FTC ORDERS TO FILE SPECIAL REPORTS

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Appendix F

FTC ORDERS TO FILE SPECIAL REPORTS

SENT TO BEER, DISTILLED SPIRITS

AND WINE PRODUCERS

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Division of Advertising Practices

August 6, 1998

We have enclosed an Order to File Special Report ("Order") pursuant to Section 6(b) of the

Federal Trade Commission Act (the "FTC Act") regarding your company's advertising and

promotion of malt beverages, and the nature and effectiveness of industry self-regulatory efforts.

The information provided in response to this Order will be used to compile a report to Congress on

the alcohol industry’s self-regulatory efforts with respect to alcohol advertising and underage

drinking, as requested by the U.S. Congress Committees on Appropriation.’

Please read the instructions contained within the Order carefully. The Special Report must

be completed and returned by October 5, 1998. If you have any questions regarding the filing of

this Special Report, please call Janet M. Evans at (202) 326-2125 or Richard F. Kelly at (202) 326-

3304.

Documents submitted in compliance with this Order that are marked "confidential" will not

be disclosed without first giving you ten days' notice of the Commission's intention to do so, except

as provided in Sections 6(f) and 21 of the FTC Act. Furthermore, no documents containing

confidential commercial or financial information within the meaning of Section 6(f) of the FTC Act

may be disclosed publicly without your consent. We will disclose data and other information

collected by the 6(b) reports only in an anonymous or aggregate form.

In addition to the above requested information, we would be happy to consider any other

additional information you consider relevant to this inquiry. Thank you for your cooperation in this

important effort.

Sincerely,

Richard F. Kelly

Janet M. Evans

Attorneys

1 Congressional Record -- House at H.10860, November 13, 1997.

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.!

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.

! “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).

Please supply written answers to the following items:

L. 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 .ompany 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

10.

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 ameuded

this policy. State how the company defines “appeal primarily" for the purposes of

complying with this section of the Ccde.

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.

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.

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.

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.

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 !ocations 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.

LL.

12.

13.

14.

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 practic. ,: 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.

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.

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.

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

15.

16.

17.

18.

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

motio. pictures and television (cable or -oadcast) programs containing these product

placements.

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.

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.

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.

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

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Division of Advertising Practices

August 6, 1998

Dear

We have enclosed an Order to File Special Report ("Order") pursuant to Section 6(b) of the

Federal Trade Commission Act (the "FTC Act") regarding your company's advertising and

promotion of distilled spirits and wine, and the nature and effectiveness of industry self-regulatory

efforts. The information provided in response to this Order will be used to compile a report to

Congress on the alcohol industry’s self-regulatory efforts with respect to alcohol advertising and

underage drinking, as requested by the U.S. Congress Committees on Appropriation.’