Beck's North America, Inc.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 982-3092]

Beck's North America, Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practice 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 direced to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Lee Peeler, FTC/S-4002, Washington, D.C. 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 Practice (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, N.W.,

Washington, D.C. 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 Beck's North America,

Inc. (``BNAI''), a Delaware corporation.

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 television

advertisements for Beck's Beer that depict young adults drinking

alcohol on a sailing ship, while engaging in activities that allegedly

pose a substantial risk of injury. BNAI has ceased disseminating the

ads that are the subject of the complaint.

The challenged advertisements depict young adults partying and

drinking beer on a schooner at sea. On the deck of the boat is a large

bucket of ice, filled with bottles of Beck's Beer. Almost all of the

passengers are holding bottles of beer, with one male passenger with a

bottle of beer in hand standing precariously on the bowsprit (a spar

extending almost horizontally off the bow of the boat), and others

sitting or leaning on the edge of the bow, where there is no railing.

Because of the significant risks of drinking while boating, the

U.S. Coast Guard has recently initiated a public education campaign

designed to encourage boat operators and passengers to ``boat safe and

sober.'' In this case, the challenged ads depict individuals combining

drinking with activities--bowriding and standing on a bowsprit--that

could constitute negligent boat operation under federal and state

[[Page 43182]]

boating safety statutes. In addition, the advertising is inconsistent

with the provisions of the Beer Institute Advertising and Marketing

Code, which provides that ``[b]eer advertising . . . should not portray

or imply illegal activity of any kind,'' and ``[b]eer advertising . . .

should not associate or portray beer drinking before or during

activities which require a high degree of alertness or coordination.''

Paragraph five of the complaint describes the challenged

advertisements as depicting individuals drinking Beck's beer while

engaging in acts that require a high degree of alertness and

coordination to avoid falling overboard. This conduct is inconsistent

with the Beer Institute's own Advertising and Marketing Code and may

also violate federal and state boating safety laws. It alleges that the

risks associated with such activities while boating are greatly

increased by consumption of alcohol. It notes that even low and

moderate blood alcohol levels sufficiently affect coordination and

balance to place passengers at increased risk of falling overboard and

drowning, and that many persons are unaware of this increased risk.

This paragraph also notes that as many as one-half of all boating

fatalities are alcohol-related, including an average of 60 recreational

boat fatalities annually from falling overboard while drinking.

Accordingly, respondent's depiction of this activity in its

advertisements is likely to cause substantial injury to consumers that

is not outweighed by countervailing benefits to consumers or

competition and is not reasonably avoidable by consumers. As a result,

the complaint alleges that respondent's practice was an unfair act or

practice.

The Commission has substantial concern about advertising that

depicts conduct that poses a high risk to health and safety. As a

result, the Commission will closely scrutinize such advertisements in

the future.

The consent order contains provisions designed to remedy the

violations charged. Part I of the order prohibits respondent from

future dissemination of the television advertisements attached to the

complaint as Exhibits A and B, or of any other advertisement that a)

depicts a person having consumed or consuming alcohol on a boat while

engaging in activities that pose a substantial risk of serious injury

from falling overboard or b) depicts activities that would violate 46

U.S.C. 2302(c). The cited statute, 46 U.S.C. 2302(c), makes it illegal

to operate a vessel under the influence of alcohol or illegal drugs.

The remaining parts of the order contain standard record keeping

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

change (Part IV); compliance report filing (Part V) and sunset (Part

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.

Statement of Commissioner Mozelle W. Thompson

Today, the Commission voted to accept a consent agreement with

Beck's North America, Inc. (``Beck's'') in File Number 982-3092 on

grounds that Beck's disseminated or caused to be disseminated unfair

television advertisements. I joined in that vote. I also believe,

however, that the advertisements at issue were deceptive. The

Commission has defined deceptive advertising as ``that which contains a

representation, omission or practice that is likely to mislead the

consumer acting reasonably in the circumstances, to the consumer's

detriment.'' \1\ In my view, the Beck's television advertisements if

this definition.

---------------------------------------------------------------------------

\1\ See Cliffdale Associates, Inc., 103 F.T.C. 110, 176 (1984)

Appeal dismissed sub nom., Kovan v. FTC, No. 84-5337 (11th Cir. Oct.

10, 1984) (Deception Statement).

---------------------------------------------------------------------------

First, I believe the advertisements imply to reasonable targeted

consumers that consuming alcohol while boating is appropriate and/or

safe. In fact, the actors begin one advertisement by stating ``Wanna

have some fun? Mix hot music, cool people, [a] big boat and a great

German beer.'' Unfortunately, the advertisement does not disclose that

consuming alcohol while boating poses a heightened danger not only to

the boat operator, but also to passengers. It also fails to disclose

that such behavior may violate applicable Federal boating laws.\2\

Second, as evidenced by the actors and the language portrayed in the

advertisement, I believe that the message is targeted at a youthful

audience. Accordingly, it can be justifiably inferred that a reasonable

youthful consumer could easily be deceived by not appreciating the

danger of imitating the behavior featured in the television

advertisements.

---------------------------------------------------------------------------

\2\ This problem has become so serious that the U.S. Coast Guard

has recently launched a new campaign to better inform the public of

the dangers of mixing boating and alcohol.

---------------------------------------------------------------------------

For these reasons, I would find that the Beck's advertisements were

deceptive as well as unfair under Section 5 of the FTC Act.

[FR Doc. 98-21612 Filed 8-11-98; 8:45 am]

BILLING CODE 6750-01-M