FTC Staff Comment Before the Bureau of Alcohol, Tobacco, and Firearms Concerning Use of the Word Light in Alcohol Labeling

.",
Comments of the Bureaus of
Competition, Consumer Protection and Economics
of the Federal Trade Commission·
on
Use of the Word "Light" (Lite)
in the Labeling and Advertising of Wine,
Distilled Spirits, and Malt Beverages
Notice No. 600
Bureau of Alcohol, Tobacco and Firearms
December 31, 1986
• 	These comments represent the views of the Bureaus of Competition,
Consumer Protection, and Economics of the Federal Trade Commission and do
not necessarily represent the views of the Commission or of any individual
Commissioner. 	The Commission, however, has authorized 	th-:: submission of
these comments.

Comments on the Use of the Word "Light" (Lite)
in the Labeling and Advertising of Wine.
Distilled Spirits, and Malt Beverages
Notice No. 600, BATF
The 	Bureau 	of 	Alcohol, 	Tobacco 	and 	Firearms 	("BA TF") 	proposes 	to
revise 	its 	regulations 	governing 	the 	advertising 	and 	labeling 	of 	"light" 	or
"lite" alcoholic 	beverages. 	BA TF seeks comments on 	these regulations, 1 and
the 	staff 	of 	the 	Federal 	Trade 	Commission 	("FTC") 	is 	pleased 	to 	provide
them.
The mission of the FTC is to foster a competitive marketplace, free of
unfair and deceptive practices. 	Our statutory standard is found in Section 5
of 	the 	Federal 	Trade 	Commission 	Act 	(I938), 	which 	prohibits 	"unfair 	or
deceptive acts 	or practices in 	or 	affecting commerce." 	We have acquired
substantial expertise on 	issues 	relating 	to 	advertising, 	mandatory 	disclosure
and product standards.
Our 	experience 	with 	these 	issues 	leads 	us 	to 	believe 	that 	markets
perform 	most 	efficiently 	when 	consumers 	are 	well 	informed. 	Truthful
advertising plays an important role in this process by providing information
in 	a 	form 	that 	is 	useful 	to 	consumers. 	We 	have 	further 	found 	that 	if
consumers 	value 	increased 	information 	concerning 	product 	characteristics,
manufacturers 	whose 	products 	have 	desirable 	characteristics 	will 	have 	an
incentive to provide that information voluntarily.2 	Regulations that restrict
1 Fed. Reg. 28,836 (A ugust 12, 1986).
2 	In 	some 	cases, 	even 	though 	there 	would 	be 	net 	social 	benefit
associated with 	the provision of product 	information, manufacturers do not
provide 	it. 	This 	phenomenon, 	a 	form 	of 	"market 	failure," 	occurs 	when
manufacturers as a whole would benefit from providing this information to
(footnote continued)

truthful 	advertising 	are 	likely 	to 	lead 	to 	increased 	consumer 	search 	costs,
increased 	producer 	costs, 	and, 	ultimately, 	to 	market 	inefficiency. 	As 	a
result, 	we 	believe 	that 	the 	government generally 	need 	not 	intervene 	in 	the
market process except in cases where consumers are misled or deceived.
In this comment we specifically address five provisions of the proposed
rule:
1) 	BA TF 	proposes 	to' 	loosen 	some 	restrictions 	on 	compara ti ve
advertising 	of 	"light" 	and 	"regular" 	products, 	but 	retain 	others. 	While 	we
generally 	support 	this 	proposal, 	we 	are 	concerned 	that 	the 	proposed 	rule
would 	not 	allow 	certain 	truthful, 	nondeceptive 	comparative 	claims.
Therefore, the proposed rule is more restrictive than necessary and deprives
consumers of information they might wish to use in making product choices.
2) 	BA TF 	proposes 	to 	require 	manufacturers 	of 	certain 	alcoholic
beverages that 	use 	the 	term "light" ("lite") 	in a 	brand 	or product 	name 	on
the 	label 	to disclose 	the calorie content on 	the 	front 	label, and 	to 	provide
the 	remainder 	of 	an 	"average 	analysis 	statement" 	(carbohydrate, 	fat, 	and
protein 	content) 	elsewhere on 	the 	label. 	Absent 	evidence of 	a 	significant
informational market failure, we do not believe that a mandatory disclosure
is justified. 	However, if any disclosure is required, it should be limited 	to
calorie information in legible type visible anywhere on the label.
(footnote continued)
consumers but, for 	anyone 	manufacturer, the 	cost 	of 	providing it exceeds
the benefit.
Instances of market failure, especially when 	health 	or safety issues are
involved, 	often 	provide 	sound 	justification 	for 	government 	regulJtion 	or
intervention. 	See, for 	example, 	Roger Miller, 	Intermediate 	Microeconomics,
McGraw Hill, 1978, p. 457.
2

3) BATF proposes to eliminate the designation "light wine" as a distinct
product category. 	This proposal would impose costs on manufacturers and on
consumers who are familiar with the designation "light wine." 	We are aware
of 	no evidence that consumers are confu:.ed 	by this designation. 	Since we
perceive 	regulatory costs, and 	are aware of no 	benefits, we cannot support
this provision.
4) 	BATF 	would 	allow 	malt 	beverages containing less 	than 	2.5 	percent
alcohol 	to 	be 	labeled 	and 	advertised 	as 	reduced 	or 	low 	alcohol 	malt
beverages. 	While we view this solution as less desireable than allowing firms
to 	advertise 	the 	actual 	alcohol 	content 	of 	their 	products, 	we 	support 	this
provision 	which 	would 	increase 	the 	flow 	of 	truthful, 	nondeceptive
information to consumers.
5) 	BA TF seeks comments 	on 	whether 	there 	should 	be 	a 	calorie 	limit
over 	which 	a 	beer 	should 	not 	be 	permitted 	to 	be 	called 	"light," 	and 	on
whether a "light" product should have a maximum calorie content relative to
the 	firm's 	regular 	product. 	In 	addition, 	BA TF 	wants 	to 	know 	whether
disclosure of calorie content should be mandated for all alcoholic beverages.
We believe that no such restrictions are necessary.
We will comment on these matters in turn.
Regulation of Truthful Comparative Advertising
The statutory language of the Federal Alcohol 	Administration 	Act [27
USC 	205(f)] 	prohibits 	comparative 	ads 	that 	are 	false, 	misleading 	or
disparaging of a competitor's product. 	BA TF has previously interpreted this
language to prohibit calorie or carbohydrate comparisons other than between
3

a 	firm's 	light 	beer 	and 	either 	its 	regular 	beer or a 	competitor's light 	beer.
BATF is now proposing to allow other calorie and carbohydrate comparisons
between alcoholic 	beverages,:! but only 	if (1) an 	average analysis statement
is on the label of the product whose manufacturer is making the comparison.
(2) the comparison is to a specific named product, and (3) the serving size is
disclosed. 	Although 	less 	restrictive 	than 	previous regulations, 	this proposal
still prohibits some truthful comparative advertising claims.
Our 	research 	and 	experience 	indicates 	that 	the 	better 	informed 	the
consumer, the more efficiently the market will perform. 	Restrictions which
make 	it 	more 	difficult 	to 	engage 	in 	truthful 	comparative 	advertising 	will
increase the costs of consumer search, lead to inferior consumer choices, and
reduce 	the 	incentives 	of 	manufacturers 	to 	produce 	products· 	with
characteristics 	desired 	by 	consumers. 	Truthful 	advertising 	plays 	a 	very
important and beneficial role in providing consumers with information about
product characteristics, 	particularly new 	product characteristics. 	Therefore,
we 	believe 	that 	comparative 	advertising 	claims 	should 	not 	be 	restricted
unless they are false or misleading.
The 	proposed 	regulations 	would 	prohi bi t 	tru thfu I 	compara ti ve
advertising claims concerning calories unless the advertising firm's product is
labeled with an average analysis statement. 	Thus, the manufacturer of Brand
X 	regular 	beer 	could 	not 	make 	a 	true 	statement 	that 	"Brand 	X 	contains
fewer calories than Brand Y" unless it disclosed its calorie content and other
characteristics 	on 	its 	label. 	This 	requirement 	could 	raise 	advertising 	costs
3 	For, example, 	BATF 	proposes 	to 	allow 	comparative advertisements
for 	"light" wine, "light" distilled 	spirits, or "light" 	beer that state: "brand 	X
contains 100 calories per 12 fluid ounces - 40 calories fewer than brand Y's
regular (beer, wine, or distilled spirits)."
4

for 	Brand 	X 	and 	deter 	the 	manufacturer 	from 	providing 	consumers 	with
useful information.
The 	proposed 	regulation 	would 	also 	prohibit 	comparative 	advertising
claims 	that 	did 	not 	involve 	two 	specific 	named 	products. 	However, 	we
believe that a manufacturer can communicate useful information to consumers
by comparing its product with a group of other similar products available on
the market. 	For example, we 	think consumers would 	be interested to learn
that 	"Light 	A 	has 	fewer 	calories 	than 	any 	other 	light 	beer" 	and 	that
consumers would find 	it useful 	to know that, even though it is not labeled
as 	"light," 	"Brand 	B 	has 	fewer 	calories 	than 	several 	light 	beers 	on 	the
market." 	Similarly, 	a 	manufacturer 	of 	a 	regular 	beer 	with 	superior 	taste
might 	want to communicate to consumers of light beer that they can enjoy
this 	taste 	without 	a 	large 	calorie 	penalty. 	The 	manufacturer 	could
communicate this by saying "Brand C has only 15 percent more calories than
the average light beer." 	Such a comparison between the advertiser's product
and an average is apt to be valuable to consumers.'
Similarly, the proposed 	regulation would 	prohibit truthful 	comparisons
that 	do not state the 	actual 	number of calories for 	specified serving sizes.
Thus, a manufacturer who simply wanted to say "Light A contains 20 percent
fewer 	calories 	than 	Light 	B" 	would 	be 	required 	to 	say 	instead 	"Light 	A
contains 88 calories per twelve fluid ounces, 20 percent fewer than Light B."
• 	BATF 	may 	be 	concerned 	with 	possible 	enforcement 	difficulties 	if
claims such 	as "our light 	beer contains 	1/3 fewer calories than 	the average
regular beer" are 	permitted. 	Our experience is that 	it is sufficient for 	the
advertiser 	to 	be 	required 	to 	provide 	a 	reasonable 	basis 	to substantiate 	its
claims when requested. 	Manufacturers might satisfy this requirement through
appropriate 	survey 	sampling 	or 	through 	use 	of 	existing 	surveys 	of 	beer
calorie content. 	Such 	sources could 	provide a 	reasonable 	basis 	for 	a claim
that a beer "contains 1/3 fewer calories than regular beer."
5

By forcing 	the manufacturer to say more and 	to use a 	particular cluttered
format, this requirement could raise the cost and reduce the effectiveness of
advertising, 	and 	therefore 	restrict 	the 	flow 	of 	useful 	information 	to
consumers. 	This restriction could be particularly expensive in radio and TV
ads, 	and 	therefore 	reduce 	the 	communication 	of 	useful 	comparative
information in such ads. s
We 	can 	see 	no 	benefits 	to 	restricting 	nondeceptive 	and 	truthful
comparative claims in advertising. 	These restrictions could result in greater
advertising 	costs, 	less 	comparative 	advertising, 	greater 	consumer 	search
costs, and hence less consumer information, inferior purchase decisions, and
ultimately higher prices for consumers. 6
Disclosure of Calorie Content and Avera2e Analysis
For "Light" Brands
BATF 	believes 	that 	use 	of 	the 	words 	"light" 	and 	"lite" 	might 	cause
"consumer deception and confusion."7 	Therefore, BA TF proposes 	to require
5 	Of 	course, 	if 	companies 	should 	make 	calorie 	comparisons 	based 	on
different serving sizes without disclosing that fact, such ads would likely be
deceptive 	or 	misleading, 	and 	could 	be 	challenged on 	a case 	by case 	basis.
We 	note that 	BATF proposes 	to 	allow 	low alcohol 	malt 	beverages 	to 	make
comparative statements 	of alcohol 	content (e.g., "this 	product 	contains 	one-
third 	less 	alcohol 	than 	brand 	X 	beer") 	without 	disclosing 	the 	serving 	size
used 	in 	the comparison. 	If BA TF should conclude 	that the elimination of
serving 	size 	disclosure 	would 	not 	mislead 	consumers 	significantly 	for 	this
category, 	we 	do not see 	why a 	different conclusion should 	be 	reached 	for
other categories.
6 	If 	one 	chose 	for 	policy 	reasons 	to 	promote 	temperance 	through
higher 	prices 	for 	alcoholic 	beverages, 	raising 	prices through 	taxation 	could
be a more efficient solution than raising prices through increased producer costs.
7 	Confusion 	might 	arise 	because 	the 	word 	"light" 	with 	reference 	to
alcoholic 	beverages 	has 	traditionally 	referred 	to 	both 	alcohol 	content 	or
color. 	"Light 	wine," 	as defined 	by 	BA TF, 	is wine 	containing 	less 	than 	14
percent alcohol.
6

manufacturers of certain alcoholic beverages who use the term "light" ("lite")
in a 	brand 	or product name on 	the label to disclose the calorie content on
the brand (front) label in "the correct size of type, separate and apart from
other 	information," 	and 	to 	provide 	the 	remainder 	of 	an 	"average 	analysis
statement" (carbohydrate, fat, and protein content) elsewhere on the labeL 8
This 	regulation 	would 	impose several 	costs on 	manufacturers 	of 	light
beer. 	They 	would 	have to design 	and 	produce 	new 	labels, 	with 	a 	calorie
disclosure on the front, separate from the remainder of the average analysis.
Information or designs that now appear on the front of the label might have
to be moved, changed, or eliminated. 	To the extent that this other material
helps people to make effective choices, such changes could reduce consumer
welfare.
The 	regulation 	could 	be 	most 	costly 	to 	Piel's 	and 	Beck's. 	For 	many
years 	these 	manufacturers 	have 	sold 	"light" 	beers 	that 	are 	not 	low 	in
calories. 	They 	have 	used 	the 	term 	"light" 	to 	distinguish 	these 	beers 	from
their 	"dark" 	beers. 	If 	the 	proposed 	regulation 	goes 	into 	effect, 	these
companies 	would 	have 	to 	change 	their 	labels, 	either 	by 	providing 	calorie
information or by modifying the word light (i.e., "Light Color Beer"). 	To the
extent that consumers rely on the word "light" to provide information about
characteristics other 	than 	calories, consumers would 	also be 	injured 	by 	the
proposed regulation.
8 	This 	regulation 	represents 	a 	codification 	and 	slight 	modification 	of
current administrative policies. 	Most manufacturers who use the term "light"
when 	referring 	to 	beer 	must 	now 	include 	an 	average 	analysis 	statement
(including calories) on proposed labels before BA TF staff will approve them.
The proposed regulation is different in that it would require manufacturers
to separate calorie information from the rest of the information contained in
the average anal ysis sta temen 1.
7

We oppose this proposal because we have seen no empirical evidence to
suggest 	that 	this 	mandatory 	disclosure 	will 	be 	beneficial. 	For 	example, 	it
would 	not 	be 	difficult 	to 	determine 	(by 	a 	market 	survey, 	for 	example)
whether significant 	numbers of "Piel's Light" drinkers wrongly 	believe they
are 	consuming 	a 	low 	calorie 	beer. 	There 	is 	also 	no 	systematic 	evidence
(either 	from 	copy 	tests 	or 	surveys) 	with 	respect 	to 	the 	number 	of 	beer
drinkers 	in 	general 	who 	are 	confused 	by 	the 	term 	"light."9 	In 	general, 	a
great 	many 	words 	have 	multiple 	meanings, 	and 	yet 	cause 	little 	or 	no
confusion 	when 	used 	in 	context. lO 	Therefore, 	unless 	we 	have 	evidence 	to
suggest that consumers are confused 	by 	use of the term "light," there is no
reason 	to 	believe 	that 	this 	proposed 	regulation 	has 	benefits 	that 	will
outweigh its costs.
9 An FDA telephone survey conducted 	in 	1982 asked consumers "Have
you 	ever seen a 	food 	product or 	beverage labeled 	light so-and-so." 	Eighty
percent of consumers indica ted that they had. 	They were then asked "What
does 	the 	word 	light 	mean 	to 	you 	when 	you 	see 	it 	on 	a 	food 	product 	or
beverage?" 	Seventy percent of those who answered yes to the first question
said that the word "light" on food and beverage packages means the product
is 	lower 	in 	calories. 	It 	is 	difficult 	to 	interpret 	these 	results 	because
consumer interpretation of the word "light" might be quite different 	in 	the
specific context of alcoholic beverages. 	More generally, the survey evidence
does 	not 	indicate 	whether 	or 	not 	the 	multiple 	meanings 	of "light" confuse
consumers. 	Indeed, 	a 	TV 	commercial 	for 	a 	low 	calorie 	beer 	graphically
reminded its viewers that asking for a "light" could result in a match being
applied to the end of your cigarette, a working torch 	being placed in 	your
outstretched hand or a powerful searchlight being shone in your eyes. 	The
fact 	that such contrived confusion is amusing may be due to the fac. 	that,
although such. misunderstanding is possible, it so seldom happens 	that 	when
it does we think it is funny.
10 	Many 	such 	words apply 	to 	foods. 	For example, "sweet" normally
refers 	to 	sugar 	content, 	but 	"sweet" 	butter 	refers 	to 	the 	absence 	of 	salt.
"Italian" 	olive 	oil 	is 	imported 	from 	Italy, 	but 	"Italian" sausage 	refers 	to 	a
type 	of 	meat. 	"Deluxe" often 	refers 	to size, 	but 	in 	other cases 	it suggests
added 	ingredients 	("deluxe" 	pizza 	or 	"deluxe" 	salad 	oil). 	In 	a 	restaurant
setting, 	"hot" 	roast 	beef 	refers 	to 	temperature, 	but 	"hot" 	taco 	sauce 	refers
to spice content.
8

The 	argument 	against 	mandatory 	disclosure 	is 	buttressed 	by economic
theory. 	If calorie information is of substantial interest to customers, theory
suggests that companies will supply it voluntarily. 	In fact, manufacturers of
low 	calorie 	products 	often 	emphasize 	that 	attribute 	in 	their 	marketing
campaigns. 	On the other hand, if such information is not of interest, then
the proposed disclosure will yield no benefits.ll
If 	BATF does 	mandate 	disclosure 	of 	calorie 	content, 	we 	suggest 	that
manufacturers be given maximum latitude with respect to the way in which
calorie 	content 	is allowed 	to 	be 	presented. 	Restrictions on 	the 	format 	of
disclosures 	may 	raise 	costs 	unnecessarily 	or 	make 	it 	less 	likely 	that
consumers 	will 	pay 	attention 	to 	them. 	If 	low 	calorie content 	is 	a 	selling
point, 	sellers 	are 	likely 	to 	know 	how 	to 	communicate 	this 	information
effectively 	to 	buyers. 	Therefore, we suggest 	that 	light beer manufacturers
be 	given 	considerable 	latitude 	with 	respect 	to 	the 	format 	of 	calorie
disclosure 	(in 	terms 	of 	both 	type 	size 	and 	placement 	on 	the 	label). 	If
consumers 	want 	calorie 	information, 	they 	can 	look 	for 	it 	on 	the 	label.
Unlike a health warning, it need not be conspicuous but only legible.
Before 	imposing 	a 	costly 	regulation, 	BATF 	should, 	as 	a 	first 	step,
determine 	whether 	a 	significant 	number 	of 	consumers 	would 	have 	any
interest 	in 	the other 	information 	mandated 	(carbohydrate, fat, 	and 	protein
11 	In 	some 	cases 	consumers 	have 	no 	"interest" 	in 	an 	area 	simply
because 	no 	information 	is 	available. 	If 	the 	government 	provides 	initial
information the public may like the idea and become interested in obtaining
more information on the subject. 	(For example, since the Surgeon General's
1964 	Report 	on 	the 	health 	consequences 	of 	tar 	and 	nicotine 	in 	cigarettes,
the 	public 	has 	become increasingly interested 	in 	this subject.) 	However, 	it
is likely that consumers are already reasonably familiar with the concept of
calorie content. 	As a result, initial disclosure of calorie content in beers IS
unlikely to stimulate significantly demand for further disclosure.
9

content). 	Such 	interest cannot 	be assumed, especially since fat 	and 	protein
content is essentially zero for all beers.
Although 	carbohydrate 	content 	varies 	somewhat 	between 	beers, 	we
suspect 	that 	it 	is 	not 	of 	great 	import 	to 	many 	consumers. 	In 	the 	1983
Consumer Reports 12 article on 	beer, for 	example, the main 	table comparing
beer 	on 	various 	dimensions 	included 	the 	calorie 	content, 	but 	no 	other
element of the average analysis statement. 	Presumably, the editors decided
that interest in calorie content was relatively strong, but that 	there was too
little 	interest in 	fat, 	protein and carbohydrate content to justify 	taking up
space in the table that could be used for more valuable information.
In 	summary, 	we 	see 	no 	evidence 	to 	suggest 	that 	consumers 	are
confused 	by 	the 	term 	"light" 	in 	the 	context 	of 	alcoholic 	beverages. 	In
addition, to the extent consumers want calorie information, we would expect
the 	market 	to 	produce 	it 	voluntarily. 	Therefore, 	we 	see 	no 	reason 	to
mandate calorie disclosure. 	However, if a disclosure is mandated, we suggest
that manufacturers be given substantial latitl2de with respect to format. 	In
any event, the rest of the average analysis statement should not be required
on 	"light" 	beer 	labels 	in 	the 	absence of evidence 	that 	consumers 	find 	this
information useful. 	Further, if consumers did find such information useful,
manufacturers 	would 	have 	an 	incentive 	to 	provide 	it 	voluntarily.13 	To
clutter up a label with valueless disclosures of fat and protein content may
increase 	the 	number 	of 	consumers 	who 	believe 	that 	labels 	a:-e 	not 	worth
reading.
12 	Consumer Reports, July 1983, pp. 342·347.
13 In the absence of 	market 	failure, 	manufacturers would 	provide 	this
information voluntarily.
10

Elimination of the Desh:nation "Light Wine"
BATF proposes to eliminate the designation "light" for wines containing
14 	percent 	or 	less 	alcohol 	because 	it 	believes 	that 	many 	consumers 	have
come to interpret the designation "light wine" to refer to a low calorie wine.
In 	addition, 	the 	designation 	"table 	wine" 	is 	equivalent 	to 	"light 	wine."
Because these designations are duplicative, BA TF believes that it may not be
necessary to preserve both designa tions.
As we 	have 	indicated above, we are not 	aware 	of empirical evidence
that a significant number of consumers are either confused or misled by the
mere fact that the word "light" has multiple meanings. 	Nor are we aware of
evidence 	that 	consumers 	are 	confused 	by 	the 	term 	"light 	wine," 	that 	they
understand 	the 	term 	"table 	wine," 	or 	that 	they 	know 	the 	two 	are
synonymous. 	Evidence on these issues might be obtained through copy tests
or market surveys. 	In 	the absence of such evidence we oppose elimination
of the designation "light wine."H 	Elimination of this designation will harm
any 	manufacturers who have developed 	brand name loyalty for 	their "light
wines." 	It will also harm consumers who are familiar 	with the designation
"light wine" and not aware that the designation "table wine· is equivalent. 15
14 	As 	we 	noted 	previously, even 	if 	evidence of consumer 	confusion
existed 	it 	would 	not 	necessarily 	indicate 	that 	a 	regulatory 	response 	is
appropriate or that 	the appropriate response would 	take the form of a ban
on the designation.
15 	BATF 	also 	seeks 	comments 	with 	respect 	to 	regulation 	of 	"light
sherry" and "light port." 	Here (as elsewhere) we suggest that BATF engage
in 	some 	copy 	testing 	or 	market 	research 	in 	order 	to 	determine 	whether
consumers understand 	these 	terms, and 	what 	the 	nature of 	the 	problem (if
any) might be. 	Such research will provide evidence with respect to the need
for regulation.
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, .
Low Alcohol Malt Beverages
BATF 	suggests 	that 	malt 	beverages 	containing 	less 	than 	2.5 	percent
alcohol 	be allowed 	to 	be 	labeled 	and 	advertised 	as 	reduced 	or 	low alcohol
malt beverages. 	We support this provision, because it will facilitate truthful
labeling, 	increase 	consumer 	information, 	and 	therefore 	improve 	market
efficiency. 	However, 	we 	suggest 	that 	(in 	addition) 	manufacturers of such
beverages 	should 	be 	allowed 	to 	disclose 	actual 	alcohol 	content 	at 	their
discretion.
Alcohol 	content 	IS 	presently 	a 	characteristic 	about 	which 	consumers
have limited information. 	We believe that manufacturers should be allowed
to disclose (and advertise) the alcohol content of their products, whether or
not 	the content is less than some threshold amount. 	Such disclosures could
be valuable to those consumers who wish to consume malt beverages but also
wish to avoid significant alcohol consumption. 	However, we understand that
this 	would 	require a 	statutory change 	because, in 	most circumstances, such
disclosures are prohibited by the Federal Alcohol Administration Act [27 USC
205(f)]. 	The proposed "low alcohol beverage" provision is a step in the right
direction.
Matters that BATF does not Propose to Regulate
We 	agree 	that 	BATF should 	not 	prohibit 	use 	of 	the 	word 	"light" 	for
beers with more than some threshold number of calories. 	Such a prohibition
would 	unnecessarily 	prevent 	manufacturers such 	as 	Piel's 	and 	Beck's 	from
continuing to designate their light-colored beers as "light." 	This would raise
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their 	costs 	by reducing 	the value of 	their existing 	brand 	name capital and
prevent consumers from benefiting from the use of familiar designations. 	It
might 	also discourage the 	production of beers with calorie content close to,
but above, the threshold.
BA TF also seeks comments on whether a "light" product should 	have a
maximum calorie content relative to the firm's regular product. 	We believe
that no such standard is necessary. 	One disadvantage of such a standard is
that it 	would 	prevent a 	company 	from 	offering a 	light 	beer 	unless 	it also
offered a 	regular one. 16 	It might also encourage manufacturers to increase
the calorie content of their regular beers.
We also agree that BA TF should not mandate calorie labeling for ill
alcoholic 	beverages. 	We 	see 	no 	evidence 	that 	such 	a 	rule 	is 	necessary.
Indeed, 	to 	the 	extent 	such 	information 	is 	valuable 	to 	consumers,
manufacturers with low calorie products already have an incentive to disclose
this information voluntarily.
Conclusion
We 	support 	BA TF's 	proposals 	to 	loosen 	current 	restrictions 	on
comparative 	advertising 	of 	certain 	alcoholic 	beverages. 	However, 	in 	our
view, 	the 	proposal 	does 	not 	go 	as 	far 	as 	it 	should 	toward 	allowing 	all
advertising that is not false or deceptive. 	We believe that allowing truthful
16 	If firms 	without a regular beer 	were exempt 	from 	this 	regulation,
then 	such 	firms 	might 	be discouraged 	from developing a 	regular 	beer. 	In
either 	event, 	this 	regulation 	might 	distort 	manufacturing 	decisions 	to 	the
possible detriment of consumers.
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comparative 	advertising 	will 	enhance 	consumer 	welfare. 	and 	make 	the
marketplace more competitive.
We 	are 	pleased 	that 	BATF 	does 	not 	propose 	mandatory 	calorie
disclosure 	for 	all 	alcoholic 	beverages. 	However, 	we 	do 	not 	believe 	that
calorie 	disclosures 	should 	be 	mandated 	for 	any 	beverages. 	There 	is 	no
evidence 	of 	systematic 	consumer 	confusion 	about 	calorie 	content. 	To 	the
extent consumers place significant value on calorie disclosures, firms already
find it in their interest to voluntarily disclose such information, particularly
if effective comparative advertising is allowed.
In summary. our analysis convinces us that consumers will benefit most
when government 	regulation 	of 	beer advertising is limited 	to 	prohibit only
false 	and 	deceptive 	claims. 	Sellers 	should 	be 	allowed 	to 	determine 	for
themselves 	what 	truthful 	advertising 	is 	of 	most 	interest 	to 	consumers 	and
what format is most effective in getting their attention.
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