Sidney Frank Importing Co. said it won't comply with a National Advertising Review Board ruling to halt ads that use 1998 Beverage Testing Institute data to compare Millennium Import Co.'s Belvedere with its brand. The industry trade panel judged the ads "inaccurate and misleading" because Belvedere has fared better in subsequent Beverage Institute tastings. Millennium filed its case with the National Advertising Division in August 2002; the NARB decision followed an earlier ruling by the National Advertising Division of the Better Business Bureau.
Since 1998 was the last year Grey Goose was tested, Sidney Frank argued that because the Beverage Institute doesn't allow advertisers to use cross-test comparisons,NARB can't dictate that more current Belvedere scores be used in the Grey Goose ads. Sidney Frank said they haven't been invited to test in recent years, a point Millennium's camp disputes.
"Just because they have made a determination we're not bound to follow it," said Lee Einsidler, exec VP-sales and marketing for Sidney Frank. "We're following BTI guidelines that say no commingling and [the NARB] is asking us to violate the BTI guidelines." He added that "if [Belvedere is] concerned about their new rankings, they should go advertise that."
Since New Rochelle, N.Y.-based Sidney Frank told the NARB that it has no intention of complying, the board last week referred the case to the Federal Trade Commission and the Alcohol and Tobacco Tax and Trade Bureau (a spun off unit of the Bureau of Alcohol, Tobacco and Firearms). Now that the case has been referred, Sidney Frank could face stiff penalties, according to Jim Guthrie, president of the National Advertising Review Council, which is the policymaking body over the NAD, NARB and the Children's Advertising Review Unit.
Government referrals aren't something the arbitration bodies face often. Since the formation of the NARB and NAD, 95% of their cases have complied with rulings.
For now, Steve Gill, president of the Millennium, a unit of Minneapolis-based Phillips Beverage Co., is letting the process take its course. "We're playing by the rules and they are not. Their behavior is shameful and it's time somebody stops them."
In this case, time may be on the Sidney Frank side, according to an industry executive knowledgeable about the government processes. "It would be months before anything would happen," the executive said. "If they've got their heels dug in and if they calculated it's in their best interest to drag it out, they can drag it out."