All Commentary
Thursday, October 1, 1992

The Marketplace Relies Upon Commercial Free Speech

The government is waging war against alcohol labeling and advertising.

Jonathan H. Adler is a policy analyst at the Competitive Enterprise Institute.

While flipping through the pages of one’s favorite magazine, one is likely to come across an advertisement for a popular brand of cigarettes—Marlboro, Salem, or perhaps the irrepressible Camel. By law, each of these advertisements must carry a warning to the effect that smoking is hazardous to one’s health. Should Senator Strom Thurmond have his way, the same labels may be found in advertisements for alcohol. Not content with the labels that are currently affixed to each and every bottle of spirits, many senators wish to see these warnings placed on billboards and television spots as well: “WARNING: It’s against the law to purchase alcohol for persons under age 21”; “WARNING: Drinking alcohol may become addictive”; and several others authored by the federal government.


The Regulation of Speech

While Senator Thurmond maintains that “warnings represent one important step in educating the consumer on the potential hazards of alcohol consumption,” polls demonstrate conclusively that the vast majority—consistently over 95 percent—of consumers of alcoholic products are fully aware of the potential dangers of alcohol. In fact, were it not for many of alcohol’s effects, the popularity of its consumption would be greatly diminished. From champagne at New Year’s to an ice cold beer at the ball game, the regular consumption of alcohol is a staple of American life. For myriad reasons, millions of Americans feel that the risks posed by alcohol consumption are outweighed by the immediate pleasures it provides.

Nonetheless, the Senate is moving to force new warnings upon alcohol producers, and the Surgeon General has begun to wage war against those alcohol advertisements officially deemed unacceptable for viewing by the general public. Such was the case with “Powermaster,” a malt liquor which was pulled from the shelves because of a federal prohibition against the advertising of an alcoholic beverage’s potency. That its name was truthful was not enough; it had to be “commercially correct” by government standards as well. A similar regulation prevents the sellers of many products—from alcohol to aspirin—from advertising that moderate consumption of their goods can result in improved health.

Another recent victim of the government’s assault on the advertising of alcohol is “Black Death,” a brand of vodka that is imported from Belgium. This time the charge, leveled by the Bureau of Alcohol, Tobacco, and Firearms (BATF), is that its name and label—which pictures a smiling, top-hat-wearing skull—was somehow misleading. Concluded BATF, “The impression created . . . is that the product is inherently unsafe for human consumption at any level.” Because this is not the case, federal bureaucrats decided that “the brand name is misleading and is in violation.” Now the vodka will be marketed under the name “Black Hat” with the same packaging and logo. Presumably this will pass muster with the BATF.

Behind all of these government efforts to regulate the display and advertising of alcohol lies the presumption, generally accepted in many legal circles, that there is a valid distinction between commercial and other forms of speech. This distinction, it is presumed, permits governmental regulation of commercial speech that could not be contemplated in other areas.


The First Amendment

Yet to limit the communication of commercial information not only raises serious constitutional concerns, but actually serves to restrict the information upon which consumers in the marketplace typically rely. Even mandated labels act to restrict information by compelling the use of the limited space available for communicating government-preferred information. Lite Beer may have to devote five or ten seconds of a paid 30-second ad to the government-mandated warning. This proposed policy is not an attempt to educate an ignorant public on the dangers of alcohol, “but an attempt to conscript advertisers’ private property as ‘mobile billboards’ for an already widely known message deemed useful by the state,” notes New York University Law Professor Burt Neuborne.

Ironically, alcohol labels would be required to carry warnings, yet they are prohibited from advertising their potency. Even accepting current Supreme Court precedents on compelled commercial speech, such actions are legally valid only if used to prevent deception. The American people are not being deceived about alcohol; they merely are unconcerned with its risks.

“If the majority can manipulate the market by interfering with the free flow of economic information, consumer capitalism is threatened,” notes Neuborne. The marketplace, whether of products or ideas, is predicated upon the distribution of information. Limiting speech, even through the use of compulsory labels, challenges the flow of that information, and is therefore a threat to the free exchange upon which the market relies. In the words of John Adams, to protect the political and economic institutions upon which a free society is based, “let every sluice of knowledge be opened and set a-flowing.” Then we may all choose to take a drink.

  • Jonathan H. Adler is the inaugural Johan Verheij Memorial Professor of Law and Director of the Center for Business Law and Regulation at Case Western University School of Law. He teaches teaches constitutional, administrative, and environmental law.