over distilled spirits particularly for young di drinkers: Advertising on network television; Lower tax rates;

Transcription

1 Litigation, Alcohol Policy, and Public Health: Is the Glass Half Full or Just Empty? James F. Mosher, JD Alcohol Policy Consultations Presentation at the Using Law, Policy, and Research to Improve the Public s Health: A National Conference sponsored by The American Society of Law, Medicine & Ethics, The Public Health Law Association, and The Centers for Disease Control and Prevention. September 13, 2010

2 Tobacco Litigation: A Roadmap for Alcohol Policy Advocates and the Alcohol Industry

3 Potential Litigation Targets Diageo Company s aggressive (and successful) targeting of the youth market Marketing of Alcoholic Energy Drinks (AEDs)

4 Diageo: The Innovator of the Distilled Spirits Industry Formed in 1997 when Guinness and Grand Metropolitan merged, becoming the largest distilled spirits company in the world. Determined to expand the U.S. market, which has been dominated by beer.

5 Diageo: Competing with Beer Beer has significant marketing advantages over distilled spirits particularly for young di drinkers: Advertising on network television; Lower tax rates; More retail outlets.

6 The Answer Create a malt-based, low-alcohol beverage erage with distilled spirits branding that is appealing to young drinkers, particularly young women, and regulated as beer.

7 The Answer Create a malt-based, low-alcohol beverage erage with distilled spirits branding that is appealing to young drinkers, particularly young women, and regulated as beer.

8 Reaching the Youth Market Diageo rolled out Smirnoff Ice in the US market...it suddenly put the once-stodgy Smirnoff name on the tips of millions of echo boomers tongues (Impact,, May 15, 2003) Echo Boomers: Americans born from years old in 2003

9 Television Advertising Placement: Youth Audience Overexposure 35% 30% 25% 20% Alcopop ads Distilled spirits 15% Beer 10% Industry average 5% 0% 2006 Source: Center on Alcohol Marketing and Youth

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11 Alcopop Brand Preferences: Underage Drinkers vs. Overall Market 5 State Survey, 4075 Respondents, 2004 Youth Market Share Overall Market Share 11% 14% 54% Smirnoff Ice Mike's Hard Lemonade Bacardi Silver 38% 38% 9% Other 15% Wolfson M. et al. Flavored Malt Beverage Use in a Multi-state Sample of Adolescents, Wake Forest University, December 2005; Impact Databank

12 Alcopops aka Flavored Malt Beverages Flavored malt beverages exhibit little or no traditional beer or malt beverage character. Brewers remove the color, bitterness, and taste t that t are generally associated with beer. This leaves a base product to which brewers add various flavors, which typically contain distilled spirits, to achieve the desired taste profile. Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Description of Flavored Malt Beverages (Alcopops)

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14 Beverage Choice for 12 th Grade 25 Female Binge* Drinkers % binge dr rinkers Liquor Beer Wine *5+ drinks in one setting

15 Smirnoff Vodka Sales (U.S., thousands of nine-liter cases) Introduction of Smirnoff Ice Smirnoff Vodka sales

16 U.S. Per Capita Consumption By beverage type (14 years+) 1 Beer 0.6 Distilled Spirits

17 Summary of Evidence Diageo successfully targeted the youth alcohol market through product development, advertising copy and placement, and other marketing strategies. The company misrepresented Smirnoff Ice and Captain Morgan s Parrot Bay alcopops as a beer (instead of a distilled spirit) to gain regulatory advantages.

18 Status of Litigation Nebraska lawsuit seeks reclassification of alcopops as distilled spirits as first step toward broader litigation efforts. Similar litigation in California failed due to procedural hurdles. Local California jurisdiction conducted a review of evidence, but litigation is on hold due to perceived barriers.

19 Litigation Barriers Regulatory agencies refusal to enforce existing laws re classification of alcopops. Tightening of Unfair Business Practices evidentiary requirements, in particular the need to show specific illegal activity. Expanded commercial speech protections under the First Amendment. Costs of litigation. Limitations on who has standing to bring suit.

20 Alcoholic li Energy Drinks (AEDs): Prepackaged beverages that combine alcohol with high levels of caffeine and other additives Contain between 4% and 12% alcohol in 8 oz. to 23.5 oz. cans

21 The Energy Drink Market: Youth thd Driven One in three teens are likely to use energy drinks compared to one in ten adults. Youth consumption is rapidly increasing.

22 Youth/Adult Energy Drink Consumers 35% 30% 25% 20% 15% Youth (12-17) 10% Adults (18+) 5% 0% Regular Users Heavy Users (10+/month)

23 Which of these energy drink brands contain alcohol?

24 Sample Posting on the Joose Facebook Page The first time I drank Joose I finished 8 cans and passed out!!!! We drink Joose all day every day. I can drink 5 Joose in 1 day and DAT Beer is Bomb!!! I m glad you are so easy g y y to steal!

25 Ventura County, CA car crash caused by an underage drunk driver who consumed Joose Alcoholic Energy Drink

26 Patrons leaving bars in a college community reporting consumption of caffeinated alcoholic beverages were three times more likely l to be highly hl intoxicated i t and df four times more likely to report an intention to drive than other drinking patrons. (Thombs, et. al, 2009)

27 State Attorneys General Investigation 13 States and the City/County of San Francisco initiated the investigation. A A large volume of marketing documents were subpoenaed.

28 State Attorneys General Settlement Miller/Coors and Anheuser- Busch agree to remove stimulants from products. Documents are sealed. Settlement prompts an FDA investigation. FDA investigation is still in process.

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30 Alcohol Industry Lessons from Tobacco Litigation Gain control of regulatory agencies. Hire former Attorneys General and other influential politicians and officials as representatives. Mike Miller represents Anheuser Busch Promote and finance tort reform legislation and initiatives that will create barriers to public health- oriented litigation Prepare litigation defense strategy that will create huge costs for plaintiffs and long delays. Initiate sophisticated public relations campaigns claiming an interest in preventing underage drinking.

31 Next Steps Litigation remains a potent tool in efforts to prevent alcohol-related problems. Conduct research on alcohol brands and marketing. Promote modest suits that can serve as stepping stones (e.g., AED investigation, but with disclosure). Recruit local governmental bodies, Attorneys General and other governmental agencies to sponsor litigation and investigations.