FTC's Stroh probe unlikely to trigger larger query

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A pending Federal Trade Commission investigation of Stroh Brewery Co. stems from an isolated incident and likely does not signal a broader inquiry into malt liquor or beer advertising, according to those familiar with the inquiry.

The FTC subpoenaed Stroh, along with spirits marketer Seagram Americas, for detailed creative, placement and target-demographic information on their broadcast ads (AA, Dec. 2). The commission wants to determine the reach and possible effects of those alcohol ads on youngsters.


The Stroh investigation specifically targets Schlitz Malt Liquor and stems from a placement snafu in which a Schlitz spot mistakenly aired on the July 6 episode of "My So-Called Life," a drama on MTV that targets teen girls, according to George Kuehn, general counsel for the No. 4 brewer.

The Stroh subpoena asks for information on all TV and radio ads for the brand since June 1. The FTC is said to be checking that Stroh's "mistake" wasn't repeated.

Mr. Kuehn said the incident was isolated and that the ad ran without approval from Schlitz' agency, Burrell Communications, Chicago. He added that no Schlitz spots are currently on MTV.

Beer industry observers feared the Stroh subpoena could eventually drag beer marketers into the liquor ad controversy and possibly ignite across-the-board restrictions. But FTC's silence in issuing the subpoenas suggests a limited scope. The commission generally announces industrywide probes.

The investigation of Seagram apparently targets a Crown Royal spot by Grey Advertising, New York, that uses a dog in its creative. Pets and cartoons are precarious for liquor marketers because of their appeal to children.


Seagram confirmed it received the subpoena, but refused to disclose exactly what information the FTC wanted. "We have every intention to cooperate fully with the FTC to show them that our ads are entirely appropriate," said a Seagram spokeswoman.

Mr. Kuehn said the FTC contacted Stroh immediately after the MTV incident and that the brewer has already provided much of the requested information. "We explained everything to the FTC in July ... we thought it was the end of the inquiry."

But political fallout from the decision by the Distilled Spirits Council of the U.S. to lift its broadcast ban has intensified scrutiny.

"We were in the wrong place at the wrong time," Mr. Kuehn said. "There is a perceived political need to take some action with respect to the DISCUS decision, and Stroh was there as a result of the prior inquiry."


Federal Communications Commission Chairman Reed Hundt continues to try to rally support from other commissioners to launch a formal investigation. His effort has been supported by a bi-partisan request from 26 members of Congress and a formal petition from the State of Alaska to ban broadcast liquor ads.

The Center for Science in the Public Interest has filed a petition with the FTC asking it to take action on TV beer advertising it claims targets adolescents. The advocacy group also recently urged liquor control directors of 17 states to refuse to stock hard spirits that advertise on TV and radio.

"Unquestionably there is more attention being paid to alcohol in many places as a result of liquor advertising on TV and radio," said George Hacker, CSPI's director of alcohol policies. "Whether it will translate into near-term action on issues is really the question."

Contributing: Ira Teinowitz.

Copyright December 1996, Crain Communications Inc.

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