Alcohol Advertising and Regulation of Health Claims Following Outgoing Surgeon General’s Advisory

Overview

As highlighted in our first update discussing the outgoing Surgeon General’s advisory outlining the alleged causal link between alcohol consumption and cancer, the Alcoholic Beverage Labeling Act (ABLA) (27 U.S.C. § 215) requires, in part, the placement of the following warning on all containers of alcoholic beverages:

The ABLA further provides: “No statement relating to alcoholic beverages and health, other than the statement required by section 215 of this title, shall be required under State law to be placed on any container of an alcoholic beverage . . . ” (27 U.S.C. § 216). Emphasizing the level of control that Congress retains over this warning, the ABLA allows parties outside of Congress to propose changes to the health warning statement only after an “appropriate investigation and consultation with the Surgeon General” (27 U.S.C. § 217). And only then can the Secretary of Treasury “report such information to the Congress together with specific recommendations for such amendments” (27 U.S.C. § 217). The outgoing Surgeon General’s recent advisory similarly reinforces Congress’s exclusive jurisdiction, writing that “[t]he power to change the label statement lies with Congress.” Regulatory guidance similarly provides that the ABLA “specifies how the label should appear and the exact words to use.” In that respect, it appears the ABLA prohibits alcoholic beverage manufacturers from unilaterally altering the language of the current health warning statement. That law similarly prohibits state governments from requiring their own version of a health warning statement on alcoholic products sold in their states.¹

Thus, despite statements by plaintiffs’ firms to the contrary, it appears that the ABLA preempts claims by private litigants and state agencies alleging that a manufacturer breached a purported duty to warn consumers of this alleged cancer risk by failing to alter the health warning statement. Less clear is whether federal law preempts claims arising out of separate representations made outside of the health warning statement and in connection with the advertising and promotion of alcoholic beverages.

Similar to the backlash faced by the tobacco industry following the then Surgeon General’s report concluding that smoking cigarettes causes cancer, manufacturers and distributors of alcoholic beverages may soon face accusations that they falsely promoted “healthy” or low-harm versions of their products despite what some would characterize as increasing guidance that there is no safe level of consumption. Yet, unlike the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1334)—a statute that the tobacco industry historically relied on to thwart both private litigation and state initiatives aimed at regulating the content of cigarette advertising—the ABLA only explicitly preempts changes to the health warning statement on “any container of an alcoholic beverage, or on any box, carton, or other package, irrespective of the material from which made, that contains such a container” (27 U.S.C. § 216) (i.e., the product’s “label”) and does not address health claims made separately in advertising or promotion. Under the ABLA, a “container” is defined as “the innermost sealed container irrespective of the material from which made, in which an alcoholic beverage is placed by the bottler and in which such beverage is offered for sale to members of the general public” (27 U.S.C. § 214).

Although traditional preemption doctrine would suggest that such regulation is often left to the states, in practice, this is blurred by the three federal agencies that each play a key role in the regulation of alcohol advertising: the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA), and the Federal Trade Commission (FTC). In fact, the TTB, FDA, and FTC all have a hand in regulating and policing health claims made by the alcohol industry to ensure those statements are supported by scientific or medical evidence. In addition, states are similarly able to regulate false advertising or consumer fraud within their respective borders.

To date, only a small handful of courts have considered the question of preemption with respect to claims alleging defects and inaccuracies in the alcohol advertising space, and those courts have taken a narrow approach in holding that federal regulations do not preempt certain state law claims. That said, industry participants may push to expand the ABLA’s preemptive impact to the extent any state laws or individual claims purport to conflict with the federal government’s extensive regulatory scheme.

Federal Regulation of Alcohol Advertising

TTB-Regulated Products

Enacted in 1935, the Federal Alcohol Administration (FAA) Act has served as the primary vehicle for regulating alcohol advertising in the United States. The TTB has the primary responsibility for enforcing the FAA Act and oversees “distilled spirits, wines, or malt beverage products” as defined by the Act.

Among other things, TTB regulations regarding advertising seek to prevent the “deception of the consumer and provide them with ‘adequate information’ as to the identity and quality of the product, to prohibit false or misleading statements, and to provide information as to the alcohol content of the product.” TTB regulations broadly define “advertisement” as any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail. Accordingly, TTB regulations govern a wide range of advertisements and include ads in or on:

• Newspapers or magazines;
• Trade booklets or sales pamphlets;
• Menus or shelf talkers:
• Leaflets, circulars, mailers, or catalogs;
• Promotional materials;
• Internet webpages, other electronic sites, or social networks;
• Any written, printed, graphic, or other matter (such as hang tags) accompanying the container;

• Representations made on shipping cases;
• Billboards, signs, or other outdoor displays;
• Other periodical literature or publications;
• Radio or television broadcasts; and
• Any other media.

The same regulations expressly exclude from the definition of an advertisement “[a]ny label affixed to any container” as well as any “covering[s]” (27 CFR §§ 4.61(a), 5.232(a), and 7.232(a)).

Notably, although the ABLA requires that the health warning statement be included in each alcoholic beverage product label, TTB regulations do not require the inclusion of the current health warning statement in advertisements and other promotional materials. Instead, TTB regulations only prohibit the use of misleading and unsubstantiated health-related advertising, stating that advertisements “may not contain any health-related statement that is untrue or tends to create a misleading impression as to the effects on health of alcohol consumption” (27 CFR 4.39(h)(2)(i)). “Specific health claims”—a health-related statement that “expressly or by implication, characterizes the relationship of the distilled spirits, alcohol, or any substance found within the distilled spirits, to a disease or health-related condition”—must comply with the more general regulations applicable to health-related statements just described and will only be permitted if they are supported by scientific or medical evidence, contain appropriate qualifiers, and disclose relevant health risks (27 C.F.R. § 5.129).

In addition to health-related regulations, the TTB has published rulings that warn in greater detail of the types of health claims that may mislead consumers. For example, TTB Ruling 2004-1 provides: “representations that imply that alcohol beverages may be a healthy part of a weight maintenance or weight loss plan, or that consumers may drink more of such beverages because of their low calorie or carbohydrate content, mislead consumers by presenting incomplete information about the health effects and nutritional content of alcohol beverages.” Additionally, per TTB Ruling 2014-2, the term “gluten-free” may only be used in advertising where the product manufacturer would be entitled to make a gluten-free claim under the standards set forth in applicable FDA regulations.

Also, unlike alcoholic beverage product labels, the TTB does not require that alcoholic beverage advertisements be pre-approved. Instead, the TTB offers a voluntary pre-clearance service designed to give industry members an opportunity to avoid costs that might otherwise be associated with revising or withdrawing a noncompliant advertisement after its broadcast, publication, or printing. The TTB also monitors the market through its Alcohol Beverage Advertising Program to ensure compliance with its advertising regulations and accomplishes this through a combination of referrals and complaints about specific alcohol beverage advertisements, industry member requests for advertising pre-clearance, and internal selections of advertisements for review. Examples of statements that the TTB pays particular attention to include: (1) statements that are false, misleading, or deceptive; (2) specific health claims and health-related statements; (3) misleading references to carbohydrates, calories, fat, protein, and other macronutrients or components; and (4) misleading or false curative or therapeutic claims.

Finally, the TTB may consult the FDA “as needed” on the use of a specific health claim in a product’s labeling or advertising (27 C.F.R. § 5.129(b)(2)(i)). In fact, rulemaking that led to TTB regulations concerning health-related statements noted that TTB’s predecessor agency had “always utilized, as the TTB does now, the scientific and public health expertise of FDA.”² The TTB’s reliance on the FDA in evaluating specific health advertising claims was recently endorsed by the court in Bellion Spirits, LLC v. United States, 7 F.4th 1201 (D.C. Cir. 2021). There, Bellion Spirits petitioned the TTB to determine whether Bellion could lawfully make certain claims on its labels and in advertisements about the alleged health benefits of NTX, a proprietary blend that Bellion contended mitigates alcohol’s damage to a person’s DNA. After consulting the FDA, the TTB denied Bellion’s petition on the grounds that the claims were scientifically unsubstantiated and misleading. The court ultimately granted summary judgment in favor of TTB, finding, among other things, that the TTB properly consulted with and relied on the FDA’s evaluation of Bellion’s alleged scientific evidence.

FDA-Regulated Products

Although the TTB is the primary regulator of alcohol advertising in the United States, the labeling and advertising of other alcoholic beverages that do not fall within the definition of “distilled spirits, wines, and malt beverage products” under the FAA Act—namely, certain beers, hard ciders, hard seltzers, Kombucha teas, and alcohol-infused foods—are subject to the jurisdiction of the FDA.

Unlike the TTB, the FDA has not issued specific regulations or guidance governing alcohol advertising for the products it oversees. Instead, FDA guidance generally states that products under its jurisdiction must “be truthfully and informatively labeled in accordance with … regulations.” This includes any advertising that makes health claims about a certain product. FDA regulations do specify, however, that the FDA will only permit a health claim in advertising when it determines, “based on the totality of publicly available scientific evidence” that there is “significant scientific agreement, among experts qualified by scientific training and experience to evaluate such claims, that the claim is supported by such evidence” (21 CFR 101.14(c)).

As discussed, the FDA shares general health expertise with the TTB on an ongoing basis and ensures mutual compliance with both agencies’ regulations. For example, in April 1993, the FDA advised TTB’s predecessor agency that certain curative, therapeutic, or disease prevention claims for an alcoholic beverage might make the product a “drug” within the meaning of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1)(B)).³ As a result, the FDA advised that these products may be considered misbranded going forward if they bear a claim that characterizes the relationship of a nutrient to a disease or health-related condition, unless the claim is scientifically substantiated in accordance with FDA regulations (21 U.S.C. 343(r)(1)(B)).

FTC Enforcement

The FTC, whose principal mission is to promote consumer protection, maintains concurrent jurisdiction with the TTB and FDA over alcoholic beverage advertising and can independently investigate and prosecute an advertiser for an unlawful advertisement. The FTC derives its power and authority from the Federal Trade Commission Act (FTC Act), which prohibits, among other things, the dissemination of false advertisements. The FTC Act defines a “false advertisement” as “an advertisement, other than labeling, which is misleading in a material respect” (15 U.S.C. § 55(a)(1)). The FTC Act does not explicitly define what constitutes an advertisement, but courts have concluded that “representations concerning the qualities of a product and promoting its purchase and use” are advertisements under the FTC Act.⁴

Although the FTC has not promulgated binding regulations governing alcohol advertising, it maintains enforcement power for any unfair or deceptive trade practices, including advertising claims. In a policy statement published in the Federal Register in June 1994,⁵ the FTC stated that it is necessary to examine “whether qualified claims are presented in a manner that ensures that consumers understand both the extent of the support for the claim and the existence of any significant contrary view within the scientific community.” In the same policy statement, the FTC maintained that an unqualified health claim in the advertising of food (including alcoholic beverages) was likely to be deceptive if it also contained a nutrient that increased the risk for another disease or health-related condition, and the risk-increasing nutrient was closely related to the subject health claim.

The FTC encourages industry members to comply with the codes of conduct relating to alcohol advertising and marketing written by the Distilled Spirits Council of the United States (DISCUS), the Beer Institute, and the Wine Institute. Though non-binding, most, if not all, industry members elect to comply with these voluntary guidelines in an effort to help ensure that their advertisements are socially responsible. For example, although not required under any federal law or regulation, DISCUS strongly suggests that industry parties remind consumers to enjoy alcoholic beverages responsibly and to include responsible drinking statements in advertising and other promotional materials.

State Regulation of Alcohol Advertising

Although the federal government has exercised primary responsibility over alcoholic beverage advertising, the Twenty-First Amendment to the US Constitution gives each of the 50 states broad power to regulate alcohol within their borders. Section 121 of the FAA Act (27 U.S.C. § 121) also explicitly reserves a state’s ability to regulate alcohol within its borders and expressly states that federal law does not preempt state laws from regulating intrastate alcohol use, consumption, sale, or storage. And every state has one or more statutes prohibiting false advertising or consumer fraud within that state, which are broad enough to include advertising of alcoholic beverages.

That said, a state’s ability to regulate alcohol within its borders is not limitless, and US Supreme Court decisions to date have made clear that the states’ regulatory powers over alcohol must be considered in the context of the entire constitutional scheme.⁶ Additionally, courts are reluctant to permit states to restrict the content of advertising so long as it is not false and misleading.⁷

Litigation Involving Alcoholic Beverages and Health Advertising Claims

Buried in the rulemaking that led to the regulations concerning health-related statements is a note from the TTB that specifies § 216 of the ABLA (“No statement relating to alcoholic beverages and health, other than the statement required by section 215 of this title, shall be required under State law to be placed on any container of an alcoholic beverage . . . ”) only preempts “[s]tate governments from each requiring their own version of a health warning statement on alcohol beverage containers.”⁸ The TTB goes on to state that § 216 “in no way precludes producers from voluntarily placing either additional warning statements or health claims on alcohol beverage labels.” Put more simply, according to the TTB’s commentary, while state governments cannot require their own version of a health warning statement, manufacturers are generally free to add their own health warnings outside of the mandated health warning statement language.

It is worth noting, however, that the Supreme Court has grown increasingly skeptical of agency commentary on the preemptive scope of statutory language.⁹ And the TTB’s commentary here may be called further into question in light of the Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), where the Court overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), signaling even less of an interest in deferring to an agency’s interpretation of Congressional statutes.

To date, only a handful of litigations have involved state claims alleging that industry parties have falsely represented the health benefits of their alcoholic beverage products. In each case, the courts took a narrow view and held that these claims were not preempted under federal laws and regulations.

Cases Examining Omissions of Health-Related Disclosures

In Cuevas v. United Brands Co., 2012 WL 760403 (S.D. Cal. Mar. 8, 2012), the plaintiff brought an action on behalf of herself and a purported class of similarly situated individuals under various California consumer protection statutes. She alleged that United Brands Co. (“UBC”) engaged in deceptive business practices in connection with the marketing of its flavored caffeinated alcoholic beverage. According to the plaintiff, nothing in UBC’s labeling or advertising disclosed the amount of caffeine in the product or the risks associated with caffeine as used in the product. In response, UBC argued, among other things, that § 216 of the ABLA preempted all of the plaintiff’s claims because she sought to impose warnings regarding potential risks beyond those prescribed by the ABLA under the health warning statement. The court disagreed that UBC could not warn about the risks of caffeine—a non-alcoholic ingredient—in its label and instead interpreted § 216 more narrowly as to only preempt warnings regarding health risks associated with alcoholic ingredients, including any statements regarding a “heightened risk of certain forms of cancer or other disease.” Going further, the court specified that, to the extent plaintiff’s claims were based on marketing other than the product’s container and packaging, those claims “clearly are not preempted” because the ABLA does not address advertising or promotion—suggesting that any advertising statement outside of the label regarding both non-alcoholic and alcoholic ingredients would not be preempted.

Relying on Cuevas, the court in Yourth v. Phusion Projects, LLC, 2012 WL 13055006 (N.D.N.Y. Sept. 27, 2012) came to the same conclusion. Yourth involved a class action brought under New York General Business Law § 349 and § 350 alleging that Phusion Projects, LLC, the manufacturer of the popular caffeinated alcoholic beverage “Four Loko,” failed to disclose the effects of mixing caffeine with alcohol in its labeling and advertising. Agreeing with the Cuevas court that § 216 of the ABLA preempts “any state law requiring different or additional warnings regarding alcoholic beverages,” the Yourth court found no basis to construe § 216 as intending to preempt state law from requiring warnings regarding a non-alcoholic ingredient combined with alcohol. Additionally, the Yourth court similarly found that the ABLA “applies only to packaging and would not preempt plaintiff’s claims based on representations in other contexts, such as advertising and marketing.”

Cases Examining Affirmative Health Statements

In Marek v. Molson Coors Beverage Co., 580 F. Supp. 3d 848 (N.D. Cal. 2022), plaintiffs brought a putative class action against Molson Coors entities under various California consumer protection statutes, alleging that defendants engaged in deceptive and unlawful practices in labeling and marketing their “fortified” alcoholic Vizzy Hard Seltzer product with beneficial health statements, including with “antioxidant Vitamin C” from a “superfruit.” Defendants argued that any claims involving “fortification”—a process whereby nutrients are manually added to a beverage where they otherwise do not naturally occur—were expressly preempted by the FDA’s “Fortification Policy” (21 C.F.R. § 104.20). However, plaintiffs argued, and the court agreed, that plaintiffs’ claims were not preempted because state law and federal regulations did not conflict, and that plaintiffs were simply seeking to enforce the FDA’s own standards surrounding false and misleading representations associated with the use of “fortification.” The court also rejected defendants’ primary jurisdiction argument, finding that the defendants could not point to any present FDA action on fortification such that agency action and the court action would substantially overlap. Finally, the court also rejected defendants’ argument that no reasonable consumer could be misled into thinking that drinking hard seltzer is “healthy” as a matter of law, despite the fact that the dangers of consuming alcohol are generally known and because the Vizzy packaging included the required Surgeon General’s warning regarding the dangers of consuming alcohol.

Cases Examining a Manufacturer’s Duty to Warn of the Risks Involved with Drinking Alcohol

By contrast, in Cook v. MillerCoors, LLC, 829 F. Supp. 2d 1208 (M.D. Fla. Oct. 28, 2011), the court acknowledged a long line of cases in the design defect and failure to warn context that decline to extend the duty to warn to the marketing of alcoholic beverages based upon a plaintiff’s perception or understanding of the risks involved with a particular product. The dispute in Cook involved design defect and failure to warn claims under Florida common law regarding a motorcycle driver who consumed several containers of Sparks—an alcoholic energy drink then manufactured and sold by MillerCoors—and was later killed in a crash while his passenger, the plaintiff, was injured. Here, the plaintiff alleged that the combination of alcohol and stimulants in Sparks created a latent inherent danger in the product, and that MillerCoors had a duty to warn consumers of that danger. In response, MillerCoors argued that the plaintiff’s state law failure to warn claim was preempted by § 216 of the ABLA. Plaintiff countered that the ABLA applied only to containers and that her claim instead alleged that MillerCoors misled consumers about the risks of Sparks through its mass advertising campaign. Acknowledging that the plaintiff had a “well-reasoned argument against preemption,” the court ultimately declined to extend the duty to warn to the marketing of alcoholic beverages and cited instances where other courts had done the same. See Robinson v. Anheuser Busch, Inc., 2000 WL 35432556 (M.D. Ala. Aug. 1, 2000) (holding that beer commercials featuring “talking” frogs, lizards, and alligators that might appeal to children did not create a duty to warn about the dangers of underage drinking); Malek v. Miller Brewing Co., 749 S.W.2d 521 (Tex. App. 1988) (finding no duty to warn despite claim that advertising led plaintiff to believe that “Lite” beer was less intoxicating than other beer); Pemberton v. Am. Distilled Spirits Co., 664 S.W.2d 690 (Tenn. 1984) (holding that the risk of death from ingesting Everclear grain alcohol was not unknown).

Takeaways

In sum, courts that have considered the ABLA’s preemptive scope to date have taken a narrow approach. Nevertheless, there may be opportunities for industry players to capitalize on the federal regulatory framework and preemption doctrines to revisit the bounds of preemption under the ABLA, especially with respect to representations made in the advertising and promotion of alcoholic beverage products. This is especially true now given the Supreme Court’s recent decision in Loper Bright Enterprises, as courts may give less deference to the TTB’s interpretation of the ABLA as only preempting state governments from requiring their own version of a health warning statement.

¹ See Health Claims and Other Health-Related Statements in the Labeling and Advertising of Alcohol Beverages, 68 Fed. Reg. 10,076 at 10,082 (Mar. 3, 2003) (hereinafter, “TTB Rulemaking on Health Claims”) (“This section of the law preempts State governments from each requiring their own version of a health warning statement on alcohol beverage containers.”).

² TTB Rulemaking on Health Claims, supra note 1, at 10,076.

³ See also Federal Register: Health Claims and Other Health-Related Statements in the Labeling and Advertising of Alcohol Beverages (99R-199P).

⁴ F.T.C. v. Nat’l Comm'n on Egg Nutrition, 517 F.2d 485, 488 (7th Cir. 1975).

⁵ Enforcement Policy Statement on Food Advertising, 59 FR 28,388-01 (June 1, 1994).

⁶ See, e.g., Granholm v. Heald, 544 U.S. 460, 465-66 (2005) (finding unconstitutional certain state laws that restrict the ability of out-of-state wineries to ship directly to consumers while allowing in-state wineries to do so); Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 588 U.S. 504, 535-37 (2019) (holding that Tennessee’s two-year durational-residency requirement applicable to retail liquor store license applicants violated the Commerce Clause).

⁷ See, e.g., 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996) (striking down, as a violation of the First Amendment’s free speech clause, a state law prohibiting the advertising of alcohol prices).

⁸ TTB Rulemaking on Health Claims, supra note 1, at 10,082.

⁹ See, e.g., Wyeth v. Levine, 555 U.S. 555 (2009) (declining to defer to a 2006 preemption preamble added to an FDA rule that was not subject to notice or comment and holding that federal law did not preempt plaintiff’s state law failure to warn claim).