It is often said that if alcohol came onto the market today, it would never be legalised. But, like tobacco, the ‘dreaded drink’ is not a new invention. Like it or not, over the millennia alcohol has become an integrated aspect of many different cultures all over the world.
The drinks industry is adamant that the vast majority of consumers use its product sensibly. It is an argument legislators have, mostly, been prepared to accept. And governments take a keen interest in this $600 billion global industry, not least because of its revenue earning potential. Alcohol duty alone added £7.58 billion to the UK Treasury’s coffers in 2003.
But policy makers are coming under increasing pressure from the public health community and consumer groups to adopt a tougher stance on alcohol abuse. Ridding city centres of binge drinkers has become something of a mantra for Blair’s administration. But this is not just a domestic issue. Alcohol-related obesity, underage drinking, alcoholism, and changes in female drinking patterns are raising serious concerns among public health officials – and governments who ultimately pick up the tab – worldwide.
Self-regulation
While legislators deliberate over the best way forward, Allied Domecq is at the forefront of ‘industry’-led efforts to resolve the problem of alcohol abuse. As the world’s second biggest wine and spirits company, with premium brands including Ballantine’s, Beefeater and Malibu, it is in its commercial and reputation interests to have its voice heard on this issue. “We know that the whole industry needs to engage with the public sector to come up with the solutions, we consider that we have something useful to bring to the table”, explains Anjali Radcliffe, group public affairs director for the UK and Europe.
Trying to head off potentially inhibitive, costly and not necessarily effective intervention by government is a well-practised and legitimate business response, free market operators have long argued.
Also characteristic of modern political engagement by the private sector is its insistence on the effectiveness of industry self-regulation or co-regulation. Self-regulation, it is argued, enables business to respond more flexibly in the face of new market developments than is allowed for by the cumbersome mechanisms of external legislation.
The drinks industry is no different in this respect. As Allied Domecq’s public position statement on advertising reads: “Rather than having to wait for legislation to catch up with changing social environment and public perception, self-regulation means the industry can adapt its code quickly and responsively to meet new and emerging public concerns”.
Another argument put forward in favour of self-regulatory codes is that industry can design them in such a way as to be easily incorporated in companies’ existing operational procedures.
Partnership & dialogue
Partnership and constructive dialogue are two other important strands to Allied Domecq’s approach to government relations. For the alcohol industry, combating drink driving provides a classic case study in working collectively across sectors to resolve a pressing social issue. Progress on the issue has come about as the result of consistent and well-funded action and communication over many years from all stakeholders, Anjali argues.
Most recently, Allied Domecq used this model of private-public cooperation to support the UK’s summer clamp down on binge drinking. In support of the government’s nationwide Harm reduction strategy, the company’s community affairs team worked closely with Bristol Council to promote responsible drinking and identify trouble spots in the city. In Horsham, Allied Domecq consulted with local police before running promotions to make sure we weren’t running events where binge drinking was causing difficulties locally. In the US, Allied Domecq funds a ‘cops-in-shops’ scheme, working with local police authorities to prevent teenagers from purchasing alcohol in off-licences.
Unlike many other UK corporations, Allied Domecq does not have much experience working directly with government departments or local government agencies through its community projects. Its two flagship programmes – a pre-employment programme for homeless adults, and an alcohol education facility for young people in Bristol [http://www.at-bristol.org.uk] – are both co-ordinated through the charity sector. That said, Allied Domecq’s community investment activities are well-known within local government in its main UK areas of operation, Bristol and Dumbarton. The homeless employment project, which is run by Tomorrows People and the Salvation Army, also receives matched finance from the European Social Fund.
On the dialogue front, Allied Domecq is planning a major communications drive starting in January 2005. The campaign will include the publication of a series of alcohol policy statements through a revamped website.
Managing government relations
Allied Domecq’s government relations team for the UK and Europe (‘external affairs’ as it is known in-house) is coordinated from its UK headquarters based in Bristol. Anjali works closely with the company’s US team in Washington DC to ensure that the company’s policies remain consistent. The team sits within corporate affairs, which also accommodates the corporate social responsibility (CSR) function. This close organisational proximity allows the company’s CSR activities to feed into its engagement with government, according to Anjali. By the same token, Allied Domecq’s public policy activities influence the policies and strategies of the CSR department.
Allied Domecq relies heavily on trade associations to make its voice heard among policy makers. “Trade associations give critical mass where attention from government to an issue is needed, as well as providing a ‘radar service’ to identify important issues that need industry attention”, Anjali explains.
As well as mainstream trade groups such as the Scotch Whisky Association and the Gin and Vodka Association, the company also works through the UK-based Portman Group on specific social concerns related to the industry. Set up in 1989 by the UK’s leading alcohol producers, the Portman Group supports the efforts of government and others to promote responsible drinking through research, educational materials and campaigns [http://www.portman-group.org.uk]. Allied Domecq is also a member of similar industry-led associations in its other key markets, the Century Council in the US and the Brussels-based Amsterdam Group among the best known.
Independent, balanced analysis has always been an important weapon in an industry’s public policy armoury. Allied Domecq, therefore, joined with other leading drinks companies and public health organisations in 1995 to establish the International Centre for Alcohol Policy [http://www.icap.org]. Based in Washington, ICAP has developed a reputation as a major authority on alcohol policy issues. Recent reports published under the ICAP banner include Alcohol and the workplace, Violence and licensed premises and Drinking Patterns: From Theory to Practice. The organisation also provides a ‘forum for debate’, with members meeting twice a year to discuss emerging issues. Appropriately enough, the topic tabled for ICAP’s latest meeting in October was self-regulation.
Allied Domecq is not averse to making individual representations to parliamentarians and other policy makers apart from its affiliated trade associations when it feels that it can add a different or more progressive perspective on an issue. Anjali cites the company’s Global Marketing Code as one such example. She stresses that Allied Domecq has a policy of not making political payments in the UK or Europe. A similar ban operates in the US, although, like many other US-based companies, Allied Domecq does manage donations to employee political action committees.
Responsible marketing
While the days of “Guinness makes you strong” adverts might be long gone, advertising still remains a touchstone of the responsibility debate for the drinks industry. Alcohol manufacturers contend that there little evidence exists to link advertising with increases in sales, consumption or alcohol-related problems. Many in the public policy arena are more sceptical. Top of their list of concern are children and vulnerable adults.
In keeping with its preference for self-regulation, Allied Domecq has arguably led the way in developing comprehensive internal guidelines on what are and are not acceptable messages for its advertising. In 2002, the company introduced a Global Marketing Code (see factfile) that covers all the 150 plus countries in which it operates. The code applies to all brand advertising and marketing communication, regardless of the medium.
Responsible advertising codes abound, however. A recent survey of European countries, for example, showed that 21 out of 22 have self-regulatory systems that govern alcohol advertising. Regulators are not interested in the quantity of codes, but rather their effectiveness at curbing harmful drinking patterns. Again, scepticism abounds. To quote Allied Domecq’s own chief executive, Philip Bowman: “there is a growing mood that current codes are failing”. In an open letter to the Financial Times, he called for existing codes to have “much firmer application and backup”.
The response from Allied Domecq has been two-fold. Firstly, it is actively pushing the ‘responsible consumption’ message into its advertising, an industry novelty it led on in 2003. Take, for example, the slogan for its the US Markers Mark brand: “We make our bourbon carefully. Please enjoy it that way”. In addition, since 1999 Allied Domecq has been labelling all its spirits brands in the UK with the number of units of alcohol they contain. Scottish and Newcastle announced in November that it would pursue a similar labelling strategy. Both actions by Allied Domecq provide important proof that its code is more than a dead policy document.
The real innovation, however, comes in the shape of the company’s appointment of five independent experts to its Marketing Review Board, which monitors compliance with the company’s own code. The Board meets quarterly to assess all alcohol marketing materials globally across all brands. It also considers complaints and expressions of concern about the company’s advertising from interested parties, including governments. Allied Domecq reports that several advertising campaigns have been pulled or amended as a result of this internal review mechanism.
It is understood that Allied Domecq is the first and only drinks company to have established a third-party review panel of this kind. The company is now in the process of openly urging other drinks manufacturers and marketers to follow suit. It is a model that other sectors, particularly consumer food companies, could also do with learning from.
Whether the UK government makes true its threat to introduce mandatory health warnings on all alcohol products – as is the case in 16 other countries at present, including the US, Brazil and Mexico – may depend on how many heed the call.
Joined up solutions
Asked where she sees the industry’s engagement strategy with government heading and Anjali pushes for more of the same: more joined up thinking, more partnerships, more coordinated cross-sector solutions.
It will not be an easy course, however. Even when industry and government can agree on responsible drinking policy solutions, implementing what is in effect a process of social change is fraught with difficulties. The recent ruling by a Scottish court against Aberdeen city council’s attempt to set minimum alcohol prices on competition grounds shows just how difficult ‘joined-up’ thinking can be in practice.
While business people and government officials are destined to have their differences, Allied Domecq is demonstrating how a company can responsibly seek to engage policy makers on issues of common concern. Its attempt to tackle the issue of responsible drinking by getting its house in order and its message out to the public could just keep the regulators from its door; which, after all, is the end goal of almost every private sector enterprise, however responsible.
Allied Domecq Global Marketing Code- factfile
1) Discourage alcohol misuse
The code requires that advertising should not:
– encourage excessive or irresponsible consumption
– suggest any association with violent, aggressive, dangerous or anti-social behaviour, illegal drugs or drug culture
– show or encourage drinking and driving
– create the impression that drinking alcohol enhances mental or physical performance
– create the impression that drinking leads to social or sexual success
– emphasis high alcoholic strength of drinks as a positive quality
2) Discourage consumption by minors
The code requires that advertising should not:
– be aimed at minors, show consumption by minors, or use ‘heroes’ of minors or depict activities associated with minors
– be placed in media or broadcast programmes directed primarily at minors
– promote brands in any media, events or programmes the majority of whose audience are know to be minorswhere less than 70% of the audience is over the legal purchase age.
3) Encourage moderation
– Since March 2003, Allied Domecq has voluntarily been progressively adding messages to brand advertising and marketing material to remind consumers to drink the product responsibly.
Anjali has responsibility for formulating and implementing the company’s government affairs strategy. Prior to joining Allied Domecq in June 2003, Anjali was assistant vice president for European affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA) in Washington, DC. Anjali works closely with Jan Buckingham, director of group social and environment policy. Jan is responsible for CSR reporting, marketing and alcohol issues. Ben Eavis, meanwhile, manages Allied Domecq’s community involvement activities. Born and raised in Canada, Anjali is a dual citizen of Canada and the United Kingdom.
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