Sober Santa

In the United States, the alcohol industry has self-regulatory bodies that determine appropriate standards of advertising.  Large alcohol companies avoid government regulation by agreeing to abide by a set of strict rules they impose on each other.  One of the largest self-regulating bodies is called DISCUS, The Distilled Spirits Council of the United States.  Their website lists all members which include Bacardi, Moet Hennessy, and Patrón.  The organization represents 70% of all distilled spirit brands sold in the US. 

As a part of my summer internship at a marketing firm, I had to research the rules on alcoholic beverage advertising in the United States.  Their “Code of Responsible Practices” is exhaustive.  I found one rule particularly comical; “Beverage alcohol advertising and marketing materials should not contain the name of or depict Santa Claus.”  No one wants his or her child to see Santa Claus boozing it up on a commercial during family time. 

Alcohol companies are content with society believing these rules are for the “public good.”  However, the Stigler article we read suggests that regulation can be beneficial for already established companies because it strengthens barrier to entry.  If the “Code of Responsible Practices” makes it difficult or near impossible for emerging companies to advertise, then companies will have more difficultly selling their products and entering the market.  Large and previously established companies love these regulations because they reduce competition.  I guess Santa Claus will just have to stick to milk and cookies this Christmas.