Advertising and Consumption of Alcoholic Beverages

Abstract

After a nearly 50‐year voluntary ban, broadcast advertising of distilled spirits was introduced in the United States in 1996. The decision appears to be a response to broadcast advertising expenditures on beer and wine and to the steady decline in the consumption of distilled spirits. Lifting the ban may result in the increased advertising of distilled spirits. Such advertising has been referred to as a political time bomb. Using historical industry data, I tested several related issues including the following: Do increases in beer and spirits advertising expenditures influence the share of distilled spirits consumption? Are such advertising expenditure increases associated with increases in absolute alcohol consumption? The findings of the study support the concerns of both distilled spirits marketing executives and public policymakers. For example, using shares of hard liquor and beer advertising to predict absolute alcohol consumed via spirits indicated significant influences: A 0.15% increase in absolute alcohol consumption was associated with a 1% share increase in hard liquor advertising, and a 0.25% decrease in absolute alcohol consumption was associated with a 1 % share increase in beer advertising (adjusted R2 = .93). The conclusions include specific suggestions to both hard liquor advertisers and policymakers.

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