Alcohol control risk to reputation

Calls for increased alcohol restrictions have been growing in Europe and the US over the past year. Alcohol is increasingly being viewed as a drug that needs to be controlled in a similar manner to tobacco. The reaction of the beverage industry to calls for more restrictions has been understandably hostile. Conspicuous hostility has its pitfalls, however, with the danger of a backlash to industry lobbying ever present. Such fallout represents a significant reputational risk for the sector.

In several countries and regions around the world, governments, both local and national, as well as NGOs and health professionals have been pushing for greater restrictions on alcohol consumption. NGOs in the US, including Alcohol Justice, have been arguing for controls on alcohol advertising. Similarly, Ireland is in the process of banning alcohol sponsorship of sports events. In the UK, Newcastle city council recently introduced a local levy on late night licensed venues to contribute to the social externalities of alcohol sales.

These types of changes have the potential to negatively impact all companies in the beverage sector. From a reputation perspective, a delicate balance has tended to be needed when lobbying against over-zealous alcohol regulation. Open lobbying against alcohol restrictions has sometimes had the affect of making CSR and other responsible drinking initiatives seem like window dressing. Similarly, marketing campaigns that have seemed to target younger potential drinkers have sometimes elicited negative backlashes. Parallels can be drawn with large companies lobbying in their own interest for special corporate tax arrangements, or exploiting existing loopholes, and the media-led backlash against such special arrangements. Large companies that successfully avoided tax in their own interest were framed in the narrative of austerity cuts hurting society, especially in the UK. Similarly, beverage companies opposing reforms to alcohol sales are likely to have their opposition framed in terms of the damage alcohol can have when misused, and the apparent strain placed on public services, including the police and health services.

The tobacco industry also holds potential lessons for the alcohol companies. Any claims of benefits associated with smoking, or trying to oppose increased restrictions courts a strong negative backlash  from what is a mature anti-tobacco lobby.

A focus on responsible drinking initiatives and self-regulation seems to be the optimum way forward for the alcohol producers. The video games industry quickly instigated self-regulation based on age limits when calls came for restrictions from groups worried about the potential affects of certain games on children. By taking swift action on age restrictions the industry avoided further potential damage and maintained a higher level of autonomy.