[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Notices]
[Pages 43181-43182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21612]


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FEDERAL TRADE COMMISSION

[File No. 982-3092]


Beck's North America, Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practice or unfair methods of competition. The attached Analysis to Aid 
Public Comment describes both the allegations in the draft complaint 
that accompanies the consent agreement and the terms of the consent 
order--embodied in the consent agreement--that would settle these 
allegations.

DATES: Comments must be received on or before October 13, 1998.

ADDRESSES: Comments should be direced to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Lee Peeler, FTC/S-4002, Washington, D.C. 20580. (202) 326-3090.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for August 6, 1998), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W., 
Washington, D.C. 20580, either in person or by calling (202) 326-3627. 
Public comment is invited. Such comments or views will be considered by 
the Commission and will be available for inspection and copying at its 
principal office in accordance with Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from Beck's North America, 
Inc. (``BNAI''), a Delaware corporation.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    The Commission's complaint in this matter concerns two television 
advertisements for Beck's Beer that depict young adults drinking 
alcohol on a sailing ship, while engaging in activities that allegedly 
pose a substantial risk of injury. BNAI has ceased disseminating the 
ads that are the subject of the complaint.
    The challenged advertisements depict young adults partying and 
drinking beer on a schooner at sea. On the deck of the boat is a large 
bucket of ice, filled with bottles of Beck's Beer. Almost all of the 
passengers are holding bottles of beer, with one male passenger with a 
bottle of beer in hand standing precariously on the bowsprit (a spar 
extending almost horizontally off the bow of the boat), and others 
sitting or leaning on the edge of the bow, where there is no railing.
    Because of the significant risks of drinking while boating, the 
U.S. Coast Guard has recently initiated a public education campaign 
designed to encourage boat operators and passengers to ``boat safe and 
sober.'' In this case, the challenged ads depict individuals combining 
drinking with activities--bowriding and standing on a bowsprit--that 
could constitute negligent boat operation under federal and state

[[Page 43182]]

boating safety statutes. In addition, the advertising is inconsistent 
with the provisions of the Beer Institute Advertising and Marketing 
Code, which provides that ``[b]eer advertising . . . should not portray 
or imply illegal activity of any kind,'' and ``[b]eer advertising . . . 
should not associate or portray beer drinking before or during 
activities which require a high degree of alertness or coordination.''
    Paragraph five of the complaint describes the challenged 
advertisements as depicting individuals drinking Beck's beer while 
engaging in acts that require a high degree of alertness and 
coordination to avoid falling overboard. This conduct is inconsistent 
with the Beer Institute's own Advertising and Marketing Code and may 
also violate federal and state boating safety laws. It alleges that the 
risks associated with such activities while boating are greatly 
increased by consumption of alcohol. It notes that even low and 
moderate blood alcohol levels sufficiently affect coordination and 
balance to place passengers at increased risk of falling overboard and 
drowning, and that many persons are unaware of this increased risk. 
This paragraph also notes that as many as one-half of all boating 
fatalities are alcohol-related, including an average of 60 recreational 
boat fatalities annually from falling overboard while drinking. 
Accordingly, respondent's depiction of this activity in its 
advertisements is likely to cause substantial injury to consumers that 
is not outweighed by countervailing benefits to consumers or 
competition and is not reasonably avoidable by consumers. As a result, 
the complaint alleges that respondent's practice was an unfair act or 
practice.
    The Commission has substantial concern about advertising that 
depicts conduct that poses a high risk to health and safety. As a 
result, the Commission will closely scrutinize such advertisements in 
the future.
    The consent order contains provisions designed to remedy the 
violations charged. Part I of the order prohibits respondent from 
future dissemination of the television advertisements attached to the 
complaint as Exhibits A and B, or of any other advertisement that a) 
depicts a person having consumed or consuming alcohol on a boat while 
engaging in activities that pose a substantial risk of serious injury 
from falling overboard or b) depicts activities that would violate 46 
U.S.C. 2302(c). The cited statute, 46 U.S.C. 2302(c), makes it illegal 
to operate a vessel under the influence of alcohol or illegal drugs.
    The remaining parts of the order contain standard record keeping 
(Part II); order distribution (Part III); notification of corporate 
change (Part IV); compliance report filing (Part V) and sunset (Part 
VI) provisions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not to constitute an official interpretation 
of the agreement and proposed order or to modify in any way their 
terms.

    By direction of the Commission.
Benjamin I. Berman,
Acting Secretary.

Statement of Commissioner Mozelle W. Thompson

    Today, the Commission voted to accept a consent agreement with 
Beck's North America, Inc. (``Beck's'') in File Number 982-3092 on 
grounds that Beck's disseminated or caused to be disseminated unfair 
television advertisements. I joined in that vote. I also believe, 
however, that the advertisements at issue were deceptive. The 
Commission has defined deceptive advertising as ``that which contains a 
representation, omission or practice that is likely to mislead the 
consumer acting reasonably in the circumstances, to the consumer's 
detriment.'' \1\ In my view, the Beck's television advertisements if 
this definition.
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    \1\ See Cliffdale Associates, Inc., 103 F.T.C. 110, 176 (1984) 
Appeal dismissed sub nom., Kovan v. FTC, No. 84-5337 (11th Cir. Oct. 
10, 1984) (Deception Statement).
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    First, I believe the advertisements imply to reasonable targeted 
consumers that consuming alcohol while boating is appropriate and/or 
safe. In fact, the actors begin one advertisement by stating ``Wanna 
have some fun? Mix hot music, cool people, [a] big boat and a great 
German beer.'' Unfortunately, the advertisement does not disclose that 
consuming alcohol while boating poses a heightened danger not only to 
the boat operator, but also to passengers. It also fails to disclose 
that such behavior may violate applicable Federal boating laws.\2\ 
Second, as evidenced by the actors and the language portrayed in the 
advertisement, I believe that the message is targeted at a youthful 
audience. Accordingly, it can be justifiably inferred that a reasonable 
youthful consumer could easily be deceived by not appreciating the 
danger of imitating the behavior featured in the television 
advertisements.
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    \2\ This problem has become so serious that the U.S. Coast Guard 
has recently launched a new campaign to better inform the public of 
the dangers of mixing boating and alcohol.
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    For these reasons, I would find that the Beck's advertisements were 
deceptive as well as unfair under Section 5 of the FTC Act.

[FR Doc. 98-21612 Filed 8-11-98; 8:45 am]
BILLING CODE 6750-01-M