Hard alcohol biz tying on more stations

WASHINGTON — FCC Chairman Reed Hundt said Wednesday that he is losing the fight to keep hard alcohol advertising off TV stations.

Less than one year after Corpus Christi’s KRIS aired the first advertisement for Seagram Americas’ Crown Royal whiskey, 50 TV stations are carrying ads for hard liquor products, Hundt told reporters Wednesday. “It is far too many to regard as acceptable,” he said, adding he has “zero tolerance” for such TV advertising.

The National Assn. of Broadcasters may want to create a code that would ban alcohol ads on members’ TV stations, suggested Hundt. During the 1970s, the NAB abandoned its code, which included a ban on alcohol advertising after it was challenged in court on antitrust grounds.

Although Hundt claimed 50 out of 1,500 TV stations are airing the alcohol ads, the FCC has not tracked the hard liquor advertising closely. There are actually only 1,181 commercial TV stations. Hundt got his information from a New York Times article which quoted a “spirits industry executive” estimate that approximately 50 “cable and independent stations” are running the ads.

The major broadcast webs have all said publicly that they will refuse hard liquor ads. Some cable systems, such as Cox Communications, are carrying Seagram ads. Cable’s BET network is also carrying the Seagram ads.

So far, Hundt has had little luck finding the three votes he needs to conduct a full-blown FCC inquiry into broadcast advertising of hard alcohol products. Commissioners Rachelle Chong and James Quello have pointed out that it would be difficult to bar ads for hard alcohol while the beer and wine industries spend $600 million annually for radio and TV commercial time.

Hard alcohol companies had voluntarily refrained from advertising on radio and TV for almost 50 years, but dropped their self-imposed ban last year. Chong and Quello also argue that the FCC has no authority to regulate advertising, which they say falls under the Federal Trade Commission’s jurisdiction.

The FTC is currently investigating the advertising practices of Seagram and Stroh Brewing Co. Sources say federal regulators are looking into allegations that the companies are illegally targeting underage drinkers through their advertising.

The Distilled Spirits Council of the U.S., which represents the largest hard alcohol companies, is planning a mailing to broadcasters, urging them to ignore Hundt. The packet will include several statements from both Chong and Quello which expressed their view that the FCC lacks the authority to regulate advertising.

The Senate Commerce Communications subcommittee plans to hold a hearing on the issue sometime later this spring.

In a victory for the beer and wine industry, an aide to Communications Subcommittee chairman Conrad Burns (R-Mont. ) confirmed Wednesday that the hearing will focus on Seagram’s decision to advertise on television. The aide said there are currently no plans to call witnesses from the beer and wine industry, which fears that Congress may include them in any proposal to limit alcohol advertising.

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