NCRAA) was set up to undertake the review and released its report in August 2003. On the whole, it found that the current self-regulatory system was working quite well. However, it noted that there was still significant room for improvement in some areas, particularly in relation to advertisements appealing to the youth market. The NCRAA produced a list of 25 recommendations and gave the alcohol industry until 31 March 2004 to comply, or face government regulation.

The current regulatory landscape

The regulatory system for alcohol advertising consists of two arms. The first is the Advertising Standards Bureau (ASB), which administers a general Code of Ethics applying to all forms of advertising. The second arm deals specifically with alcohol-related advertising, incorporating a Complaints Adjudication Panel, which is responsible for administering the Alcohol Beverages Advertising Code (ABAC), and a pre-vetting system. All complaints are initially received by the ASB. Those that do not fall within the general advertising Code of Ethics – which covers matters of taste and decency – are referred to the ABAC Adjudication Panel. At present, the vast majority of alcohol-related complaints (95%) are dealt with by the ASB under the general Code. Interestingly, of the 361 alcohol-related complaints dealt with by the ASB between 1998 and 2002, none were upheld. In contrast, of the 20 complaints determined by the ABAC Adjudication Panel over the same period, five (27.7%) were upheld and 13 were dismissed. The complaints that have been upheld by the Panel have related mainly to advertisements appealing to the youth market and the consumption of alcohol contributing to sexual success.

To some extent, the low number of alcohol advertising complaints dealt with by the ABAC Adjudication Panel can be attributed to the industry's pre-vetting system, launched in 1992. Between 1999 and 2001, a large number of advertisements went through this system, with approximately 10 per cent being rejected. The reasons for rejection related mainly to associations between alcohol and hazardous activities, associations with social/sexual/sporting success, and the display of excessive alcohol consumption.

The Alcohol Beverages Advertising Code

The ABAC came into operation in 1998. Broadly, the Code provides that advertisements for alcohol beverages:
  • must present a mature, balanced and responsible approach to the consumption of alcoholic beverages;

  • must not have strong or evident appeal to children or adolescents;

  • must not suggest that the consumption or presence of alcoholic beverages may create or contribute to a significant change in mood or environment; and

  • must not depict any direct association between the consumption of alcoholic beverages and potentially hazardous activity.

The current ABAC does not cover Internet advertising, product names, packaging, sponsorships, promotions or point of sale materials. Around 95 per cent of the alcohol industry is presently captured by the ABAC (although sign-up is voluntary).

Why do we need to regulate alcohol advertising?

Some industry players argue that alcohol beverage manufacturers should be free to market their products as they see fit. Proponents of this view contend that the answer lies in controlling access to the product, rather than its perceived attractiveness. Certainly, controlling access to alcoholic beverages is part of the answer. But many assert that it cannot provide the whole answer. The concern is that a regulatory system that gives free reign to alcohol advertisers fails to take account of an increasing body of research that highlights the apparent social power of alcohol advertising in promoting alcohol misuse, especially among young people. The social cost of alcohol to the Australian community has been estimated at $7.560 billion a year. Current research also demonstrates that young people are consuming alcohol earlier in adolescence and are increasingly adopting high-risk drinking patterns. Statistics released by the Australian Institute of Health and Welfare reveal that, between 1998 and 2001, 400 young Australians between the ages of 10 and 19 were admitted to hospital with alcohol poisoning, a quarter of them aged between 10 and 14. These are statistics that the alcohol industry, and indeed society as a whole, can ill-afford to ignore.

What constitutes 'irresponsible' advertising?

The ABAC states that the conformity of an advertisement with the Code is to be assessed 'in terms of its probable impact upon a reasonable person within the class of persons to whom the advertisement is directed and other persons to whom the advertisement may be communicated'. Despite the remarkable popularity of this 'reasonable person' within the language of law, the attitudes and sensitivities of this omnipotent creature can be tricky to precisely ascertain. For example, the federal government's 2001 National Alcohol Strategy Report went so far as to claim that 'advertisements using animation, humour or rock music' are of concern as they are 'particularly attractive to young people'. Not surprisingly then, some alcohol marketers are a little confused about where they stand.

One area that has inspired some particularly spirited debated is the marketing of drinks that are said to make alcohol more palatable to young tastebuds, such as alcoholic-flavoured milk and 'alcopops' – the new breed of sweet, fizzy, pre-mixed spirits. Alcopops hit the market in the mid-90s and quickly became the fastest growing drink segment. Marketers who advertise these kinds of products around places where young people congregate leave themselves open to criticism. In response to these concerns, the alcohol industry recently agreed to set protocols on the promotion of alcoholic beverages targeted at young people.

Alcohol industry takes proactive approach with Retailer Alert plan
Another recent initiative of the alcohol industry is a proposal to introduce a 'Retailer Alert System', whereby retailers would receive written alerts about breaches of the ABAC by manufacturers. Upon receipt of an alert, retailers would be encouraged to remove offending products from sale until breaches of the Code are rectified. The aim of the system would be to discourage what is considered to be irresponsible advertising by the small minority, which has given rise to criticism of the self-regulatory system.

Other issues raised by the NCRAA report
The NCRAA report also raised a number of other issues, including concern that:
  • the vast majority of complaints relating to alcohol advertisements are dealt with by the ASB (which does not have any specialist knowledge or skills in relation to public health issues), rather than the ABAC Adjudication Panel;

  • the ABAC currently does not apply to advertising on the Internet;
    the general public is largely unaware of the complaint resolution system and, in particular, how to make complaints;

  • the system lacks transparency;

  • the effectiveness of the current system is compromised by the amount of time taken to resolve complaints; and

  • a number of smaller alcoholic beverage manufacturers are not signatories to the ABAC.

The alcohol industry has agreed, in principle, to address all of these concerns.


It is in the alcohol industry's best interests to make every endeavour to comply with the NCRAA's recommendations. In general, most sectors of the industry have shown a willingness to do so. The NCRAA itself commended the industry for its acknowledgment of the issues and for expressing commitment to comply in the future. The NCRAA's report concluded that 'the failings of the existing system do not at this stage warrant full-scale Government regulation', especially given the costs of setting up and maintaining such a system. However, with 'judgment day' looming, it is now incumbent upon industry representatives to maintain their vigilance and ensure that the system remains viable.


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