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TTB Issues Four-Part Series on Health-Related Alcohol Marketing Claims

As consumers continue to trend toward more health-conscious options, including in their choice of alcoholic beverages, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has responded with guidance on health-related marketing claims in a four-part weekly newsletter. The guidance is in response to what TTB categorized as an “increasing number of alcohol beverage advertisements…suggesting a relationship between alcohol beverage consumption and purported health benefits or effects” and provides industry members general guidance utilizing specific examples to help the industry navigate marketing in this space.

As a reminder, the TTB prohibits industry members from making any health-related statement in advertising that is (1) untrue or (2) tends to create a misleading impression of the effects of alcohol consumption on health.

Throughout the four-week focus, TTB provided some examples of unsubstantiated advertising statements that suggest consuming a particular alcohol beverage will mitigate health consequences typically associated with alcohol consumption that would be considered prohibited:

  • “No headaches”
  • “Hangover free”
  • “Diabetic friendly”

TTB also provided examples of unsubstantiated advertising statements that suggest consuming an alcoholic beverage will result in health benefits that would also be considered prohibited:

  • “Recovery drink”
  • “Anti-inflammatory”
  • “Aphrodisiac”
  • “Health benefits”

In week three, TTB weighed in on the use of the term “clean” in alcohol labeling and advertising. TTB reminded readers that it does not define the word “clean,” nor does it have a standard for the use of the term on labels or in advertisements. Accordingly, it alerted consumers that the use of the term should not be interpreted as suggesting a product is organic or has met any other production standard set by TTB. Whether the use of the term is permissible depends upon the totality of the label or the advertisement in which the term appears.

TTB did provide some examples of when the term is used permissibly and when its use may be misleading:

  • If the term “clean” is used as a descriptor for the taste of the beverage and is considered puffery, it may be used permissibly. For example, “X winery makes clean, crisp wine.”
  • If the term “clean” is used in a way that suggests that consumption of alcohol will have health benefits and/or that the health risks otherwise associated with alcohol consumption will be mitigated, the term’s use may be prohibited. For example, “X malt beverage is clean and healthy” or “Y vodka’s clean production methods mean no headaches for you.”

The final iteration of the four-part series reminded readers simply that “TTB advertising regulations prohibit any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects of alcohol consumption on health.”

With the amount of attention the TTB has dedicated to this area, we encourage industry members to monitor health-related advertising and marketing closely. For questions about health-related claims in the alcohol industry, please contact Alva Mather, Nichole Shustack, Isabelle Cunningham or McDermott’s Alcohol Regulatory [...]

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Eighth Circuit Hints at Unconstitutionality of Missouri Restrictions on Alcohol Advertising

Last week, the US Court of Appeals for the Eighth Circuit weighed in on the legality of restrictions on alcohol advertising under the First Amendment, issuing an opinion in Missouri Broadcasters Association v. Lacy that could eventually broaden free speech protections for alcohol beverage advertisements. After the lower court granted defendants’ motion to dismiss and plaintiffs appealed, the Eighth Circuit reversed the district court’s dismissal, finding that plaintiffs’ claim alleging the unconstitutionality of a Missouri statute and two regulations should be heard.

The case concerned three Missouri provisions – two regulations and a statute – that restrict the advertising of alcohol beverages:

  1. a regulation prohibiting retailers from advertising price discounts outside of the licensed premises (but allowing the advertising of discounts by using generic descriptions (e.g., “Happy Hour”), as well as the advertising of specific discounts within the licensed premises);
  2. a regulation prohibiting retailers from advertising prices below cost; and
  3. a statute requiring manufacturers and wholesalers choosing to a list a retailer in an advertisement to exclude the retail price of the product from the advertisement, list multiple unaffiliated retailers and make the listing relatively inconspicuous.

Plaintiffs – a broadcasting industry group, radio station operator, winery and retailer – sued Missouri’s supervisor of liquor control and attorney general, alleging that the three provisions are facially invalid under the First Amendment in that they prohibit truthful, non-misleading commercial speech, are inconsistently enforced by the state and the challenged statute unconstitutionally compels speech.

To state a claim that a statute is facially unconstitutional under the First Amendment, Supreme Court precedent instructs that plaintiffs must show that there are no set of circumstances under which the challenged provision would be valid, or that a substantial number of the provision’s applications are unconstitutional. Alcohol beverage advertisements involve commercial speech, which receives less protection under the First Amendment than other constitutionally protected forms of expression. In Central Hudson Gas & Electric Corp. v. Public Service Comm’n of New York (1980), the Supreme Court articulated a four-part test for determining the constitutionality of laws restricting commercial speech:  whether (1) the speech concerns lawful activity and is not misleading; (2) the governmental interest justifying the regulation is substantial; (3) the regulation directly advances the governmental interest; and (4) the regulation is no broader than necessary to further the governmental interest.

Applying the third and fourth factors of the Central Hudson test (plaintiffs and defendants agreed on the first two factors of the test), the court found that the facts plaintiffs alleged were “more than sufficient” to state a plausible claim. First, the court opined, plaintiffs made sufficient allegations that the challenged provisions do not directly advance Missouri’s substantial interest in promoting responsible drinking. Although defendants argued that a link exists between advertising promotions and increased demand for alcohol beverages, the court noted that “multiple” inconsistencies in the regulations demonstrate that the regulations do not advance Missouri’s interest in promoting responsible drinking. Likewise, the court determined, plaintiffs pled sufficient facts to support [...]

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