WASHINGTON — The Federal Trade Commission has issued subpoenas to both Seagram Ltd. and the Stroh Brewery Co. The subpoenas, which were issued Monday, seek information about the companies’ television advertising campaigns for alcoholic products, sources at both companies confirmed.
The FTC investigation will attempt to determine if the companies are targeting underage children through their advertising campaigns. The subpoenas have been expected since it was first revealed last week that the FTC was planning to investigate both companies. The FTC has refused to confirm that it is conducting the investigation.
The subpoenas follow the decision by the Distilled Spirits Council of the United States (Discus) decision last month to abandon its 50-year-old voluntary ban on radio and TV advertising. Discus said its members, which include Seagram and other hard alcohol producers, decided to end the ban because they had watched too much of their market share erode in favor of the beer and wine industry. Beer and wine never voluntarily abstained from broadcast advertising. As a whole, beer and wine companies spend more than $600 million a year on TV advertising.
Sources said the FTC has asked Stroh and Seagram for copies of the commercials and demographic information about their target audience. The FCC is still waiting for Discus to answer a similar, but informal request for the same information. A spokesman for Discus said yesterday that the trade group is still working on its reply.
When Discus announced it was dropping the ban, several industry observers predicted that the hard liquor industry was intent on either gaining access to the airwaves or blocking access for the beer and wine industry.