Corporate Social Responsibility – Introduction: CSR in a Policy Context
Last month’s management briefing examined the positions and activities of groups looking to address alcohol-related harm through tighter regulatory control of the industry. This month’s briefing, which manages to sneak just under the wire at the end of March, considers the industry’s own engagement in preventing or mitigating alcohol harm.
Industry advocates firmly believe that alcohol companies have a unique contribution to make to the challenge of tackling alcohol-related harm. In particular, they offer closeness to the actual consumer and the consumption occasion that, if exploited judiciously, can be hugely useful.
This close relationship with the consumer offers two principal advantages: access and insight. Alcohol companies and their representative organisations can contact consumers at the point of sale, arguably at the very moment when alcohol consumption can potentially turn into misuse. Furthermore, their consumer insight and marketing expertise makes alcohol companies important allies in preventing alcohol consumption becoming abuse.
However, some public health practitioners object to the idea of companies participating in what they see definitively as matters of public health, believing commercial vested interests make it impossible for companies truly to act in the public interest. Others recognise not only that industry may have something positive to contribute but also that industry needs to be involved in discussions about how alcohol-related harm is tackled.
Industry CSR in a policy context
In general, policymakers across the markets being studied in this report – the UK, the wider European Union and the US – see an important role for industry in tackling alcohol misuse.
The role an active CSR profile can play in securing a sympathetic regulatory approach has been underlined in the UK in recent weeks as details of the Public Health Responsibility Deal have been announced.
Campaigners have argued that the Responsibility Deal, which places emphasis on voluntary commitments from industry rather than regulation, has come about through intense industry lobbying. Scepticism has only increased since six prominent alcohol charities failed to endorse the agreement.
Campaigners have also suggested that the ‘pledges’ the industry has made are not sufficiently ambitious. Among other undertakings, industry has pledged;
- to ensure that, by December 2013, over 80% of products on-shelf will have labels with clear unit content,
- to provide simple and consistent information in the on-trade and off-trade to raise awareness of the unit content of alcoholic drinks,
- to commit to ensuring effective action is taken in all premises to reduce and prevent underage sales
- to continue backing the Drinkaware Trust, and
- to commit to further action on marketing and advertising, for example by developing a new sponsorship code requiring the promotion of responsible drinking.
Industry advocates suggest the commitments represent not only a continuation of the corporate responsibility work it has already undertaken, but also recognition by the Government of the progress industry has made as well as its ability to regulate itself.
Trade organisations such as the European Spirits Organisation (CEPS) and Brewers of Europe are tasked to represent the views of industry in various policy debates, including those related to alcohol and health. So, what they do or say in the area of social responsibility is important both in terms of what they can contribute to harm prevention and in influencing the industry’s standing with EU lawmakers and other stakeholders.
The generally positive view taken by the European Commission towards self-regulation and industry involvement in the policy debate can clearly be seen in the EU Strategy to reduce Alcohol Related Harm, a six-year strategy running from 2006 to 2012, which spawned the creation of the EU Alcohol and Health Forum. This is a multi-stakeholder forum which brings together industry, government, NGOs and public health professionals to discuss how alcohol harm should be tackled on an EU-wide basis.
Industry representatives have viewed their involvement in the Alcohol and Health Forum as an important channel through which to contribute to the fight against alcohol harm, and as recognition of the industry’s social responsibility work.
The credibility of industry corporate responsibility and self-regulation, and the involvement of industry stakeholders in discussing future policy options are particularly important at the moment, as the current alcohol harm strategy moves towards its final year. Discussions around the next iteration of the EU’s strategy are now taking place and there are plenty of stakeholders who will be pushing for stronger regulatory action in the coming years.
In the US, the Federal Trade Commission (FTC) is to conduct a review of self-regulation in alcohol advertising this year. The self-regulatory advertising codes of the various trade associations are a critical element in the social responsibility platforms of the alcohol industry and the review will provide both industry and other stakeholders with an evaluation of their efficacy.
The last FTC review, conducted in 2008, was generally favourable about the level of social responsibility in alcohol advertising. This will be the fourth review the FTC has undertaken since 1999. The FTC also works with industry on the 'We Don’t Serve Teens' programme, discussed later in this report, which also suggests a belief in the effectiveness of voluntary action on the part of industry around social responsibility.
However, it should be pointed out that the 2008 advertising review was conducted during the Bush administration, which had a laissez-faire approach towards business regulation. Appointments by the Obama administration at the Food and Drug Administration (FDA) and FTC underline that there has been a change of watch and a more hands-on approach has been in evidence.
However, the Obama administration has so far not made alcohol harm a priority area in the way that it has childhood obesity. From an alcohol policy standpoint, the legislation occupying more column inches than any at the moment relates to the rights of state legislatures to have their own alcohol regulations. Last year, the possibility of Congress passing the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act attracted significant publicity. This month, a reiteration of the CARE Act, in the form of House Resolution 1161, the Community Alcohol Regulatory Effectiveness Act, was presented to Congress.
This legislation essentially pertains to the control of inter-state shipping, but it also raises some issues relevant to the discussion of industry responsibility. Public health campaigners supported HR 5034 as they see state legislation on alcohol and the three-tier alcohol distribution system that it aims to defend as important means of protecting the public from alcohol-related harm.
Another facet of the debate over CARE is that it has showed the drinks sector to be fundamentally divided on a matter of alcohol policy. Whether in the US or elsewhere, the credibility of industry social responsibility often depends on it showing a united front and a demonstrable willingness from all parts of the trade to work together to mitigate the harms alcohol can cause.
While there are examples of collaboration in the US, there is also a history of some acrimony between the different sectors over the alcohol harm issue. As elsewhere, spirits companies tend to feel they are treated more punitively than beer and wine in terms of regulation. Many spirits producers would contend that, in the US, the beer and wine industries do more to actively set themselves apart from spirits than in other countries.
The debate over CARE also underlines the divide in the US alcohol industry created by the three-tier system. While, clearly, there is a serious bone of contention between the wholesale and producer tiers, in the current environment all parts of the US drinks industry need to be able to demonstrate that, on issues of promoting responsible consumption and mitigating alcohol harm, they are all singing from the same hymn-sheet.
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