Will spirits follow path of tobacco in labelling?

Politicians, health watchdogs and spirits firms have reached a stalemate with regards to alcohol labelling, but will the industry be forced to follow in the footsteps of tobacco?

The spirits industry has expressed reservations over further proposed statutory changes to labelling

* This article was initially published in the January 2015 issue of The Spirits Business magazine

Arguments around spirits labelling have been bubbling for some time, and have boiled over in recent years as lawmakers ramp up attempts to combat excessive consumption.

In addition, consumers have become increasingly health conscious and demanding of transparency, placing greater pressure on the drinks industry to declare what exactly is in their bottles.

With a reported 3.3 million deaths relating to alcohol misuse across the globe in 2012 (WHO), health lobbyists continue in their campaign urging drinks firms to educate consumers on the risks of alcohol. An obvious and necessary measure, many claim, is to substantially increase the amount of information on labels. Critics argue that current measures are not enough, and voluntary labelling codes should be made statutory.

“The public have the right to know about the harms associated with the products they consume,” says Michael Thorn, chief executive of Australia’s Foundation for Alcohol Research (FARE).

“The very point of warning labels is to alert people to those dangers. “That the industry would cry foul because its sales might suffer, is the very reason why alcohol warning labels must be mandatory and government-led, and makes very clear why the industry’s own voluntary efforts have failed.”

However, spirits marketers argue that they are committed to promoting responsible drinking and that a pervasive trend of premiumisation and “drinking better” means overall volume consumption is in decline. Indeed, according to recent figures released by the British Beer and Pub Association (BBPA), alcohol consumption in the UK – Europe’s binge drinking capital – has dropped 18% in 10 years, hitting a 23-year low overall.

By statute, alcoholic beverages sold in the EU must include the name of the product, its abv, place of origin, and name and address of the European manufacturer or importer on their labels. In 2011, European Parliament adopted a compromise with the Council on its Provision of Food Information to Consumers regulation, which made alcoholic beverages exempt from an obligation to list all ingredients, nutritional information and calories.

However, the European Commission is set to publish a report looking at whether alcoholic beverages should be required to list this information in line with other food and drinks categories. The paper was scheduled to be published in mid-December 2014, but due to internal factors, the Commission had not yet started the report at the time of writing.

In anticipation of the report’s publication, heated debates resurfaced as drinks industry supporters and critics locked horns once again. Click through the following pages to see the main concerns expressed on both sides.

Health warnings

Campaigners have long-urged lawmakers to make explicit health warnings on alcohol labels a mandatory feature. In August this year, the UK’s All-Party Parliamentary Group on Alcohol Misuse proposed that all alcohol products should carry graphic “evidence-based” health warnings similar to those on tobacco packets.

Members of the spirits industry have, however, argued that more stringent labelling laws will not impact excessive consumption. For trade body Spirits Europe, explicit health warnings on labels “fail to induce behavioural change in drinking patterns”, adding that “more sophisticated prevention campaigns” are needed.

Meanwhile, the Scotch Whisky Association (SWA) claims that arguments for alcohol products to carry similar visual warnings as cigarettes are flawed. “Alcohol is not tobacco,” says Rosemary Gallagher, spokesperson for the SWA. “The majority of consumers in the UK drink responsibly and we believe the responsible consumption of alcohol is not incompatible with a healthy lifestyle. Such a measure would therefore be disproportionate.”

Calories and ingredients

Politicians and health experts continue to make a case for listing the calorific content of alcohol. In 2013, British ministers consulted with the drinks industry on the possibility of including calorie information on spirits labels as part of a bid to discourage binge drinking. Such discussions were reignited in October 2014 when the UK’s Royal Society for Public Health (RSPH) urged the drinks industry and newly appointed EU Health Commissioner to implement the measure in order to tackle obesity.

“With two in three adults overweight or obese, and given that adults who drink get approximately 10% of their calories from alcohol, this move could make a major difference to waistlines of the nation,” said Shirley Cramer CBE, chief executive of RSPH. “While we continue to back unit labelling for alcoholic drinks, we believe that many people find calorie labelling easier to translate into their everyday lives.”

Again, the spirits industry is dubious of such proposals. “We’re in favour of the most relevant information being made available, we’re not necessarily in favour of putting everything on the bottle,” Paul Skehan, director general of Spirits Europe, said at a recent summit in Brussels. “If we were to do anything on calories we would need to see a sensible proposal come forward.” Skehan adds that labelling calorie information of spirits could be problematic as the standard “kcal per 100ml” is “misleading” for consumers since it does not match normal liquor serving sizes – the standard measure of which is 25ml.

Marketing

As the craze for authentic, independent brands continues across the globe, there has been a demonstrable influx of spirits marketed as “small-batch”, “hand-crafted” and “artisan”. However, a spate of class action lawsuits have been launched in the US over recent months, with consumers claiming they have been misled by false marketing.

Consumers across multiple US states have sued Tito’s Handmade Vodka – one of the fastest-growing vodka brands in the world – insisting the brand removes the term “handmade” from its labels to “more accurately reflect the product’s attributes”.

Tito Beveridge, founder and master distiller of Tito’s Handmade Vodka, swiftly defended his brand, which exceeds sales of more than 15 million bottles a year. “Here at Tito’s Handmade Vodka, we are proud of our process that focuses on the quality of the product and involvement of human beings,” he said. Beam Suntory’s Maker’s Mark Bourbon was hit with a similar lawsuit in San Diego, which alleged the brand falsely advertises itself as handmade.

Meanwhile, Templeton Rye was accused of committing consumer fraud by misleading consumers into believing it is distilled using a Prohibition-era recipe in Templeton, Iowa, as opposed to at a large distillery in Lawrenceburg, Indiana. The brand quickly agreed to alter its labels to communicate its origins, with its founders stressing that the whiskey may be distilled in Indiana, but it is blended in Iowa.

As such, while spirits brands in the US are required to disclose the name and address of either its distiller or bottler, questions are being asked as to whether this offers enough information to the consumer.

At the time of writing, no new legal precedent had been made with regards to spirits labelling, but with a number of decisions due imminently, the subject is one to watch this year.