UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

COMMISSIONERS:

Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle

ORDER TO FILE SPECIAL REPORT

Pursuant to a resolution of the Federal Trade Commission dated 1998, entitled "Resolution Directing Use of Compulsory Process," a copy of which is enclosed, , hereinafter referred to as "the company," is ordered to file a Special Report with the Commission no later than 1998, containing the information specified herein.

The information provided in response to the Special Report will assist the Commission in preparing a report requested by Congress on the alcohol industry’s self-regulatory efforts with respect to alcohol advertising and underage drinking.(1)

The Special Report is required to be subscribed and sworn to by an official of the company who has prepared or supervised the preparation of the Special Report from books, records, correspondence, and other data and materials in the company’s possession or control. The person who signs the Special Report must give his or her full name, business address, and official capacity.

The Special Report should restate each item of this Order with which the corresponding answer is identified. If any question cannot be answered fully, give the information that is available and explain in what respects and why the answer is incomplete. For purposes of this Special Report, the words “the company” include any parent, subsidiary or affiliated companies.

Please supply written answers to the following items:

1. State a) the full name of the company, its official address, and its date and state of incorporation; b) whether the company is a subsidiary company, and if so, the name of the parent company; c) whether the company has any subsidiary or affiliated companies, and if so, the names of the subsidiary and affiliated companies; and d) for each parent and subsidiary, the same information specified in a) above.

 

2. Section 4(d) of the Beer Institute Advertising and Marketing Code (hereinafter "Code”) provides that "(b)eer advertising and marketing materials should not be placed in magazines, newspapers, television programs, radio programs, or other media where most of the audience is reasonably expected to be below the legal purchase age." Provide a copy of all written policies of the company in place during any part of calendar years 1997 and 1998, referring or relating to the implementation of or compliance with this section of the Code. State the date on which the company first adopted and last amended each of these policies. To the extent not reflected in the above requested policies, state how the company defines “most of the audience” for purposes of complying with this section of the Code.

 

3. Describe in detail the steps taken by the company during calendar years 1997 and 1998 to ensure that “most of the audience” for its beverage alcohol products advertised on broadcast television and radio, and cable television, is not reasonably expected to be below the legal purchase age. Include in that response a detailed description of: a) what information the company possesses on the demographics of the expected audience before each ad is placed; b) what information the company obtains on the actual demographics of the audience that viewed or heard the ad; and c) what instructions the company gives to its media buyers, brokers, advertising agencies and others who place the company’s advertisements, including cooperative advertisements using the company’s trademark, regarding the audience demographics for programs in which ads are to be placed.

 

4. Identify, describe and provide a copy of all company policies in place during any part of calendar years 1997 and 1998 that limit or specify the size of an underage audience for programming in which advertisements are to be placed (e.g., policies stating that no more than “x percentage” of the audience may be below the legal purchase age) and state the date on which the company first adopted and last amended each of these policies.

 

5. Section 4(a) of the Code provides that "(b)eer advertising and marketing materials should not employ any symbol, language, music, gesture or cartoon character that is intended to appeal primarily to persons below the legal purchase age." Provide a copy of all written policies of the company in place during any part of calendar years 1997 and 1998 referring or relating to the implementation of or compliance with this section of the Code. Include the date on which the company first adopted and last amended this policy. State how the company defines "appeal primarily" for the purposes of complying with this section of the Code.

 

6. Describe in detail the steps the company takes to ensure that an advertisement for its beverage alcohol products does not contain "any symbol, language, music, gesture or cartoon character" that appeals primarily to persons below the legal purchase age. Identify, describe and provide copies of all copy tests and other consumer research performed or obtained by the company since January 1, 1989 or in the company’s possession or control addressing whether any advertising theme or technique employed in or considered for an ad, including "any symbol, language, music, gesture or cartoon character," appeals or does not appeal to those below the legal purchase age.

 

7. Identify, describe and provide a copy of any advertisement or advertising theme or technique, including any symbol, language, music, gesture or cartoon character, that the company has rejected since January 1, 1989 for inclusion in an advertisement because of its appeal to persons below the legal purchase age.

 

8. Describe in detail the enforcement mechanism(s) available under the Code to file and resolve complaints regarding possible violations by a Beer Institute member of Code provisions. Identify any instance(s) since January 1, 1989 where Code authorities notified the company about a complaint regarding the company's advertising or marketing. Describe how that complaint was resolved.

 

9. Describe in detail how the company responds to complaints and inquiries about whether the company’s advertisements appeal to those under the legal purchase age. Include copies of all such complaints or inquires received by the company during calendar years 1997 and 1998, and all responses thereto by the company.

 

10. Section 4(h) of the Code provides that “brewers will post reminders at appropriate locations in their web site indicating that brewer products are intended only for those of legal purchase age. These locations include entrance into the web site, purchase points within the web site, and access into adult-oriented locations within the web site, such as virtual bars.” Provide a copy of all written policies of the company in place at any time during calendar years 1997 and 1998, referring or relating to the implementation of or compliance with this section of the Code. State the date on which the company first adopted and last amended each of these policies.

 

11. Identify by web address and product brand all World Wide Web sites operated by the company for one or more of its beverage alcohol products. Describe in detail the steps taken by the company during calendar years 1997 and 1998 to prevent or limit persons under the legal purchase age from accessing the company’s web sites. Include in that response all company policies or practices: a) to verify that persons under the legal drinking age are not accessing its web pages; b) to monitor postings in chat rooms or bulletin boards in its web pages; and, c) to remove postings made by users who identify themselves as underage or who, by the names used or messages left, appear to be below the legal purchase age. Identify and provide copies of all studies, research or other data performed or obtained by the company or in the company’s possession or control that indicate the extent to which those under the legal purchase age are accessing alcohol beverage web sites and web pages for the company’s beverage alcohol products.

 

12. Describe in detail the steps taken by the company in calendar years 1997 and 1998 to ensure that the content of the company’s web site(s) does not appeal primarily to persons below the legal purchase age. Identify, describe and provide a copy of all copytests or other consumer research performed or obtained by the company or in the company’s possession or control on the content of its web pages, including any contests, games, bulletin boards or chat rooms, to assess its appeal to persons below the legal purchase age. Identify and provide copies of any proposed content for its web site(s) that the company rejected because it might “appeal primarily” to those under the legal purchase age, and any revisions the company made to then existing content of its web site(s) during calendar years 1997 and 1998 because of concerns that such content might otherwise “appeal primarily” to those under the legal purchase age.

 

13. Identify and describe all company polices in place during any part of calendar years 1997 and 1998 that set out the steps taken by the company to discourage underage drinking. State the amount of company expenditures on public service announcements (PSAs), separately specifying costs for production and dissemination during calendar years 1997 and 1998. Identify and provide a copy of all studies, research or other data performed or obtained by the company since January 1, 1989 or in the company’s possession or control that evaluate the effectiveness of the company’s efforts to discourage underage drinking of beverage alcohol products.

 

14. Identify each product placement (an appearance or mention of the trademark, product name, or product) of the company’s beverage alcohol products in motion pictures, and in television (cable or broadcast) programs during calendar years 1997 and 1998, by brand name of the product, and name, date and time of the production’s first airing. Indicate how the company determined that a majority of the audience for the motion picture or television (cable or broadcast) program containing these product placements would be above the legal purchase age. Identify and provide a copy of all studies, research or other data performed or obtained by the company or in the company’s possession or control that set out the actual audience demographics for each of the motion pictures and television (cable or broadcast) programs containing these product placements.

 

15. Describe in detail the methods used by the company during calendar years 1997 and 1998 to advertise, market or promote its products in college or university media, on college or university campuses, at college or university sponsored events, at off-campus events advertised in college or university media, and to fraternities, sororities, and other clubs and organizations whose members are predominately college or university students. Indicate in that response any company practices or written company policies in place at any time during calendar years 1997 and 1998 intended to ensure that such advertising, marketing or promotion by the company or by its wholesalers, distributors or other sellers: a) is not directed to an underage audience; b) is not included in college or university publications read by a majority underage audience; and c) is not presented at events attended by a majority underage audience.

 

16. Describe in detail the methods used by the company between March 1 and April 30, in calendar years 1997 and 1998, to advertise, market or promote, or sell its beverage alcohol products at beaches, hotels and resorts during spring break. Include in that response a detailed description of any company practices and copies of any written company policies in place at any time during that period to ensure that such advertising, marketing or promotion by the company or by its wholesalers, distributors, or other sellers is not directed to persons below the legal purchase age.

 

17. Identify any alcohol brands targeted by the company at any time during calendar years 1997 and 1998 to consumers below the age of 26, including any brands for which target description includes one or more of the following terms: “21 [years of age]”; “legal drinking age”; “LDA”; “younger”; “college”; “beginner”; and/or “beginning drinker.” Identify, describe and provide a copy of any consumer research, report or study performed or obtained by the company since January 1, 1989 or in the company’s possession or control referring or relating to the purchase or consumption of, or preferences for, alcohol beverages by persons below the legal purchase age.

 

18. Provide the dissemination schedules and the demographics of the viewing audience for all television (cable or broadcast) and radio advertisements disseminated during the weeks of February 2-8, 1997, June 15-21, 1997, February 1-7, 1998 and June 7-13, 1998. Include in the company’s response a copy of each different advertisement and a breakdown of the audience demographics for each separate television showing or radio broadcast for the following three age categories: under 21, 21- 25, and over 25.

Penalties may be imposed under applicable provisions of federal law for failure to file Special Reports or for filing false reports.

The Special Report called for in this Order is to be filed on or before ____________.

By direction of the Commission.

Robert Pitofsky
Chairman

SEAL

Date of Order:

The Special Report required by this Order, or any inquiry concerning it, should be addressed to the attention of:

Richard F. Kelly or Janet M. Evans
Division of Advertising Practices
Federal Trade Commission
Washington, D.C. 20580

Endnotes

(1)“The conferees are aware of concerns about the impact of alcohol advertising on underage drinking, and understand that the FTC is engaged in the ongoing monitoring of the advertising and marketing practices of manufacturers of beverage alcohol. The conferees expect the FTC to emphasize these activities, investigate when problematic practices are discovered, encourage the development of effective voluntary advertising codes, and report their findings back to the Committees on Appropriations.”(Congressional Record -- House at H.10860, November 13, 1997).