Submitted by ARA (Association for Responsible Alcohol Use)

Introduction

The industry Association for Responsible Alcohol Use (ARA) is an association comprising members that include the major manufacturers of alcohol beverages in South Africa, such as SAB Ltd, members of the SA Liquor Brandowners Association (which include Distell, Brandhouse, KWV, Douglas Green Bellingham, Pernod-Ricard and The Really Great Brand Company amongst others), members of VinPro and members of Wine Cellars SA ,and independent producers like E Snell. A number of distributors and some retail chains such as Tops are associate members. There are currently thirty five associate members.

The ARA is registered as a non-profit organization (NPO) with the Department of Social Development and is focused on the prevention of the negative consequences of alcohol abuse. The association’s mission is to reduce alcohol-related harm through combating the misuse and abuse of alcohol beverages and promoting only their responsible use.

The ARA fully endorses the Minister’s concerns about road safety in South Africa and his ongoing efforts through the amendment of Regulations to improve road safety. The ARA is however concerned by the inclusion of two clauses in the draft amendment of the National road Traffic Regulations, as gazetted on 3 November in Notice 1359 of 2008, banning the legal advertising of legal alcohol beverages. The ARA is unsure of the Department of Transport’s objective in this regard but wishes to point out that the clauses as currently worded would have the effect of a total ban on all alcohol beverage advertising including that on retail outlets, in stadia and other places of entertainment, and on delivery vehicles.

The ARA has since the decade of the 80’s been actively involved in addressing alcohol-related harm and in particular discouraging drinking and driving.

The ARA believes that education and the enforcement of existing laws, including appropriate punishment for transgressors, are key to preventing drinking and driving and reducing alcohol-related harm.

The ARA has worked with the Global Road Safety Partnership in South Africa to create awareness about the dangers associated with drinking and driving and to try and reduce the incidence thereof.

In addition the ARA members have funded television and radio awareness campaigns both individually and in conjunction with the Government’s Arrive Alive campaign, and will continue to do so.

The ARA believes that it is extremely important in regard to alcohol abuse specifically to resist the temptation to find simple solutions to complex problems. The ARA is therefore grateful to be able to present this submission as a constructive contribution to finding effective solutions to the problems of alcohol abuse and misuse, but would, in addition, sincerely request a meeting with the Department to discuss the issue in greater depth.
Advertising

The body of literature examining alcohol advertising and its impact on different groups of consumers is extensive. There is a lack of conclusive evidence that alcohol advertising increases levels of aggregate consumption among adults or young people (Calfee and Scheraga 1994; Duffy 1991, 1995; Fisher 1993, 1999; Fisher and Cook 1995; Nelson and Moran 1995; Nelson and Young 2001). Furthermore, the literature shows no causal link between alcohol advertising and particular drinking patterns and resulting problems (Fisher 1993, 1999; Fisher and Cook 1995; Simpson et al. 1985; Young 1993). Advertising does, however, have a measurable effect on market share for brands and a substitution effect between brands (Gius 1996; Lee and Tremblay 1992; Nelson 1997).

A similar assessment has been reached by independent third party reviews of the literature, such as the one described in the 10th Special Report to the U.S. Congress on Alcohol and Health (National Institute on Alcohol Abuse and Alcoholism 2000).

As the following examples show, market data from a number of countries also support the inconclusiveness of the research literature on the effect of alcohol advertising on aggregate demand for or consumption of beverage alcohol.

• In the Netherlands, Germany and the United Kingdom, alcohol consumption has declined despite increases in advertising expenditure (Calfee and Scheraga 1994).

• Although the amount of advertising for all beverage types has increased dramatically over the past century, data show that the consumption of beer, wine and spirits in the United States has remained relatively constant. In fact, per capita consumption levels for 1998 do not differ dramatically from those of 1900 (Nephew et al. 2000).

• Bans on broadcast advertising in Sweden, Denmark, Finland, and Norway have not resulted in a decline in consumption (Nelson 2001; Nelson and Young 2001).

• Despite the repeal of an advertising ban on all types of beverage alcohol in New Zealand in 1992, there was no resulting increase in the consumption of distilled spirits. The already declining spirits market fell even further during the two years following the introduction of broadcast advertising (Distilled Spirits Association of New Zealand 2001).

• Data from the U.S. Bureau of the Census and the Leading National Advertisers Index also show that increases in advertising within individual sectors of the beverage alcohol industry have no impact on consumption. As shown in Figure 1, despite a significant increase in advertising expenditure during the period 1974-1989 by the brewing industry, the beer market has remained constant.

The lack of a demonstrable positive relationship between advertising and aggregate consumption is not unique to the alcohol market. The experience of other industries with regard to their products is similar.

Young people

The impact of alcohol advertising and marketing on young people has received considerable attention. A substantial body of research has been devoted to the respective roles of family, peers, culture, social forces, media, and other significant factors in determining the decision by young people whether or not to drink. The most powerful factors in shaping beliefs and attitudes about drinking are parental and peer influence (Adlaf and Kohn 1989; Fisher 1993; Milgram 2001; Smart 1988; Stockdale 2001). Alcohol advertising, on the other hand, plays an insignificant role.

In fact, there is no compelling evidence of an unequivocal correlation between advertising and either drinking patterns among young people, or rates of abuse (Young 1993). It is likely that other forces, especially parental and peer influences, play a more significant role and that drinking patterns among young people are much more likely to be influenced by the prevailing culture around alcohol, than by advertising (Houghton and Roche 2001).

The industry does not condone the promotion and advertising of beverage alcohol to those under the legal minimum purchase age. Yet it should be acknowledged that young people are inevitably exposed to beverage alcohol advertising, as they are to advertising for any other consumer product. They are aware of it, and are able to identify and distinguish between alcohol brands, just as they are able to discern brands of other consumer goods. However, the evidence does not support the notion that such awareness increases consumption by young people (Fisher 1993, 1999; Grube 1993).

Evidence of alcohol consumption patterns among young people in a number of countries included in the European School Survey Project on Alcohol and Other Drugs (ESPAD) Report (Hibbell et al. 2000) is instructive. In some of the countries included in the study, alcohol advertising has been banned; in others, there is reliance on self-regulation by the industry to ensure responsible advertising. The results from the study show that there is no clear relationship between alcohol advertising, its regulation, and either drinking patterns or problems among youth. Instead, the ESPAD Report points to the importance of culture in determining drinking patterns and problems in different societies.

For example:

• Denmark has a ban on all broadcast advertising except on low alcohol-content products, as well as various restrictions on print and outdoor advertising. At the same time, Denmark has one of the highest reported rates of intoxication among young people.
• Ireland, a country that has banned all spirits advertising in the broadcast media and has imposed restrictions on other beverage types, also has one of the highest reported rates of intoxication among youth.
• Italy, on the other hand, reported one of the lowest rates of intoxication, even though advertising relies heavily on self-regulatory codes.

In summary, no scientific evidence exists to support the notion that beverage alcohol advertising has any significant impact on the rate of alcohol abuse and alcoholism. In fact, all evaluations suggest that advertising is not a contributory force influencing the overall level of alcohol consumption. Hence, the placing of restrictions or bans on advertising as an instrument of public policy with respect to the prevention of alcohol-related damage is highly questionable.
Self-regulation

Because the ARA wishes to make it absolutely clear that its members will not, and do not encourage irresponsible drinking (which includes excessive consumption, drinking and driving and underage drinking), the Association endorses a strict code of practice which governs how the industry may market its products. Adherence to the Code and the compliance system (which has been updated on a number of occasions since its adoption in 1989 – latest edition attached) is also a way to reassure the South African community of the industry’s objective to responsibly market its products only to adult consumers not at risk, who have chosen to consume alcohol beverages.

The ARA Code includes specific clauses on outdoor advertising and is effectively policed with firm action taken against anyone that transgresses.

The ARA believes that self-regulation is a far more effective means of addressing concerns around advertising and is committed to ensuring full compliance.

Conclusions

• ARA acknowledges the problems caused by the misuse of alcohol beverages and is supportive of every effort to effectively reduce alcohol-related harm

• The goal of advertising is to capture the largest possible proportion of the business of those over the legal drinking age who have already made the choice to drink.

• Advertising has a measurable effect on market share for particular brands and substitution between brands.

• Advertising has not been shown to increase aggregate consumption by adults or young people.

• A causal link has not been established between alcohol advertising and harmful or excessive drinking patterns and resulting problems.

• However, due to alcohol’s potential for harm if misused, the marketing of alcohol beverages requires careful attention.

• Industry self-regulation, by which it is responsible for monitoring and enforcing its own conduct around the marketing of its products, is an effective approach to ensuring responsible marketing.

• Banning advertising removes consumer choice and is likely to entrench market shares of existing brands thereby reducing competition.

• The ARA, together with the various stakeholders including government, shares a common objective in combating alcohol abuse and misuse to reduce alcohol-related harm. A wealth of international experience and expertise exists to help develop a strategy suited to the South African scenario to effectively tackle the problems associated with alcohol abuse. The ARA most certainly wishes to assist and work with stakeholders to develop and implement such a strategy.

• The ARA suggests that government and industry agree a system of co-regulation and work together to ensure the effectiveness of a code on outdoor advertising rather than proceeding with the ban which will have little if any impact in reducing alcohol-related harm.