How to Kill Your Own Drinks Industry in 5 Steps

Perhaps taking inspiration from the temperance movement, which began in Dundee with the foundation of the Prohibition Party and subsequent election of its only MP in 1922 – Edward Scrymgeour – the Scottish Government has recently released (November 2022) a new consultation on proposed alcohol advertising and promotion restrictions which if enacted in full, would significantly hamper its own business success story, the Scottish drinks industry .

For more information – click here to access the Scottish Government’s consultation on Alcohol Advertising and Promotion (closing for submissions on 9th March 2023)

How to Kill Your Own Drinks Industry in 5 Steps

Step 1 – Limit Instore Alcohol Marketing

Step 2 – Prohibit Sports and Events Sponsorship

Step 3 – Restrict Brand sharing and merchandise including on No & Lo Alcohol

Step 4 – Remove Promotion and Advertising of Alcohol in Public Spaces

Step 5 – Control Traditional Media (TV, Radio and Print) and Online Advertising with restrictions on content

Stephen McGowan from law firm TLT has written an excellent review of the consultation document – click here for the link – commenting that these would become, if enacted, the most significant restrictions ever to have been placed on the alcohol and retail industries in Scotland.

“The level of prohibition proposed goes further than anything ever seen before, and is more restrictive than even the temperance legislation of the late 19th and early 20th centuries.” Stephen McGowan, TLT

The legislation is being proposed as a way to reduce and prevent alcohol-related harm with heavy drinkers and to protect children and young people. This is a potential approach that seems to ignore the fact that the vast majority of the population in Scotland consumes alcohol moderately and within the Chief Medical Officer (CMO)’s guidelines, whilst only 3% correspond to the highest harm drinkers.

“The majority of adults in Scotland are moderate or non-drinkers and it is encouraging that binge drinking, alcohol-related crime and underage drinking have all significantly declined.” Matt Lambert, CEO of the Portman Group

The most recent trend amongst young adults (aged 16-24) in Scotland shows a move towards more moderate consumption.

For some more facts, look at the Portman Group Scotland Alcohol Factsheet 2022

“The Scottish Government’s plan risk punishing local producers and the vast majority of people who consume alcohol responsibly instead of targeting intervention and help to those suffering from alcohol dependency.” Stuart McMahon, CAMRA Scotland Director

How to Kill Your Own Drinks Industry in 5 Steps

Step 1 – Limit Instore Alcohol Marketing

In this case, “In-store alcohol marketing concerns all the activity that takes place inside a shop or supermarket to increase the visibility and attractiveness of a product to induce sales”.

The potential regulation being considered could include:

• restricting window displays of alcohol,
• restricting the use of mixed alcohol and non-alcohol aisles,
• prohibiting aisle-end displays of alcohol,
• redefining the alcohol display area, and/or
• covering alcohol behind till areas similar to tobacco.

Preventing alcohol brands from displaying their products instore would severely undermine people’s ability to explore and choose different products, including those from smaller producers as there would invariably be restrictions on space with a reduction in the product range. It would be a disproportionate response imposed on the vast majority of moderate drinkers in Scotland.

Step 2 – Prohibit Sports and Events Sponsorship

The potential regulation being proposed would include the prohibition of alcohol-branded sports merchandise, including sponsorship on replica kits, and other types of sponsorship. Stopping alcohol sponsorship of events at which children may be present is also being considered, including the accreditation of ‘family-friendly’ venues with alcohol sales restrictions.

This seems to ignore the role that local bars and pubs, breweries and distilleries play within the local communities across Scotland, bringing people together and supporting local charities and grassroots sports, which would be severely restricted if this was to be enacted.

Alcohol sponsorships could also be looked at more positively, aside from just helping to subsidise the cost to consumers of non-sport events, such as music festivals, or to support the general sport industry within Scotland. It can also be a potential tool, a conduit for education on alcohol consumption. For example, some drinks brands are already using this platform to communicate their No & Low Alcohol products (such as Guinness 0.0% within the Six Nations rugby internationals) offering alcohol free alternatives to consumers to help integrate these products into their consumption repertoire.

“The proposed legislation would be making it much harder for small producers and retailers to function, and the potential consequences for hospitality, culture and tourism are huge.” James Porteous, Director and Distiller at Electric Spirit Co. (as seen on Twitter)

Step 3 – Restrict Brand sharing and merchandise including on No & Lo Alcohol

“Brand-sharing in the alcohol context means using a brand, primarily known as an alcohol brand, on products which are not alcoholic drinks. This often involves use of the brand name, insignia, logos, colours or other identifiable markings of that brand.”

Shoppers that consume the drinks brands on a moderate basis – the majority of the population – are the most likely to be followers of specific brands and thus, have an interest in alcohol branded merchandise or products associated with alcohol brands. Heavier drinkers are more likely to be interested in the alcohol itself at the most accessible price possible, rather than merchandise.

This just seem to be a level of restriction and control that goes beyond what is required across the general population.

“No more branded glencairn glasses. No more branded woolly hats. No more branded *anything* at distillery visitors centres. In 2018, there were 2m visitors at whisky distilleries in Scotland who spent over £68.3m. These are world-class visitor experiences we are talking about.” Blair Bowman, Whisky Consultant (as seen on Twitter)

“All alcohol products ‘are essentially the same thing’ if you remove marketing” according to these proposals. This ignorance is astounding.” says Blair

The Scottish Government is even looking to restrict alcohol free brands as these could act as “gateway brands” to alcohol. The reality is that the No & Low alcohol category is developing suitable alternatives of high quality and the number of brands entering this sub-category is growing exponentially. The Scottish Government should be encouraging this sub-category both in the On Trade and Off trade channels, as increasing availability of No & Low products and formats (such as No & Low draught beer across pubs and bars) is likely to increase the number of consumers adding it into their repertoire, thus reducing consumption of alcohol, as seen in countries such as Spain, Sweden and Germany where the alcohol free segment has grown significantly.

For reference – ‘The State of the Lo & No Alcohol Nation’ on Inside the Cask

Step 4 – Remove Promotion and Advertising of Alcohol in Public Spaces

“The current self-regulatory Codes governing outdoor alcohol marketing are largely permissive of outdoor and public spaces advertising.Outdoor marketing can reach large numbers of the population, which includes children and young people as well as those in recovery.”

The suggestion here is that “a prohibition of alcohol advertising in public spaces may be the best course of action given the difficulties around defining places as places children and young people frequent, as well as the likely impact of alcohol marketing on adults too.”

This is in effect a blanket ban on on all public spaces for Alcoholic brands.

“The Scottish government has been bewitched by the temperance lobby. After the disastrous failure of minimum pricing, it is doubling down with an extreme clamp-down on alcohol marketing.” Christopher Snowdon, Head of Lifestyle Economics at free market think tank the Institute of Economic Affairs (IEA)

Christopher also states “Since the Scottish government doesn’t have the power to ban TV and digital adverts, it will be domestic culture, media and sport that will pay the price. Scottish newspapers, sports teams and events like the Edinburgh Festival will see their revenues shrink.”

Step 5 – Control Traditional Media (TV, Radio and Print) and Online Advertising with restrictions on content

On this final step, the potential proposals from the Scottish Government involve in effect the eradication of alcoholic brands from traditional media and online advertising as “by removing the attractiveness of alcohol in the advertising we begin to change the culture around alcohol.”

Finland is cited as an example, however this is a completely different market to Scotland and definitely not the right comparison set as the Finnish Government act as a state-owned monopoly for the sale of alcohol (only ‘Alko’ is allowed to sell beverages stronger than 5.5% vol. beer and alcohol) similar to other Nordic countries, such as Sweden and Norway. This ‘restriction’ instigates a change of behaviour in the population, although from my own experience, maybe not the one that the Scottish government seems to be aiming at, whereby the Finns look for drinks to purchase and consume both when travelling (whether on holiday or travelling via its borders) or at home with stock purchased abroad.

For example, there are people that will take the ferry from Finland to Estonia or even Latvia, fill their car with alcoholic products and bring it back home on the same day to bypass the national controls in place (or pay someone to do it for them). A one-way trip from Helsinki to Tallinn typically only costs between 10 and 30 euros, depending on the vessel, the type of the trip and the time of the day. It is no surprise then that pre-COVID, about 15 per cent of all alcohol consumed by Finns was bought abroad.

“For some of our customers, the price difference between Finland and the Baltic countries is surely the reason why they want to go on a cruise or to the Baltics,” Armi Kallio, from ferry line Tallink Silja

Cinemas are also being considered in the proposals however these are already controlled and people looking to watch movies on the big screen have to be age appropriate, therefore advertising will be accessible only to the right audiences via movie ratings. There is no need for further controls to be put in place relating to alcohol advertising.

The COVID pandemic has also seen an increase in the share of the population being online and using the internet, including for the purchase of alcohol with an ever increasing amount of research being undertaken by consumers for more information on alcohol brands, their production methods, sustainability credentials and provenance. This in turn has led to more consumers supporting the local drinks industry in Scotland, including those smaller companies who can find it difficult to secure share of voice through traditional media. Restricting alcohol branded social media channels would remove this opportunity for growth and exposure to the right audiences for these companies.

Additionally, the use of online tools such as social media to engage with alcohol can be positive, as it allows consumers to discover quality premium brands and reduce overall consumption as a result (i.e. focus on quality over quantity). Otherwise, the risk will be that these restrictions would add more admin, reduce sales opportunities and increase costs at a time when the economy is under pressure and the number of small alcohol producers and hospitality/ Food & Beverage operators are reducing with an increased number of closures and job losses.

For reference – ‘Drinks businesses gone into administration in 2022’ on Inside the Cask

“The thread through all of these proposals is the depersonalisation of products, discounting centuries of craft and enterprise, and an assumption that alcohol is inherently bad.” Stephen McGowan, TLT

These proposals, shared as part of the Scottish Government’s consultation process, have an inherent anti-alcohol and negative approach towards an industry that has been a success story at home and abroad, with an increasing number of moderate consumers within Scottish society. It almost feels like it would be the second stage before we see alcoholic products being sold behind restricted displays instore with plain packaging on the bottles, such as the ones picture above.

In my personal view, the Scottish Government should be more focused on improving its existing services to the population, whilst acting positively by working hand in hand with the alcohol industry to reduce harmful alcohol consumption, educate consumers and improve alternative choices for drinkers.

One such way would be for the Scottish Government to view the No & Low Alcohol category not as a ‘gateway’ to alcohol but rather as a product that can positively impact consumers overall consumption through moderation. An increase in the choice and distribution of No & Low alcohol across the On and Off Trade should be seen as a positive step.

Additionally, the Scottish Government should be more supportive of local products and smaller companies within the industry who would be disproportionally affected if these restrictions were to be implemented. The result would be for choice to be reduced and for the larger companies to grow even larger still with reduced choice for Scottish consumers.

I’d like to also see more support for Scotland’s drinks industry both within Scotland and abroad via exports, as this benefits our economy through a positive economic contribution. Most drinks companies in Scotland are small producers and their products are focused on quality and provenance, rather than over-consumption.

Let’s look forward to the future with new ideas rather than back to a temperance movement that failed to recognise the positive contribution to society that moderate alcohol consumption can provide…