Allied Domecq Spirits & Wine Americas, Inc. et al.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 982-3050]

Allied Domecq Spirits & Wine Americas, Inc. et al.; Analysis to

Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before October 13, 1998.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Lee Peeler, FTC/S-4002, Washington, DC 20580. (202) 326-3090.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Pracitce (16 CFR 2.34), notice is hereby

given that the above-captioned consent agreement containing a consent

order to cease and desist, having been filed with and accepted, subject

to final approval, by the Commission, has been placed on the public

record for a period of sixty (60) days. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home Page

(for August 6, 1998), on the World Wide Web, at ``http://www.ftc.gov/

os/actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW,

Washington, DC 20580, either in person or by calling (202) 326-3627,

Public comment is invited. Such comments or views will be considered by

the Commission and will be available for inspection and copying at its

principal office in accordance with Section 4.9(b)(6)(ii) of the

Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from Allied Domecq Spirits

& Wine Americas, Inc. and Allied Domecq Spirits & Wine USA, Inc. d/b/a

Hiram Walker, Delaware and Michigan corporations, respectively

(hereinafter collectively referred to as Allied).

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

The Commission's complaint in this matter concerns two nearly

identical television advertisements for Allied's Kahlua White Russian

pre-mixed

[[Page 43181]]

cocktail. According to the complaint, these ads falsely represented

that the product was a ``LOW ALCOHOL BEVERAGE.'' Allied has ceased

making this representation.

Paragraph seven of the complaint sets out several reasons why the

Kahlua White Russian pre-mixed cocktail should not be represented as a

low alcohol beverage. It has significant alcohol content, 11.8 proof

(5.9% alcohol by volume), equal to or greater than numerous other

alcohol beverages. For example, a Kahlua White Russian has

substantially more alcohol ounce for ounce than many beers, malt

liquors and wine coolers. For some people, drinking as few as two or

three Kahlua White Russians will begin to impair normal functions, such

as driving. It is also pertinent that the Bureau of Alcohol, Tobacco

and Firearms has limited use of the term ``low alcohol,'' for the

purposes of beer and malt liquor, to products with less than 2.5%

alcohol by volume. The alcohol content of a Kahlua White Russian is

substantially higher, with 5.9% alcohol by volume. Accordingly, the

complaint alleges that the low alcohol beverage representation was

false or misleading.

The consent order contains provisions designed to remedy the

violations charged and to prevent Allied from engaging in similar acts

in the future. Part I of the order prohibits any representation that

any beverage alcohol product containing 5.9% alcohol by volume is a low

alcohol beverage, as well as any misrepresentation, through numerical

or descriptive terms, or any other means, of the amount of alcohol

contained in any beverage alcohol product. Part I of the order does not

prohibit Allied from making any representation about the amount of

alcohol contained in any beverage alcohol product that is specifically

required in advertising by the Bureau of Alcohol, Tobacco and Firearms.

Part I of the order also does not prohibit Allied from making non-

misleading claims presenting clear and accurate comparisons of the

alcohol content of Kahlua White Russians and any other specified

beverage alcohol product. Indeed, Commission policy encourages truthful

comparative advertising as an important means of informing consumers

about the relative merits of competing products. See, In Regard to

Comparative Advertising, 15 CFR 14.15 (favoring comparative advertising

generally); Guides for the Use of Environmental Marketing Claims, 16

CFR 260.6(d) (guidance on comparative environmental claims);

Enforcement Policy Statement on Food Advertising, p. 10 (1994)

(guidance on comparative nutrient content claims).

The remaining parts of the order contain record keeping (Part II);

order distribution (Part III); notification of corporate change (Part

IV); compliance report filing (Part V) and sunset (VI) provisions.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not to constitute an official interpretation

of the agreement and proposed order or to modify in any way their

terms.

By direction of the Commission.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 98-21611 Filed 8-11-98; 8:45 am]

BILLING CODE 6750-01-M