Alcohol-Impaired Judgment

Two recent enforcement actions by the Federal Trade Commission against manufacturers of alcoholic beverages may help answer a question that has long puzzled observers of the Washington scene: How stupid does the FTC think we are?

In one case, the commission took issue with TV commercials for Beck's beer that showed the product–helpfully described in the FTC's complaint as "a liquid beverage consisting of 5% alcohol by volume"–in the hands of twentysomethings on a sailing ship. "Almost all of the passengers are holding bottles of beer, with one passenger perched precariously on the bowsprit…and others sitting on the edge of the bow," the complaint noted. "No one is wearing a life jacket."

The FTC was appalled by this reckless behavior. "Respondent has depicted boating passengers as drinking Beck's beer while engaged in activities that require a high degree of alertness and coordination to avoid falling overboard," it said. "This conduct is inconsistent with the Beer Institute's own Advertising and Marketing Code and may also violate federal and state boating safety laws."

The FTC majority did not claim that anything in the ads was false or misleading, but it worried that the frolicking beer drinkers set a bad example. In its view, this constituted an "unfair practice," defined as one "likely to cause substantial injury to consumers, when that injury is not reasonably avoidable by the consumers themselves and is not outweighed by countervailing benefits."

To arrive at this judgment, the FTC presumably calculated the number of people who, under the influence of a Beck's commercial, would rush to the docks and board sailboats, taking their beer but leaving their life jackets. It must also have estimated the percentage who would fall overboard and drown. Then it must have concluded that these deaths would not be outweighed by the fun of imitating the German-beer-drinking, big-sailboat-riding actors in the ads.

The FTC also apparently decided that it was unreasonable to expect common sense to intervene at any point between the TV set and Davy Jones's locker. One commissioner went even further, saying "a reasonable youthful consumer could easily be deceived by not appreciating the danger of imitating the behavior featured in the television advertisements." Consequently, he said, the ads were deceptive as well as unfair.

It's quite a stretch to argue that the Beck's commercials perpetrated a fraud, though they may have violated the FTC's sense of propriety. And if the First Amendment would protect the same footage as part of a TV show or movie, shouldn't it also apply to advertising?

Rather than raise such questions, Beck's North America signed a consent order in which it admitted no wrongdoing but promised to stop using the spots and to avoid similar depictions in the future. The company agreed to keep the FTC posted about any ads involving beer and boats.

Allied Domecq Spirits & Wine likewise took the easy way out in a case involving its Kahlua White Russian pre-mixed cocktail. Allied Domecq's offense was to identify the product in a caption as a "low alcohol beverage."

"In truth and in fact," sniffed the FTC, "the Kahlua White Russian is not a low alcohol beverage. It has a significant alcohol content, 11.8 proof (5.9% alcohol by volume), equal to or greater than numerous other alcohol beverages." Allied Domecq's description was therefore "false or misleading."

Wait a minute. The usual White Russian–the kind you get in a bar–consists of one part coffee liqueur to two parts vodka, plus a little milk or cream. Such a concoction is roughly 35 percent alcohol by volume. By comparison, the Kahlua White Russian, at less than 6 percent, is indeed "low alcohol."

Allied Domecq reportedly added the caption because cable networks were uneasy about carrying ads for a beverage they assumed was in the same class as a martini. The caption was the company's way of saying that, in terms of potency, their beverage was more like beer.

Anyone who was confused about what "low alcohol" meant could always consult the label. But the FTC, which pressured Allied Domecq to sign a consent order forbidding future use of the term, apparently considered that expectation unreasonable.

It's hard to decide which is more offensive: the FTC's casual disregard for freedom of speech or its low estimation of American consumers. One thing's for sure: Clumsy beer drinkers aren't the only ones going overboard.