ATF Ruling 95-2
The Bureau of Alcohol, Tobacco and Firearms (ATF) has been asked for its interpretation of relevant law and regulations regarding the depiction of athletes, athletic activities or events and motor vehicles in the labeling and advertising of alcoholic beverages.
In recent years, ATF has received numerous inquiries regarding the appearance of or reference to athletes, athletic activities or events, and motor vehicles on labels and in advertisements of alcoholic beverages. In particular, concern has surfaced as to the circumstances in which these depictions are permissible.
During the 1980's, significant concern was expressed regarding the circumstances in which ATF would permit the depiction of athletes or athletic themes in labeling and advertising of alcoholic beverages. In more recent years, ATF has seen an increase in both the number of applications for approval of labels with athletic themes and the types of athletic activities depicted in labels and advertisements.
Pursuant to the labeling provisions of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), ATF has authority to regulate the labeling of alcoholic beverages to prohibit labels which are, among other things, false, deceptive or misleading. Similarly, under section 205(f), ATF has authority to regulate the advertising of alcoholic beverages so as to prohibit advertising which is false, deceptive, or misleading. The regulations implementing sections 205(e) and (f) likewise prohibit any statement that is false or untrue in any material particular, or that, irrespective of falsity, tends to create a misleading impression. 27 C.F.R. 4.39 and 4.64 (labeling and advertising wine), 5.42 and 5.65 (labeling and advertising distilled spirits), and 7.29 and 7.54 (labeling and advertising malt beverages).
ATF is neither a health nor a social service agency. To prohibit a label or advertisement based solely upon social responsibility or the possible impact on youth, without the "false and misleading impression" relationship, is beyond the scope of ATF's statutory authority. Therefore, for ATF to take action against a label or advertisement which is "socially irresponsible," it must be shown that the label or advertisement in question is false, deceptive, misleading, or conveys an erroneous impression.
In determining whether a label or advertisement is deceptive or misleading, ATF considers representations made or suggested by statement, word, design, device, sound or any combination thereof. ATF also considers the extent to which the label or advertisement fails to reveal facts which are material in light of such representations regarding the consequences which may result from consuming the alcoholic beverage under the conditions reflected in the label or advertisement, or under such conditions as are customary or usual.
A review of the legislative history of the FAA Act reveals that the purpose underlying the labeling and advertising provisions was to provide for flexibility in regulating the labeling and advertising of alcoholic beverages so that the regulating body could make such changes as became necessary over time. See Hearings on H.R. 8539 before the Committee on Ways and Means, House of Representatives, 74th Cong., 1st Sess. 10 (1935). Moreover, the legislative history indicates that the regulations were not intended to be confined to prohibitions of falsity but "were intended to insure that the purchaser should get what he thought he was getting, that representations both in labels and in advertising should be honest and straightforward and truthful." Id.
ATF has historically taken the position that the depiction of athletes on alcoholic beverage labels and advertising is often deceptive and misleading in that it implies that consuming alcohol is conducive to athletic skill or physical prowess, or that consuming alcohol does not hinder the athlete's performance. Under Rev. Rul. 54-513, (1954-2 C.B. 593) the appearance of certain illustrations of prominent athletes consuming or preparing to consume the advertised alcoholic beverage is prohibited. Under the provisions of Rev. Rul. 54-326 (1954-2 C.B. 591), athletic events may not be depicted when the participants are shown consuming, or preparing to consume, alcoholic beverages. In addition, in ATF Rul. 75-5, 1975 ATF C.B. 45, it was held that depictions of individual athletes of public prominence (locally or nationally) or liquor bottles or the labels on such bottles are misleading, in that they convey the erroneous impression that the consumption of the product contained therein is conducive to the development of athletic prowess or success in a particular athletic endeavor.
Moreover, Congress has shown continued concern over the health hazards that may result from the consumption or abuse of alcoholic beverages as demonstrated by the enactment of the Alcoholic Beverage Labeling Act of 1988 (ABLA), 27 U.S.C. 211-219a. In the ABLA, Congress emphasized the necessity of providing information to the American public about the health hazards that may result from the consumption or abuse of alcoholic beverages. Congress determined that it would be beneficial to provide a clear, nonconfusing reminder of such hazards and that a need existed for national uniformity on such reminders in order to avoid the promulgation of incorrect or misleading information. Congress found that requiring such reminders on all containers of alcoholic beverages is appropriate and necessary in view of the substantial role of the Federal Government in promoting the health and safety of the public. See 27 U.S.C. 213.
The various components of the alcoholic beverage industry have adopted their own set of voluntary guidelines which impact the use of or depiction of athletes on labels or in advertisements of alcoholic beverages. These guidelines urge the responsible portrayal of alcoholic beverages and discourage any advertising or marketing materials which associate or portray the consumption of alcoholic beverages before or during activities in situations which require a high degree of alertness or coordination. The guidelines also discourage advertising and marketing intended to appeal primarily to persons below the legal purchase age.
ATF shares the concern of industry and the public that alcoholic beverages be consumed responsibly and appropriately and that the labeling and advertising portray the products in a responsible manner. In view of these concerns, ATF has attempted to more clearly address what it considers permissible labeling and advertising conduct insofar as such conduct falls within the confines of our statutory authority.
Held, ATF will not automatically consider deceptive or misleading each depiction of or reference to athletes, athletic activities or events, or motor vehicles used in alcoholic beverage labeling or advertising. ATF recognizes that some such depictions or references may appear on labels and in advertisements without being deceptive or misleading. Each such depiction or reference will be reviewed on a case-by-case basis to determine whether it is deceptive or misleading.
In reviewing labels and advertisements, ATF will base its conclusions on the totality of the message conveyed by the label or advertisement. ATF will not prohibit the mere appearance of athletes in labels or advertisements; rather, ATF will examine labels and advertisements in their entirety to determine whether the message conveyed in relation to the appearance of the athlete is deceptive or misleading. ATF is particularly sensitive to the influence athletes are known to have on youth as role models. This is particularly the case where active or recently retired athletes are concerned. Athletes, as role models, set a standard of conduct commonly emulated by youth who aspire to gain talent, success, and/or fame on a level comparable to the athlete's. ATF is concerned that the appearance of an athlete in a label or advertisement not convey a misleading impression to youth.
ATF recognizes that younger people (i.e., those below the legal age for purchase of alcoholic beverages) may be more susceptible to being misled by certain types of labels or advertisements than mature adults. In reviewing labels and advertisements containing references to athletes, athletic activities or events, or motor vehicles, ATF will be especially sensitive to whether such labels and advertisements would be likely to deceive or mislead youth to conclude or believe that consumption of an alcoholic beverage will increase their athletic prowess, enable them to perform at a level comparable to that of a famous athlete or, conversely, likely deceive or mislead youth to believe that such consumption will not inhibit athletic performance. ATF will be equally sensitive to labels and advertisements that would be likely to deceive or mislead youth to conclude or believe that consumption of an alcoholic beverage will enable them to safely operate a motor vehicle or other machinery or equipment.
Accordingly, ATF offers the following examples of labels or advertisements which it considers to be unacceptable pursuant to sections 205(e) and (f) and implementing regulations:
(1) any label or advertisement which states that consumption of the alcoholic beverage will enhance athletic prowess, performance at athletic activities or events, health or conditioning;
(2) any label or advertisement which depicts any individual (famous athlete or otherwise) consuming or about to consume an alcoholic beverage prior to or during an athletic activity or event;
(3) any label or advertisement depicting consumption of an alcoholic beverage while the party consuming the beverage is seated in, about to enter, operating, or about to operate automobiles or other machinery.
Conversely, labels or advertisements which ATF generally finds acceptable pursuant to sections 205(e) and (f) and implementing regulations, so long as they do not contravene the above-mentioned principles and examples, include the following:
(1) depictions of or references to athletes, including famous athletes, whether in motion or not and whether in uniform or not;
(2) depictions of or references to motor vehicles or other machinery or equipment, whether in motion or not, whether occupied by a driver or not;
(3) team logos;
(4) schedules of athletic events; or
(5) depictions of, references to or commemorations of specific events (e.g., an automobile race), specific cars or other equipment, such as hockey sticks, footballs, golf clubs, and the like, on alcoholic beverage labels or advertisements.
All depictions of athletes and athletic events will be reviewed, however, on a case-by-case basis for a determination as to whether the particular depiction is deceptive or misleading, based upon the totality of the message. ATF will not approve applications for labels found to be deceptive or misleading and will initiate appropriate action against such labels and advertisements if they appear in the marketplace.
As a final matter, ATF does not find acceptable the use of disclaimers to negate deceptive or misleading inferences in the labeling and advertising of alcoholic beverages.
ATF Ruling 75-5 is hereby superseded.
27 U.S.C. 205(e); 27 CFR 4.39; 27 CFR 4.64; 27 CFR 5.42; 27 CFR 5.65; 27 CFR 7.29; 27 CFR 7.54