The United States Federal Trade Commission (FTC) issued the warnings over deceptive marketing practices to a large, diverse group of companies – notably many alcohol producers were among the corporations put on notice.
Troutman Pepper reports that the FTC issued the Notice of Penalty Offenses to be able to seek civil penalties in the future if the companies engage in deceptive practices. The potential civil penalties are severe, costing up to $43,792 per violation.
With this type of notice, the FTC warns companies not to engage in what it considers “unfair” or “deceptive” trade practices, according to Troutman Pepper.
The press release addresses harmful practices, such as fake reviews and other forms of deceptive endorsements. The FTC warned companies against cheating consumers and undercutting honest businesses. The FTC threatened that advertisers would pay a price if they engaged in deceptive practices.
The FTC explained that the rise of social media had blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace.
- Anheuser-Busch Companies LLC,
- Bacardi U.S.A., Inc.,
- Beam Suntory, Inc.,
- Brown-Forman Corp.,
- Constellation Brands, Inc.,
- Coors Brewing Company,
- Craft Brew Alliance,
- Diageo North America, Inc.,
- Elysian Brewing Company Inc.,
- Heineken USA, Inc.,
- Lagunitas Brewing Company,
- LVMH Moet Hennessy Louis Vuitton, Inc.,
- Mark Anthony Brewing Inc.,
- Molson Coors Beverage Co.,
- Pabst Brewing Co.,
- Pernod Ricard Kenwood Holding LLC,
- Pernod Ricard USA, LLC,
- The Absolut Spirits Company, LLC,
- The Absolut Spirits Co., Inc.,
- The Boston Beer Co., Inc.,
- The Miller Brewing Company,
- United Distillers Manufacturing Inc.
The FTC breaks down unfair and deceptive trade practices into broad categories:
- falsely claiming an endorsement by a third party;
- misrepresenting whether an endorser is an actual, current, or recent user;
- using an endorsement to make deceptive performance claims;
- failing to disclose an unexpected material connection with an endorser; and
- misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.
The Federal Trade Commission is blanketing industry with a clear message that, if they use endorsements to deceive consumers, the FTC will be ready to hold them responsible with every tool at its disposal.”FTC Press Release, October 13, 2021
The FTC also cautions that recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct.
Concerns about Big Alcohol marketing
According to Troutman Pepper, the FTC’s warnings raise the concerns of what is acceptable practice in alcohol advertising, especially given the rise in use of social media and digital marketing.
The Federal Trade Commission is a government agency working to promote competition, stop deceptive and unfair business practices and scams, and educate consumers.
At the federal level, three key agencies regulate alcohol advertising: the Alcohol and Tobacco Tax and Trade Bureau (TTB), the U.S. Food and Drug Administration (FDA), and the FTC.
In addition to federal law and guidance, state law also governs alcohol marketing. And alcohol industry self-regulation is also still allowed, despite overwhelming evidence of its counter-productive effects.