Jul 16, 2009 at 05:39 PM
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An End to Alcohol Sponsorships?

The social costs of alcohol in Australia are approximately $15.3 billion according to a recent report commissioned by prime minister Kevin Rudd. Now his National Preventative Health Taskforce is out to do something about it.

Today the taskforce announced that it will recommend a complete ban on alcohol sponsorship of sporting events. If approved, the move could cost cricket, rugby and other sporting interests up to $300 million a year in sponsorships.

The Australian bill proposes stricter regulation to be imposed over a period of time in order to allow properties the opportunity to attract other sources of sponsorship revenue.

In the U.S., advertising of alcohol is largely up to the property's discretion. Unlike tobacco, which was regulated off of TV, the alcohol industry has largely avoided regulation because of a proactive stance towards self-regulation. One of the key benchmarks in place is that 70% of an audience for any alcohol-related media must be above the legal drinking age of 21. Is this good enough? That's a matter of opinion.

Just last month the Federal Trade Commission released a report that broke down the marketing spend of 12 major alcohol suppliers. The study found that "42 percent of such expenditures are used for traditional television, radio, print, and outdoor advertising; about 40 percent are used to help wholesalers and retailers promote alcohol; about 16 percent are used for sponsorships; and two percent are directed to other efforts, such as Internet and digital advertising." Some estimates peg overall advertising and promotion spending among alcohol companies at between $6-8 billion per year.

Some countries have found middle ground between the two regulatory philosophies. For instance, in France the European Rugby Cup, which is title sponsored by Heineken, is simply known as H-Cup because of advertising restrictions.

If Australia's new proposition passes, don't expect the U.S. to follow their lead on this anytime soon. The alcohol category is too critical to powerful media interests within the U.S., a generally more participatory regulatory environment. That doesn't mean stricter regulations will never be imposed, but a complete ban seems very unlikely in the near future.

photo cred: via flickr aaardvaark