UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 368-vHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFOREHEALTH COMMITTEE
ALCOHOL
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This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
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Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
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Oral Evidence
Taken before the Health Committee
on
Members present
Mr Kevin Barron, in the Chair
Charlotte Atkins
Mr Peter Bone
Sandra Gidley
Stephen Hesford
Dr Doug Naysmith
Dr Howard Stoate
Dr Richard Taylor
_______________
Witnesses: Mr Nick Gill, Account Planner, Five by Five, Mr Nick Constantinou, Managing Director, AKQA, Ms Roberta Fuke, Head of Planning, Bray Leino, gave evidence.
Q619 Chairman: Good morning. Welcome to the fifth session of our inquiry into alcohol. I wonder if, for the record, I could ask you to give your name and the current position that you hold?
Mr Constantinou: I am Nick
Constantinou; I am the
Ms Fuke: Roberta Fuke; I am Head of Planning and PR at Bray Leino.
Mr Gill: Nicholas Gill, Head of Digital Planning at Five by Five.
Q620 Chairman: Welcome once again. I suppose this question is to the two Nicks. Could you please explain to us what is meant by "new media" and how do you use this to advertise alcoholic drinks?
Mr Gill: New media is
basically digital communications. Digital has been around since circa 1991 but
has really escalated in the last ten years in terms of an advertising medium. To
give a sense of scale in terms of the amount of money that is spent in the
advertising industry, in 2008, which are the latest figures released by IAB,
the amount spent on advertising was 3.3 billion, which was up 17% year-on-year
versus 2007. On an advertising aspect it is down to search, display advertising,
classified and email. Again, to give that a sense of scale, the total
advertising for the
Mr Constantinou: Beyond the facts and figures that Nick has talked to, which are absolutely accurate in terms of the amount of spend we are seeing in the new media market, we utilise new media marketing for our clients to help engage and interact with consumers on behalf of our clients. It is an opportunity to have a two-way conversation with our clients' consumers. For Diageo specifically, when we create digital marketing assets we are governed very strictly by the Diageo marketing code, which from a top line applies the same rules for content and placement as we do across all other channels that Diageo market through, which is a very comforting thing to see for a marketing agency. Beyond that, they also include specific new media guidelines within that Diageo marketing code which we are expected to follow and, to continue Nick's point, we are held to very similar guidelines as other agencies, where we are expected to put up what we call a "gateway verification page" where age and location of said consumers are expected to be entered before you can enter the experience. We then have links to responsible drinking websites and other types of content. So there are some very strict guidelines that we are expected to follow, and that is from the creation of the concept upfront all the way through to the live solution that ends up online.
Q621 Chairman: We will be exploring one or two of them, I think, this morning. You said, I think (the first Nick), if I got this right, 19.2% is new media now.
Mr Gill: Correct; yes.
Q622 Chairman: How has that changed over the last few years? What was it four years ago?
Mr Gill: It has grown absolutely phenomenally. I mentioned the 3.3 billion statistic in 2008. To give you a sense of the rapid growth, in 2001 the expenditure was only 50 million, and that is driven purely by the amount of people that are going online to find information to inhabit that space.
Q623 Chairman: What proportion of your business is alcohol-related?
Mr Gill: Our business, WKD, our client, is approximately 10% of our revenue.
Q624 Chairman: And yours, Nick?
Mr Constantinou: We average between 3-5% a year with Diageo and our other clients.
Q625 Chairman: That is your alcohol account, is it, with Diageo?
Mr Constantinou: Yes.
Chairman: Okay. We will move on. Howard.
Q626 Dr Stoate: I will start, again, with the two Nicks. It is very interesting to hear that it is now about as big as television, new media advertising, and yet we were told last week by the Advertising Standards Agency that regulation is extremely lax in this area. Do you agree with that?
Mr Constantinou: I do not. I have had the privilege of working over 12 years in this industry and I have delivered a number of specific engagements for our Diageo client, and throughout the engagements we are held to very strict guidelines through the Diageo marketing code, which, in effect, you could term regulations. We are held to very strict guidelines from the ideation all the way through to the idea being actually live online in the new media sense. My experience today tells me that I have never ever been requested to do anything outside of the spirit of the letter of those guidelines, and the work that we have launched to date has strictly followed those guidelines at every turn and, throughout the creative process that we work through, there are DMC check-points and approval/rejection points.
Q627 Dr Stoate: I can assure you that today we will be showing you plenty of examples of where we do not agree with that. We may not be specifically referring to your company, but we will certainly come up with many examples as we go. Nick Gill, do you agree that the standards are too lax, or do you think they are okay?
Mr Gill: I think, as a brand and agency, the Portman Group is obviously focused around advertising as a whole to date, and a couple of years ago, in the absence of any strict guidelines on digital, we were actually very proactive in trying to raise the bar in digital terms by creating a code of conduct between ourselves and Beverage Brands of what we would adhere to. That has subsequently been issued as an addendum to the Portman Group code and Beverage Brands are now on a working group with the Portman Group to make sure that digital regulation is in force. We work, as Nick has said, absolutely to make sure that what we do is socially responsible and we promote "drink aware" as much as possible. Our content only reflects adult situations and socially responsible situations.
Q628 Dr Stoate: Again, we will show you plenty of examples this morning of where digital marketing completely breaches anything that we allow on television, and my colleagues will be going through that in more detail. I am also interested in your assertion that, because you have to put your date of birth in, we can somehow control access to children. One of our advisers said this morning, he put three random dates into a site. Two of those dates did not exist, because they were 29 February on years that were not leap years, and yet he instantly was let into the site. What confidence can we have that these so-called birth date entries are in any way policeable?
Mr Gill: I cannot comment for that particular technology example, but the technology should be able to pick up things like leap years and what exists.
Q629 Dr Stoate: It does not, I can assure you, because we have got examples of this, and it is not beyond the wit of most children to make up a date of birth which makes them sound as though they are 19 or 20. How are you going to police that?
Mr Gill: If they to do that and they wilfully lie to gain access to content, be that on an alcohol site or something more explicit than that, then that is their wilful choice to lie. The only way you could absolutely 100% guarantee it is to link it to a National Identity Register, or something like that, or we could lean on perhaps technology leaders such as Google to come up with some biometrics, but then that gets into a whole debate around personal data and privacy and that area.
Q630 Dr Stoate: You can understand why we are a bit cynical about it if all you need to do is enter a random date of birth that just happens to make you look as though you are over 18 and you are into the site. What possible protection does that give to parents or to young people who are vulnerable if the only entry criterion is a random date of birth?
Mr Gill: At the moment that is the accepted framework that everybody works to in the absence of anything that can control it better.
Q631 Dr Stoate: My initial question to you is: is that too lax?
Mr Gill: No, I do not believe so. From a responsible drinking perspective, we have very clear measures for responsible drinking. This site is for adults only, it is for those who are over 18, and the only way, in the absence of having formal identification - photograph ID, passports, et cetera - in that medium is to go on the date of birth. To pick up on your point about parents and giving them confidence: because it is registered as an adult-only site that only those that are over 18 can get into, it is picked up by all the parent control security. Interestingly, there was a survey by McAfee earlier this year, March 2009 - McAfee are one of the leading Internet security specialists in parental control - and four out of five parents do not use those controls. So we are giving, again, options to parents to limit exposure to their children but they are not taking it up. Four out of five do not turn that on.
Q632 Dr Stoate: Are you at all worried about the fact that children clearly are able to access this with no difficulty whatsoever? So far as you are concerned, that is fine; whether they should or not is irrelevant; you think it is okay that they do.
Mr Gill: No, because the content that is there is for adults only, and that is within the framework and the best working example that everybody has in the industry, not just in the UK or in alcohol, but globally, that is until such point where we can get national identity, perhaps, or biometrics scanning that actually proves that you are over 18.
Dr Stoate: That is clearly nonsense, because anybody can get access to it who wants to, even with a date of birth that does not exist. It certainly does not give me confidence. I think this committee will certainly be taking a view on whether we think the situation is tough enough. Thank you very much, Chairman.
Q633 Chairman: Roberta, the Advertising Standards Authority told us that regulation, too, was lax for advertising alcohol in the new media. Would you agree with that?
Ms Fuke: I take on board the comments that Nick has made as well. In terms of looking at a lax approach in terms of regulation, I think regulation is one aspect and, potentially, there are areas of consideration. I think everything that is done within the industry is done within guidelines. The guidelines are rigorous and responsible; both producers and consultancies and agencies like ourselves do abide by them. I think the other issue that needs to be taken into account is the one of content. In terms of what we are looking at here in terms of alcohol and consumption among young people, alcohol is not being talked about in terms of excessive consumption or encouraging young people to consume in any way that is inappropriate. The issue really becomes one of education, I think. We have to actually think about how we educate people going forward. Legislation has a part to play, but education, I think, is crucial.
Q634 Dr Taylor: Nick, can I pick up something I think you said? Did you say four out of five parents do not use controls?
Mr Gill: That is correct.
Q635 Dr Taylor: What controls are available to parents? I have still got a 16-year old that I had no clue I had any control over; so what controls are available?
Mr Gill: With a lot of packages that you get, for example, if you signed up to broadband with BT, they automatically provide you with some software that gives you parental control. In the instructions, and I do not know if it is particularly, but it should be very clear how you actually turn those parental controls on and every site that is of adult content should have a flag within the data of that site that says, "This is only for adult content". So when you turn that security on, it should automatically block that site.
Q636 Dr Taylor: I certainly knew I had a lot to learn! WKD: why ever did they choose those three letters, which obviously stand for wicked?
Mr Gill: It is only ever referred as to WKD. In terms of the history of the brand and how it came about, I honestly do not know.
Q637 Sandra Gidley: Does not the advert say, "Have you not got a wicked side"?
Mr Gill: No, it is always referred to as, "Have you got a WKD side?"
Q638 Dr Taylor: Am I right that every WKD product is vodka-based?
Mr Gill: Yes, apart from a new cider variant that has been launched recently.
Q639 Dr Taylor: What is the alcoholic content?
Mr Gill: It is 1.2 units per 275ml bottle.
Q640 Dr Taylor: So 275mls is 1.2 units?
Mr Gill: Yes.
Q641 Dr Taylor: It comes in 275ml bottles?
Mr Gill: A 275ml and also a 70cl screw-top bottle.
Q642 Dr Taylor: You have got on your desk Appendices for Briefing Session?
Mr Gill: Yes.
Q643 Dr Taylor: If you turn to page two, this is the Kev and Dave page that you have recently launched.
Mr Gill: Yes.
Q644 Dr Taylor: So this is available to anybody who goes on to the WKD site who is, allegedly, over the age of 18?
Mr Gill: Yes, to access WKD content you have to be over 18.
Q645 Dr Taylor: How is this operated? How is it updated?
Mr Gill: It is updated on a very frequent basis. The main campaign that you see in the middle there of the two characters, Kev and Dave, is something that we will be running for the duration of this year. That is our major digital engagement campaign that Nick was talking about earlier in terms of engaging our consumers. The news letter is updated on a monthly basis, which is both posted on the site and sent to opt-in consumers, all of whom, obviously, are over 18 as well. The blog is updated on a frequent basis, dependent on content that we have available and, something we may want to comment on, it is also housed only in our site. We do not use any blog platforms outside of WKD, because we, again, cannot control over 18s accessing that content in an environment that we do not control. The events are also updated as and when an event may happen. It is updated by a CMS system (Content Management System), which both we as the agency and the clients have access to, so we can update the content fairly rapidly and at low-cost for them.
Q646 Dr Taylor: So somebody who has seen this can then write in to Kev and Dave?
Mr Gill: The "Ask anything" is a one-way platform. So you ask a question and it identifies the key words within your question, using some technology at the back end, and then serves a video response, and we have recorded over 200 individual video responses that have a humorous, light-hearted tone to them and they give you answers to what you are actually asking for them.
Q647 Dr Taylor: Do you have any control over what gets out that is visible?
Mr Gill: Yes, we do. We only have content here. We also have a Facebook page for Kev and Dave which is restricted to only when they accept friends that have to be over 18 as well. That is the content that we have externally. We do not, for example, use Twitter externally to our site because, whereas with Facebook you can guarantee our friends are over 18, on Twitter you cannot. So whilst a lot of our audience is very much in that space, we have actively refrained from that because we cannot guarantee with the Portman Group guidelines that that would not be targeting or communicating with people who are under 18, so we actively do not go into Twitter.
Q648 Dr Taylor: So Facebook is safer then Twitter and Bebo?
Mr Gill: Bebo has an over proportion of under-18s, so we do not do any activity within Bebo. Facebook you can target, from an advertising perspective, those who are over 18. That is a service that Facebook provides. So you can target people absolutely in the demographic that you want to, so you can have zero exposure to those who are under 18, and the Facebook page that we have for Kev and Dave has a very limited profile until you actually become a friend, when you can then see the deeper level content. Again, the intent of that is to highlight the Kev and Dave campaign that we push people back to our main website at WKD.co.uk.
Q649 Dr Taylor: So the comments that come through to this you vet to make sure that they are okay.
Mr Gill: Yes, we only have
very few comments on there. User-generated content has been growing
phenomenally in the last couple of years: hence why there is a lot of
conversation and media talk about Facebook, and particularly Twitter of late
with the
Q650 Dr Taylor: What do you get when you open the WKD shop?
Mr Gill: You get to see a number of merchandise elements, that are WKD branded, that you can purchase.
Q651 Dr Taylor: And the credit crunch coupon?
Mr Gill: The coupon is a downloadable coupon that gives you money-off a purchase of WKD.
Q652 Dr Taylor: A money-off coupon in any supermarket?
Mr Gill: I believe so, yes.
Q653 Dr Taylor: So you are happy that under age people do not get easy access to this.
Mr Gill: We actively discourage them from entering the site, yes.
Q654 Dr Taylor: How can you be sure that Facebook is secure from under age people?
Mr Gill: Because to get a Facebook account you need to register your date of birth, which the vast majority of people do openly and honestly because it is a social network. The intent of it is actually that you network with your friends in the online environment; so to lie about your age does not make sense in that environment.
Q655 Dr Taylor: I am sorry to be dense, but does that mean a 16-year-old should not be on Facebook?
Mr Gill: Most 16-year-olds can be on Facebook. Anybody of absolutely any age can be on Facebook. The biggest growing demographic of people on Facebook is those aged 40-plus.
Q656 Dr Taylor: You have lost me. Why is Facebook safer than Twitter from your point of view?
Mr Gill: Because we know, from the registration data of Facebook, that they allow us to access. From the media perspective we can target exclusively those who are 18-plus, and from our Facebook fan page we will only accept friends who are 18-plus. If they do not have their date of birth entered or it is not in their public profile, we do not accept them as a friend.
Q657 Dr Taylor: So you are absolutely happy that nobody under the age of 18 could access this particular field that we have put on page two?
Mr Gill: This is our brand site, WKD.co.uk. Again, that comes back to the age verification page upfront. The Facebook page, again, we actively discourage people.
Q658 Dr Stoate: Can I interrupt there? I have just entered the WKD site with a fake date of birth, 29 February, on a year that was not a leap year, and I am into it without any trouble at all. Admittedly it is a bit slow, because 3G is not working very well in this room, but I am onto the website with no trouble, and it did not ask me any other details. A fictitious date of birth which did not actually exist and I am on your website no trouble at all. I can go onto all these things: the shop, the arcade, download Kev and Dave, the newsletter. It is not a problem. It did not give me much confidence, and if I had actually been only 12, I would have had no trouble at all getting onto this: it took me a minute.
Mr Gill: Yes, but the age verification process is the accepted standard in the industry.
Q659 Dr Stoate: It is not very effective then, is it? I asked you if it was too lax. I do not think that is very effective.
Mr Gill: If there was a more effective way of doing it, then we as an industry, and not just the alcohol industry, would be employing that. At the moment that is collectively what we believe is the most effective method of doing it.
Dr Stoate: I am not impressed, Chairman.
Q660 Stephen Hesford: On your site, Kevin and Dave, the actors that did that, how old are they?
Mr Gill: They were a minimum of 25. I believe the average age of the actors that we use across WKD communications, not just digital, but for TV commercials, is 28.
Q661 Stephen Hesford: Would you not agree that the actors on that web page there could be taken for younger than 25?
Mr Gill: No, because we research and we make sure, when casting, that we look at a range of people when we are looking at the age of our consumers and the actors we are looking for, and we specifically recruit and cast the people who look, at a minimum, 25, again, to discourage under age people.
Q662 Stephen Hesford: Further, I would not only say that they look potentially younger than 25 - I do not know which one is Kevin and which one is Dave - one of them, potentially, looks perhaps 18, or even younger. If your cut off has the entry age of 18, which Dr Stoate has just shown to be complete rubbish, and the industry standard is 25 and over and somebody potentially looks on the edge of 18, are you not entering dangerous territory for an audience which is actually too young to buy alcohol?
Mr Gill: These actors have been specifically cast. They were one of a number of people who we looked to recruit for this particular campaign and we stipulate to all the casting agencies that everybody has to be over 25 years of age. The average age of WKD casting is 28 now. These individuals are over 25. I am not sure of their exact date, but we can guarantee that they are over 25.
Q663 Charlotte Atkins: Roberta, you do public relations for WKD.
Ms Fuke: That is correct.
Q664 Charlotte Atkins: Do you get asked questions about the target audience? Do you feel comfortable with what we have discussed so far, that clearly the age limits do not seem to be a major focus for WKD and, therefore, could well attract under-age drinkers?
Ms Fuke: I would disagree that the age limits are not a focus for WKD; they absolutely are. They are very responsible. Producer - and I have worked in public relations for 25 years and have worked with some people who are not quite so scrupulous - says that a lot of legislation and a lot of guidelines are applied to all of the activity. The agencies are thoroughly briefed at the outset and are given, not only the Portman Guidelines, but Beverage Brands' own guidelines to comply to both in terms of content and in terms of targeting. So targeting is very clearly focused on adult drinkers, so of-age drinkers, and making sure that the content is appropriate. Also the content of the site and the content of all of the activity that we look at is something that needs to be considered a little bit further, because we are not focusing on the consumption of alcohol; the focus on our work is about encouraging people to share a sense of humour with the brand, if you like. So a shared sense of humour, slightly cheeky, slightly irreverent, yes, not encouraging people to consume the product. It is actually just about social situations. Having a laugh with your mates is an appropriate way that we tackle that in terms of communicating with audiences. So I appreciate what you are saying in terms of concern; I disagree that it is not being carefully managed.
Q665 Dr Naysmith: Mr Constantinou, can you explain what "viral marketing" is and how it is used for your campaigns?
Mr Constantinou: Yes, viral marketing, again, has been at the forefront of new media as it has grown over the last few years. It is an opportunity for us to engage with our clients' consumers. To play on Roberta's comments, to build on those, we do look for slightly humorous, engaging, compelling content that we can supply to our clients' consumers to spread the word of mouth around the good brand values of our clients, whether it be Diageo or any other alcohol brand. So it is, in effect, a piece of content that can be passed on from friend to friend and it can multiply the brand values and the knowledge of the brand amongst the target audience. Again, we are held to strict marketing codes by our alcohol clients, which happens to be Diageo in AKQA's instance, where that content has to be targeted at the above legal purchase age and, in my experience, that is what we have been doing for eight years and we have never ever been asked to target or have never created a piece of content, whether it be viral marketing or an online destination that we have been talking about, above the legal purchase age.
Q666 Dr Naysmith: Is it going to be more difficult to control than other forms, because you can pass the message on to anyone, can you not, once you are through?
Mr Constantinou: Yes, that is true, but because we can hold some of the content within the destination sites - so an address on the Web that we control, just like this website here and other websites that we have actually created ourselves - again there are some measures in play to stop under age audience accessing that content. So there are measures you can employ. To build on Nick's comments, which I agree with, Facebook tends to have an older demographic than maybe some other social networking sites such as Bebo, which we avoid religiously because we know the audience profile on that very popular networking site is of a younger spread.
Q667 Dr Naysmith: Do you use any network sites that have a younger spread?
Mr Constantinou: Not for alcohol brands at all. We have a number of clients within our office, some who do actively target a younger audience, but not for alcohol, obviously - that is for gaming clients, et cetera.
Q668 Dr Naysmith: I am going to come back to you in a minute and ask you
about your
Mr Gill: I would absolutely support exactly what Nick said in terms of how viral marketing is used. It can add extra brand value to your brand. If you create content that is compelling enough that people want to engage with and want to send on to their peer group - some recent examples, like the Cadbury's gorilla example that has been highlighted of late, where that content from a viral perspective was released online first before it was even aired on TV - it creates huge credibility and talkability for the brand.
Ms Fuke: I would agree with both of my colleagues here actually. I think the reality, again, goes back to objectives as well. So content, yes, and objectives, in terms of what the consultancies are being requested to deliver against, which is maintaining market share in a declining market. The market, from our point of view in the RTD market, is declining - a 55% decline in 18-25 year olds since 200 and a 12% year-on-year decline. So our objective and our brief, our challenge, if you like, is to maintain that market share in a declining market.
Q669 Dr Naysmith: I want to ask you about Smirnoff. You were given the
brief by Diageo to "Seed the
Mr Constantinou: Yes.
Q670 Dr Naysmith: How do you do it in this instance? What is the purpose of doing it in this instance?
Mr Constantinou: In this instance, the purpose of the brief that we received from Diageo was to amplify and extend what was a lot of money spent on quite an expensive TV campaign and to extend that campaign into the new media environment. That is the overall purpose. The brief, as you quite rightly said, stated "legal purchase age to 30", "male orientated", which is the brief that we took. We executed that, as you see from the sheet I have got in front of me, with a casual online game for that target audience. To explain why we created this digital asset: to meet that objective of extending the TV campaign. Casual online gaming: on average 200 million people a year globally are engaging in fun, simple, quick casual games. That is a fact - you can look that up yourself - and the split of demographics that are engaging with casual online games are pretty evenly split between male and female and from an age point of view, on average, in the mid-thirties. So as a vehicle to extend the TV campaign online, we viewed a casual game - if you read back the brief - as it hits the sweet spot over what we were trying to achieve with that audience.
Q671 Dr Naysmith: One purpose of the strategy was to send people to the Sea website to play the "Smirnoff Purifier" game. Is that right?
Mr Constantinou: Correct.
Q672 Dr Naysmith: And that resulted in entering a prize draw, and they were also asked to forward the game to their friends?
Mr Constantinou: Yes; absolutely.
Q673 Dr Naysmith: What sort of data would you collect from the players of the game and how is this data being used?
Mr Constantinou: To actually enter and access the game you have to go through the same verification age which has been discussed by the panel over the last few minutes.
Q674 Dr Naysmith: We are not too impressed with it, and I suspect most people hearing about it will not be too impressed either.
Mr Constantinou: I take that feed back on board. To access that game you have to go through that verification gateway and then you can access the game and you can play it without really providing much data. When you have to enter the prize draw for the year's supply, we follow, again, the Diageo marketing code, which has some specific terms, conditions and guidelines over which data to collect and which terms and conditions they need to accept, et cetera, which were implemented.
Q675 Dr Naysmith: What sort of data?
Mr Constantinou: I do not have that knowledge in front of me at the moment. I would rather not give you an incorrect answer.
Q676 Dr Naysmith: Just general type of data, was it: their drinking habits or that sort of thing?
Mr Constantinou: No, no. In terms of online behaviour or people interacting with online destinations, the one learning that we have all seen over the last five, ten years is that when you are asking users to submit an entry to a competition the last thing you want to do is create a form with 28 fields for completion; so we do try to keep it simpler and shorter and not ask too many questions.
Q677 Dr Naysmith: Can you tell me what kind of questions?
Mr Constantinou: It will be first name, last name, email address, probably reconfirm date of birth, et cetera, and there will be a list of terms and conditions, which, again, Diageo legal provide to us, which are in line with the marketing code guidelines, which you have to tick the box and agree to through an online form.
Q678 Sandra Gidley: You have mentioned codes of practice, the Diageo code and the other code. How do they differ from the advertising code which regulates what is allowed to be on television? They are clearly laxer because what is on the Internet would not be allowed on TV.
Mr Constantinou: My view of those codes is that our clients actually are a lot closer to the audience and the pace of change in new media, which is pretty intense.
Q679 Sandra Gidley: I am talking about responsibility now, not selling. How do your codes differ in, for example, the age range that you are allowed to target or sexual prowess that you are not supposed to put in a TV add and it seems to me that some of the stuff on the Net might flout that.
Mr Constantinou: The code and the guidelines to which I have been exposed follow the same rules across all channels. So Diageo make it very clear that we are expected to follow the same content and placement rules as they would expect of their above the line agency and new media agency and print agency and PR, etcetera.
Q680 Sandra Gidley: The difference is that nobody actually has any power to tell you off on the Internet, whereas with television adverts they do.
Mr Constantinou: Especially as we are talking new media, I think there is always a channel to be told off with new media because it is a two-way channel; so I would actually disagree with that and I think the new media and the online environment actually encourages the users and parents or whoever may not think it is appropriate as an open channel of communication, which I would actually say that when you are watching a TV ad for 30 seconds between Coronation Street, or whatever it may be, I believe it is easier in the new media environment to actually feed back to the producer of that piece of content to say that that is inappropriate.
Q681 Sandra Gidley: Would it be possible to have copies of those codes that you work to so that we can see how they differ?
Mr Constantinou: Absolutely, yes.
Q682 Sandra Gidley: Just to come back to new media, I want to pursue a couple of points that Dr Taylor made. On Facebook you do have to put your age in and most people would do that honestly, I think, unlike one of your drink sites, and you may be prohibited from accessing a Facebook drinks page but by the very nature of Facebook people would often publish links to other things that are external to Facebook. Say, for example, somebody who quite liked this game would be able to put a link to it on Facebook and their friends would be able to see it; they might click on, they might be under 18 and, as we have already seen, the age that you have to put into the site is meaningless. So in effect is not having a Facebook page also, if you think about viral marketing, quite an insidious way of spreading some of these messages further, because it is not about the politically correct Facebook page it is about the way that games and things like that are disseminated on Facebook.
Mr Constantinou: I think an online game or piece of content that people like could be spread in a number of ways, whether it be through Facebook or a conversation with somebody in somebody's living room, etcetera. There are guidelines in play - and I take the feedback around that they feel lax at the moment - to ensure that this piece of content as held within the new media environment, which is the Internet for want of a better phrase, is held within certain gateways and verification points to protect that. I think beyond that there is an important point that Nick mentioned that there are additional controls through the actual Internet browser that you use at home to access online content, which could be looked at as a way of strengthening those. I think there are multiple points to provide additional security to access that content.
Q683 Sandra Gidley: So it is actually down to the parents for controlling access - it is not your fault, is that what you are saying?
Mr Constantinou: That is not what I am saying; what I am saying is that you have to look at the entire solution and different methods you can use to provide the end goal.
Q684 Sandra Gidley: But you do accept that by launching an attractive game that particularly young men would want to play the whole way that this sort of information is spread via links on Facebook, you actually have no control whatsoever over that - you can just let it go?
Mr Constantinou: I think to be clear that game is targeted at legal purchase age and above and actually skews towards - it is a casual game on the ---
Q685 Sandra Gidley: Come on! It is a game that is apparently so intense that my son when he was 13 or 14 would have loved it! He would have loved it - shooting at things, by the look of it. How does that appeal to an 18 year old and not a 17 year old?
Mr Constantinou: Casual gaming is proven to be very popular with a 30 plus demographic and that is fact and I can only talk to my experience and what I have seen over the last ten years. This game has been created for that older demographic and well above the legal purchase age; and it is protected in an online destination with some controls around that.
Q686 Sandra Gidley: Which do not exist, let us acknowledge that. Nick, do you have anything to add to that.
Mr Gill: I would just like to add in there in terms of people sending information around that we are working very hard with the Portman Group on the working group in terms of making sure that digital space is ever evolving. It constantly changes and constantly creates new challenges. We work very proactively within the framework we currently have and we are working very actively with the Portman Group and our own internal guidelines from Five by Five and various brands' perspective to ensure that we can absolutely try and raise the bar in terms of digital controls to make sure that our content is socially responsible and only targeting those we only want to see it.
Q687 Sandra Gidley: But there are a lot of people who can see it on the Web. Can I just come back to Twitter? You say you do not use Twitter at all for advertising. Do any of you have any plans to use Twitter? I tweet and occasionally get followed by somebody called "Horny Hotty", which worries me greatly! I have no control over her and I keep trying to block her. But the nature of Twitter again people send share links about things they like, and again no age controls. Also, it could seed the potential for advertising but no age restrictions.
Mr Gill: Until such time as Twitter can guarantee from a Beverage Brands' perspective, in much the same way that we can do with Facebook, a date of birth, and therefore your followers and people you follow and people who follow you can be guaranteed over 18, we will not enter into that medium. You are right, that people can share links about anything on there if they so wish, but to further Nick's point once they click on that link there are the controls in place for them to gain access to it.
Q688 Sandra Gidley: Which are not very robust, as we have seen. So there is nothing to stop the whole viral networking; there is nothing to stop anybody disseminating these fun things which actually link to the site.
Mr Gill: Dissemination is one thing and getting access to the content is something completely different.
Q689 Stephen Hesford: To Nick, on this page, on your tank game "Win a year's supply of Smirnoff"; what is a year's supply of Smirnoff?
Mr Constantinou: It was a year's supply of red vodka which was calculated on three units a day, which I believe are the government regulations for safe consumption. The prize would be delivered at quarterly periods rather than a big chunk of the prize upfront. Obviously targeted at over 18s only and it is seen as a sharing prize - that was the purpose of the competition, for a game to enhance the brand awareness and people talking about the brand - to share that prize with their friends.
Q690 Stephen Hesford: But if it was calculated on consumption of three units a day per person ---
Mr Constantinou: No, it is one person.
Q691 Stephen Hesford: How could you share it with your mates? You would be a tight, mean character if you are getting a year's supply of three units a day for you; so how could you share it?
Mr Constantinou: We are promoting responsible drinking, but we are promoting responsible drinking by sharing smaller quantities on a less frequent basis.
Q692 Stephen Hesford: So this is a really mean campaign!
Mr Constantinou: That is not for me to comment on. Certainly from a marketing point of view and with our clients that was very much the correct volume we felt, again, that went back to the responsible and respectful marketing guidelines that we are legally contracted and expected to follow for Diageo.
Q693 Chairman: When this site talks about share a game or forward the game to friends, what is the mechanism for doing that? Do you just click on a button and put somebody's email address in? What is the mechanism of sharing it with a friend?
Mr Constantinou: A small form will appear on the website and you enter your names - first name, last name and email address, and more often than not you will be expected to tick a box confirming that you agree to the terms and conditions of doing so.
Q694 Chairman: Is that receiving it or sending it?
Mr Constantinou: Sending it.
Q695 Chairman: Because we have age verification going on to this site, we are assured, but how do you then sent it on to somebody else? What are you asking for as verification and by whom?
Mr Constantinou: What you are sending on is a link, a web address, and it arrives in your friend's email inbox as a web address with some nice copy, etcetera, around it. You click that link; you have to go back to the beginning of the experience and go through the verifications.
Q696 Chairman: So it triggers the verification from the receiver before they can actually play the game?
Mr Constantinou: Yes, it is not a direct hotlink.
Q697 Charlotte Atkins: Roberta, could you explain what sort of PR you do for Beverage Brands in respect of particularly WKD?
Ms Fuke: Of course. We were taken on earlier on this year to support WKD in terms of media relations activity, reinforcing the messaging around having a laugh with your mates but targeting the 18-25 year old age range. Focus is on targeting key consumer magazines, primarily things like Nuts, Zoo, FHM, Maxim, those sorts of titles which are for adult males, with content which is based around having fun, having a bit of a laugh - quirky humour - reinforcing our messaging that we are trying to deliver a number of objectives in our campaign; so our campaign is focusing on encouraging maintaining loyalty, so sharing that sense of humour and building a bond with the consumer.
Q698 Charlotte Atkins: So there is WKD and Nuts and also there is a football company as well, is there?
Ms Fuke: The support for the Nuts football award from our point of view is media relations, so news releases around those who have won the award. The awards are quirky; they are run through Nuts magazine.
Q699 Charlotte Atkins: Tell me a bit more about the football awards.
Ms Fuke: Nuts magazine is a partnership. WKD are partnered with Nuts; Nuts has an average age range of 24 years in terms of readership. 92% are over 18 in terms of the readership again, so it is absolutely targeted to our target audience. It is very football focused in terms of content. Football in terms of an aside, in terms of the award itself, about 35% is the current figure of 18 to 25 year olds play regularly and 54% watch sport in a social environment, so maybe with their friends at home or in a pub, for example. So it is an appropriate link for us as a brand. The initiative itself is irreverent, if you like, sporting awards - so best take out, a bravery award for the player who has managed to play on despite injury, the best bargain of the season, etcetera. The awards themselves are voted on by members of the public, again working through the Nuts magazine content, if you like; and our job from a PR point of view is to promote the winners.
Q700 Charlotte Atkins: I thought that there was some sort of ASA code which actually talked about not linking up with sport, sex and so on. Would that linkage not transgress those codes?
Ms Fuke: The initiative we are talking about is a sponsorship and the sponsorship is not focused on the brand itself but it is sponsorship of football awards and Nuts football awards are about sponsoring or encouraging people to engage with football and we simply support that and this sponsorship initiative is managed through equally important guidelines, so a marketing activity would be related to that in terms of content, style and tone.
Q701 Charlotte Atkins: But you are aware that there is a code which suggests - in fact forbids the association of alcohol with sporting success and with masculinity and sex.
Ms Fuke: This is not about sporting success and masculinity; this is awards which are irreverent that the fans make to the people who have played all through an injury or the best chant on the terraces.
Q702 Charlotte Atkins: So basically it is a way of linking up with football without transgressing the code?
Ms Fuke: I am sorry?
Q703 Charlotte Atkins: It is a way of linking up men's obsession with football without transgressing the code?
Ms Fuke: I do not believe it conflicts with the code, no.
Chairman: Could I thank all three of you very much indeed for coming along this morning and helping us with this inquiry.
Witnesses: Ms Charlotte Thompson, Director, BJL, Mr Joseph Petyan, Joint Managing Director JWT, Mr Chris Morris, Chairman, Big Communications Group and Mr Andrew McGuinness, Chief Executive, BMB, gave evidence.
Q704 Chairman: Good morning, could I welcome you to the Committee of our fifth evidence session on our inquiry into alcohol. Could I ask you to give us your name and the current position you hold, for the record, please?
Ms Thompson: Charlotte Thompson; I am a director at BJL.
Mr Petyan: Joseph Petyan; I am a joint managing director at JWT London.
Mr Morris: Chris Morris; I am chairman and head of planning for Big Communications.
Mr McGuinness: I am Andrew McGuinness, a partner and director of Beattie McGuinness Bungay.
Q705 Chairman: Welcome. This is a question to all of you but we have specific questions for specific individuals. Last week the British Medical Association joined calls for a complete ban on alcohol advertising. Are you at all concerned about being associated with a product which, by the Royal College of Physicians' estimation causes something like 40,000 deaths per annum?
Mr Morris: Shall I start? Obviously there is concern and we take our responsibilities in the marketing of alcohol extremely seriously and there are, I believe, some robust regulations in place. But I would say that I do not think it is alcohol per se that causes 40,000 deaths - I would have to suggest that it is alcohol abuse, and as an industry we are very concerned to ensure that nothing we do actually feeds alcohol abuse in any shape or form. Personally I believe that the advertising industry is strongly regulated and we work extremely hard to ensure that we adhere closely to those regulations.
Q706 Chairman: Does anybody have anything to add?
Mr McGuinness: I would agree. We are in the business of responsible drinking and it is irresponsible drinking that leads to those deaths. We work very, very hard within the ASA and BCAP codes but also on behalf of Carling we are extra stringent to ensure that we are absolutely associated with responsible drinking and in putting forward those messages.
Q707 Chairman: When you talk about alcohol abuse, Chris, do you measure that in terms of units or what?
Mr Morris: I think in many ways, but we are conscious that the government cites the alcohol issues in probably four categories - under age, long term harm and so on. There clearly are differing categories of alcohol issues.
Q708 Chairman: Presumably it will be on current consumption as opposed to consumption over 30 or 40 years; what you call abuse would be in that category, would it?
Mr Morris: Primarily, but we do know that there is long term harm which is an issue as well.
Q709 Chairman: What proportion of your revenue is related to promoting alcohol and what effect would a total ban on advertising alcohol have on each of your businesses?
Ms Thompson: It is around 3%.
Mr Petyan: The industry as a whole, the figures in 2008 it was approximately 220 million, I believe, of the published numbers to the industry as a whole. So that represents 1% of the advertising market in total.
Mr Morris: For our particular business around 15% of our revenues.
Mr McGuinness: For our business less than 12%.
Q710 Dr Stoate: This is a question for all of you really. The ASA can require you to remove a campaign if it breaches their guidelines. But how realistic is the sanction? Does it ever affect any of you?
Mr Petyan: It has not affected my agency personally or me personally, but it is in my view an extremely effective sanction. As the Committee will be aware, marketing support numbers many millions of pounds and for us to have a business relationship with our clients it is incumbent on us to be as responsible in our marketing as we possibly can. So to have an ad removed results in wastage of marketing monies, which is therefore detrimental to the client's business and to our business.
Q711 Dr Stoate: But by the time it has been removed it has already been on for several weeks and you are easily able to switch it to new media. So how much of a real loss would it represent?
Mr Petyan: I am not aware of the periods you are talking about because there can be exceptional fast tracking and removal of adds and one of the key fundamentals of pre-clearance in broadcast advertising is that the media companies work with us in the broader industry to refuse to air commercials that have not been pre-vetted and pre-cleared by the relevant authorities.
Q712 Dr Stoate: We will come up with examples where we are sure that that is not a blanket situation, but we will come back to that later. Given that there are quite tight restrictions on advertising and particularly things like you are not encourage immoderate drinking, you are not allowed to encourage the view of sexual powers or attractiveness linked to any particular alcohol, do you think that the rules are about right or are they too restrictive?
Mr Morris: The rules changed for us. The Ofcom regulations came in in 2004, 2005, as I am sure you know. That made a sea change to the WKD advertising and that is not to say that we were in any way disrespectful of the rules prior to that, but we were well within the legislation and the rules that appertained at the time. I think those rules actually helped and were welcomed in the sense that it creased a sea change and they clarified some issues about humour and the concerns about humour spilling over to under aged people that we do not wish to attract. That has caused us, I think, to change our advertising in a positive way. Every single consumer advertisement we produce is pre-vetted and is mandatory in terms of broadcast advertising, but on a voluntary basis for press and posters through the CAP. We find that process useful and helpful and it keeps everybody in check and I think it is doing a good job. We have never been complacent and in the future they will always stand for review and modification and will work to whatever modifications come into play.
Q713 Dr Stoate: Do you have a different view to that or is that broadly shared?
Ms Thompson: I would agree with that. I think that the advertising industry in
the
Q714 Dr Stoate: Do any of you have anything to do with sports sponsorship and running campaigns with sports clubs?
Mr McGuinness: Carling as a brand do; we are not directly involved in that but Carling as a brand do.
Q715 Dr Stoate: What do you feel about a brand being on the front of football shirts that is obviously then accessible to anybody at any age?
Mr McGuinness: It is not an area that we give them advice on. It forms a part of their communication but it is not a large part of the communication.
Q716 Dr Stoate: You do not know anything about the size of the budgets or how much of an impact it has then?
Mr McGuinness: It is difficult to quantify the impact of that sort of thing, but it is not an area that we directly advise them on, no.
Q717 Dr
Stoate: You cannot comment on the fact, for
example, that
Mr McGuinness: I cannot comment on
Q718 Dr Taylor: To all of you, first of all, do you recognise the term "kidult advertising" and what do you understand by it and what do you mean by it?
Mr Morris: I became familiar with it for the first time at last week's session so it is not common currency language for me, but I can assume that what is implied by it is that there is advertising where ages get blurred - in other words, it may be advertising for an adult product that could erroneously appeal to young people or conversely messages to young people that could appeal to older people.
Q719 Dr Taylor: So you would absolutely agree that it is impossible to have an advert that would appeal to 18-year olds and not to 17-year olds?
Mr Morris: That is a tough question. The regulations for alcohol advertising are in place for a very good reason and there are controls in place for the media and placement of messages and particularly for the content, which is the area I am involved in. That content is designed to appeal fundamentally to in our case 18 to 25 year olds in a diminishing market category and we do everything possible to push our messaging and tone and identification on our audience to the upper end of that group to move away from that fringe area.
Q720 Dr Taylor: Any other comments about the term, or is it a new term that was coined last week?
Mr McGuinness: It is not a term with which I was familiar before, until the transcripts for last week.
Q721 Dr Taylor: Moving on from there - it is really Charlotte and Joseph because we are going to talk about the Lambrini campaign for the moment. Page 4 of the brief you have in front of you shows a diagram mapping out the female drinks market using target group index data and in the bottom left hand quadrant it includes ages 15 to 24. So why ever did the campaign include data of women under the legal drinking age?
Mr Petyan: I would just like to point out, as I mentioned to the Clerk of the Committee, that this document refers to Cheethambell JWT, which is a sister agency of ours based in Manchester; so that is a separate legal entity and I have absolutely no involvement with them. So accordingly this is the first time I will have seen this document and I am not aware of any of the history with Lambrini. I just wanted to make that clear.
Q722 Dr Taylor: So you are not involved with Lambrini?
Mr Petyan: I am not involved - JWT London has never been involved; it is a
separate sister company, a separate legal entity that exists in
Q723 Dr Taylor: Would you agree, not having been involved, that including the age 15 to 24 group really implies that these people are looking at that age group and how to target them, particularly with Lambrini, which is the sort of thing that does appeal particularly, we believe, to girls and particularly to youngish ones?
Mr Petyan: I honestly cannot comment because I was not involved with this, save one thing which is that this appears to me, just looking at the footnote, to be their qualitative conclusions summary. So it would appear to me to be the result of some qualitative research which is an analysis of some raw data gleaned from focus groups with potential customers and people in society. So that would be my only observation on this, that it is internal non-communicable research analysis.
Q724 Dr Taylor: And again nothing to do with you?
Ms Thompson: The document is not but I am very happy to comment on Lambrini's targeting of age groups. We were employed by Halewood International to look after the Lambrini business last year and therefore have started their campaign planning for the current work - this is back in 2006. But our campaign planning targets 18 to 24 year olds, and it is worth saying that 48% of Lambrini drinkers are actually over the age of 35. If you look at the consumption of the product it is actually a product that is consumed by - the larger portion - over 35s. It is a C2D audience with predominantly an income of under £17,000; so it is a value product that appeals to everyday women and certainly our targeting and the content that we create is targeting over the age of 18.
Q725 Dr Taylor: Being ignorant on market research, how do you know that it is 48% of people over the age of 35?
Ms Thompson: There is a survey called Target Group Index, which is a national
independent survey which advertises and their agencies consult regularly to
look at their target audiences and segments. Target Group Index is a survey of
25,000 people throughout the
Q726 Dr Taylor: So you get it from that. Turn over to page 5. One is supposed to ensure that people depicted are not under 25 or looking under 25. How do you ensure this because the people on those particular pictures certainly look to be under 25? How is this enforced?
Ms Thompson: I am happy to comment on this. This predates our involvement; we have taken on the campaign posters' activity. But the guidelines that we follow we have to have all of the casting that is involved in the advertisements that we produce pre-approved. So not only does the copy and what we sell get pre-approved but the casting and who we feature in advertisements. It looks like what you are referring to here - and again this is not evidence that we have submitted - is movies that have been uploaded by customers. You would have to be over 18 to access the site through the age gate regulation that you have spoken about in the last session. But you would have to be over 18 to enter a competition as well. I do not know if that was the case in this instance but certainly they would have had to state that they were over 18 in order to apply for the competition.
Q727 Dr Taylor: But uploaded videos could show people under the age of 25 and there would be nothing against that.
Ms Thompson: Certainly representing Lambrini now we would never do that and I cannot comment on this particular instance because I do not know. The images are very small, plus I do not know the specific age of the women that were involved. I imagine, working very closely with Halewood who always insist that we stick to the letter and the spirit of the code, I would be very surprised if they were under that age.
Q728 Dr Taylor: So you feel that there are controls now that would mean you would prevent uploaded videos showing people of doubtful age coming on to see.
Ms Thompson: Yes.
Q729 Dr
Stoate: This was accessed on
Ms Thompson: It was accessed, sorry?
Q730 Dr
Stoate: This slide was accessed on
Ms Thompson: So it is current content.
Q731 Dr Taylor: Thank you for pointing that out; so it is still there.
Ms Thompson: If it is still there all I am saying is that our agency did not create the content; so I can give you a point of view that I do not think any under age drinkers should be depicted on any website, but from this I cannot see that they are under age drinkers.
Dr Taylor: I think we have Halewood coming next.
Q732 Chairman: Chris, when Richard asked you this question about the issue of is it possible to ensure that an advert that appeals to an 18-year old does not appeal to a 17-year old, you said that it is a very difficult question. Can I ask the other three witnesses, do you think it is a different question as well and what would be your answer to it?
Ms Thompson: It is undoubtedly clear that teenagers aspire to be older and that
is an age old thing - when I was a teenager I aspired to be older as well. The
alcohol industry in its industry is very heavily regulated, however, and it is
not just the post
Q733 Chairman: That does not answer the question of whether you think you can pitch an advert that appeals to an 18-year old but not to a 17-year old. That is the real issue.
Ms Thompson: The reason it is compulsory to feature casting adverts that are over the age of 25 is the industry's attempt to get around that, I think. It is difficult to appear 17 if you are in fact 25.
Q734 Chairman: Joseph and Andrew, would you agree with that?
Mr McGuinness: Our target audience we start at 25 to 34 as the key target audience for Carling and the casting seems exactly right and we apply that principle and also to our media bank to make sure that there is no room for error.
Mr Morris: I would also say that with particular regard to the work we do with Smirnoff it is a premium brand we are working with and so the younger the audience the less premium in field that would have so it is in our interests to keep above 25 in our depictions of characters and so on, as my colleagues have said.
Q735 Dr
Naysmith:
Ms Thompson: I am happy to address that issue and to make the Committee aware of the chronology of events. We were approached by the television, first and foremost ITV, to see if we had any brands that would like to sponsor this programme. The sponsorship process is a bidding process so a number of different brands submit a proposal to be considered by ITV, who are regulated by Ofcom, and also by the programme makers, in this instance Endemol. We submitted a price and a rationale for why Lambrini should sponsor this programme and were successful in that. Part of the proposal that came to us was also to have further associations with Coleen Rooney. We predominantly sponsored the programme because I guess we felt that the brand attributes of the programme mirrored the brand attributes of Lambrini: that is, it supports everyday women in their aspirations to achieve the people who are featured in the programme - the real heroes of the programme, if you like, are the everyday women that get the opportunity to do something that they would not ordinarily have; these are everyday working women. Coleen Rooney hosts the programme and we considered very carefully our association with the programme itself because the programme host is under 23.
Q736 Dr Naysmith: The point - if you do not mind me interrupting - is that Coleen is under 25 and is known to be under 25 and that really is the point.
Ms Thompson: CAP gave us the advice that we should not feature the image of Coleen Rooney in consumer advertising and the image of Coleen Rooney has not featured in any consumer advertising. So any consumer activity, which is our responsibility on behalf of Halewood, has not featured Coleen Rooney and the advert that you have in your documentation is actually a trade press advertisement that Halewood International produced to go in The Grocer magazine, and The Grocer magazine targets retailers and the advert was placed in order to get retailer support to stock the products in advance of what promised to be a successful consumer campaign.
Q737 Dr Naysmith: Does it appear on any websites anywhere?
Ms Thompson: The image of Coleen Rooney does not appear. The Lambrini sponsors Coleen's Real Women that does appear on consumer websites and we proactively approached ITV and CAP to get guidance on this very issue. So any advertising or digital activity that is targeting consumers, that is produced by BJL on behalf of Halewood and features Lambrini, sponsors Coleen's Real Women, the programme. An interesting additional point on our website through a number of different magazines we ran a consumer survey to see what our consumers felt a real was and to nominate who they felt was a real woman. Over 1000 people responded over the age of 18 and they nominated Dawn French, and the reason that they said Dawn French was their ideal real woman was that because she was straightforward and she had a good sense of humour, and those are the values that Lambrini embodies.
Q738 Dr Naysmith: So you feel that you have stuck by the rules and you have not in any way attempted to overcome that?
Ms Thompson: I do.
Q739 Dr Naysmith: If I can ask you about something that happened in 2007 with Lambrini - I am not sure what your relationship was then. Clearcast - that is the organisation that clears adverts for transmission - told Lambrini that their strap line "Lambrini girls just wanna have fun" was unacceptable and had to be changed because it implied "women under 18 getting drunk on cheap alcowine". You are familiar with that ruling, are you?
Ms Thompson: I am familiar with that ruling.
Q740 Dr Naysmith: How can it be acceptable that adverts using this strap line are still being streamed through the Lambrini website?
Ms Thompson: Any of the advertising material that we have produced - the consumer facing line for Lambrini is now "Do the Lambrini" - we take the codes very seriously and I can assure you that nothing that the agency has produced carries the line "Lambrini girls just wanna have fun". The website you are referring to, which I am familiar with, is the corporate website. We had a campaign website, which is "Do the Lambrini"; on the corporate website there is an archive of old adverts. I am not sure what the statistics are in terms of who accesses those adverts, but as in many corporate websites which is predominantly for trade consumption the archive and the history of the brand is documented. Those ads I know are not downloadable so you cannot access them and put them on your own computer but you can see them there.
Q741 Sandra Gidley: A question to Joseph. If you could look at page 8 there is an image from the Sidekick campaign. It that your responsibility?
Mr Petyan: No. I am afraid it is as per my previous answer; it is nothing to do with JWT London.
Q742 Sandra Gidley: Did we get it wrong or did your company deliberately send the wrong person along who cannot answer any questions?
Mr Petyan: I have been in lengthy correspondence with the Committee over a long period of time since the initial requests were made and we have given all the information and assistance that we can to this point where I am attending today.
Q743 Sandra Gidley: Perhaps you can comment anyway. This Sidekick advert starts off with 5.30 at night, "Pop to shops on way home from work. Buy shots on impulse. 6.30, get ready for a night out and get in the mood. 7 p.m. Drink at home to start night off. Neck a few shots between beers/wines." Later on at 9.30 "Do shots in between rounds. 11.30 p.m. Too full for pints so turn to shots. 3 a.m. Home to bed?" It does not question whether the bed is actually at home or in hospital really. You may not be able to comment on any responsibility for this but do you think that that complies with the code about which we have been hearing, that you will encourage responsible drinking?
Mr Petyan: Again, you have partially answered my question for me. I would say personally that in my remit and in our company's remit and the work that we do for Diageo - and this is work, I must stress, I have never seen before and we have not done - we adhere very strictly to the rules and the engagement that is laid out both in the Diageo marketing code and also in the BCAP and CAP rules of engagement and we take that extremely seriously. I refer back to my previous answer at the outset, which is that it is a severe detriment to us as a business were we to fall foul of those codes by reputation and commercially, so to me I have no input on this, but it is something that we would not have produced based on the rules of engagement that we have with our clients.
Q744 Sandra Gidley: So this is obviously produced behind the scenes. This is a power point presentation so it did not appear on the Web, but it clearly indicates the sorts of thinking going on behind the making of an advert, surely?
Mr Petyan: You raise an important point because again I have no knowledge of this particular issue or screen grab whatever it is and I do not know anything about its genesis but what I can say is that you have raised an interesting point about what goes on internally because the series of processes, the checks and balances - and I can show you the depth of the Diageo codes that every supplier agency works to and the processes which look as complicated and detailed as that, but they are all in place to ensure that anything that does take place - it should not, but if it does - then it is only internally and it never reaches the general public, and that is the intent behind the code.
Q745 Sandra Gidley: But there is an important point that these internal documents actually are very illustrative about the real thinking and the real motivation behind some of your campaigns, so by the time they reach the consumer they are diluted, but obviously if you are a creative industry you would be doing yourself a disservice if you said that you could not creatively work around some of these backroom briefs to produce an advert that gave the right impression.
Ms Thompson: If I could respond to that? Looking at this, it looks like a power point document that was produced in May 2005. Since BJL were employed by Halewood last year they have asked us to look at some strategic repositioning work for Sidekick, which should be in your evidence submission as well. With both that and Lambrini our brief is to ensure that responsible drinking is encouraged and Sidekick as a product is no longer available in shot format as it was back then. There were a series of new regulations that were brought in in 2005 and if you look at advertising pre-2005 and post-2005 the content is distinctly different, and I think rightly so. It sticks to the rules and this sort of thing would never happen now.
Q746 Sandra Gidley: So in essence you are saying that it has interest as an historic document?
Ms Thompson: Yes.
Q747 Sandra Gidley: And it would never happen now?
Ms Thompson: It would never happen now, and I confidently say that you have seen our Sidekick strategy and that is all about thinking of Sidekick not as a shot product but as a product that you can use in different circumstances; so it might be as a long drink to be diluted with a soft drink, it might be as a cocktail ingredient. But it is now in a 500 ml screw top format so it is not presented as a shot drink.
Q748 Sandra Gidley: We will move on to what is happening now. If you look at page 10, this is WKD. Which one of you is responsible for that - Mr Morris, I think? This again I think is a power slide but we have a brand WKD and 45% of volume men and the bottom point says, "Importance of advertising and campaigns to communicate maleness and personality." Is that not against the code?
Mr Morris: No. I can see where your point comes from but this is quite different from the concept of the advertising that we create under the codes. This is internal discussion again; it is based on research; it is based on the market descriptions and it is simply saying that in a category like RTDs there are female drinkers and there are male drinkers and when brands differentiate themselves in order to gain a market share from their competitors some brands may choose to be more female orientated with their brand personality and other brands, like WKD, will try to be male in its orientation on that brand personality. That is what that is saying; that the maleness of the brand personality needs to be borne in mind in the communication and not promoting any kind of male prowess of anything like that. The rules would not permit that, the company code would not permit that; the Beverage Brands code would not permit that - it is not an area we would ever go into. It is simply the brand personality description for an internal discussion on targeting.
Q749 Sandra Gidley: But surely that feeds into how you try and portray the product. So you may not have WKD TV ads portraying masculinity or laddishness but the website, much as in the way that Charles and Dave or Kevin and Dave or whoever it was, it was clearly a laddish approach.
Mr Morris: We describe that target audience as social lads and we make no bones about that and in our description of social lads we are in touch with the 20-something market of today. We are trying to reflect our brand as being in touch with that market; that we resonate with them and we share their personality, share their sense of humour, basically. Social lads are everyday working guys or they may be university students. They like to socialise, they are heavily into socialising and that is an important part of their world as guys. They like to go out with their friends; they like to go to the cinema or to go to the pub, and this really is the description and it is keeping our thinking on track in having that audience in mind when we create this brand and when we create the communication of this brand, in line with the regulations.
Q750 Sandra Gidley: If you turn to page 11 there is something called a "big creative brief". Point 4: "What do we want our audience to think, feel or do? I tend to drink WKD during a night out as a change of pace when beer is getting a bit much for me." Is that promoting responsible drinking?
Mr Morris: Again it comes back to the difference between - this is an internally created brief, as I am sure you are aware, an internal document to help our creative teams get the idea of what we are trying to communicate. This is actually a description of what we would like our audience to think. We are aware that RTD and not just WKD has a functional use as described by our users in that sometimes after a couple of drinks of lager they may try an RTD product to clean the palate or for a change of pace - as a description of it. This comes from research into the actual way of life users. It was not what we want to propagate and certainly it was not the kind of message that you will see anywhere in our advertising and if we ever tried to do anything it would not be permitted and quite rightly so.
Q751 Sandra Gidley: But it is not overt, it is covert is it not because let us start from the basics. The drinks industry would not go out of business but would be considerably the poorer and the advertisers would be considerably the poorer too if everybody drank responsibly. So there is no incentive for the drinks industry to genuinely want to have people drinking responsibly. Some of the material we have seen that are backroom briefings for the advertising industry clearly show this. You have to keep your customer happy within the code, so is it not the case that you are ever more being forced to think creatively about how to portray some of these laddish drinking fun images within the spirit of the code?
Mr Morris: I would say absolutely not. The industry has every incentive - every
incentive - to encourage to people drink responsibly and indeed takes actions
towards that. We as a brand have worked with the
Q752 Sandra Gidley: How many times has a WKD advert been the subject of a complaint and being found to have breached the code?
Mr Morris: In nine years of television advertising we have produced 32 TV commercials and we have had two upheld complaints under alcohol laws. Both of those were commercials made pre the Ofcom regulations that I referred to earlier. We were given permission, approval to rerun those commercials post the Ofcom changes, whilst producing new commercials. We had complaints about those two ads and those complaints were upheld. Those are the only commercials under alcohol rules and there have been no upheld complaints since then.
Q753 Chairman: Can I ask you, Chris, because the strap line across there is, "What do we want our audience to think, feel or do?" Would you not want your audience to think that if they get to a situation where "beer is getting a bit much for me" to stop drinking?
Mr Morris: Yes. But realistically this is focused on a job. We are an advertising agency with a client and our job is to help enhance their market share.
Q754 Chairman: As a beer drinker - or an ex-beer drinker really - the idea that I would want to clean my palate after a beer has got too much for me with a spirit-based drink is a bit beyond belief, quite frankly, with all respect. I just find that no matter what the advert says if this is what the backroom is what are we to think?
Mr Morris: Again, it is painting a picture for our creative people to understand the market and the consumer to whom we are communicating. It is a picture of some people in the real world of 20-something behaviour. But we are not in any way ---
Q755 Chairman: I accept that entirely but I am not sure whether it should be encouraged.
Mr Morris: I am not encouraging it because that communication absolutely does not encourage it; our company does, Beverage Brands codes, the ASA codes absolutely forbid encouragement of excessive consumption.
Chairman: We do understand what the codes say.
Q756 Stephen Hesford: Cheethambell, JWT - you are JWT.
Mr Petyan:
Q757 Stephen Hesford: And you are managing director.
Mr Petyan: Joint managing director, yes.
Q758 Stephen Hesford: What relationship does JWT London have strictly with Cheethambell JWT?
Mr Petyan: Shared ownership through WPP, the holding company.
Q759 Stephen Hesford: What is your share of Cheethambell JWT shared ownership in relation to your company?
Mr Petyan: WPP owns both companies. Whilst JWT
Q760 Stephen Hesford: So Cheethambell JWT is wholly owned by your company of which you are the managing director.
Mr Petyan: JWT is a global brand; it is a global advertising communications business. It has over 200 offices worldwide.
Q761 Stephen Hesford: So who is your parent company?
Mr Petyan: Our parent company is WPP.
Q762 Stephen Hesford: And of WPP what percentage of that are you?
Mr Petyan: To be entirely frank I have absolutely no idea; I would have to come back to you with the answer on that, what the percentage is.
Q763 Stephen Hesford: It just seems to us - and it may seem to others listening - that the fact that you say you cannot comment on what for us would be quite significant adverts just does not seem believable.
Mr Petyan: I refer back to my previous answer in that I have been in lengthy correspondence with this Committee and the Clerks for a period of two months and we have supplied I believe over 2000 emails and many, many documents as requested, which pertain to our dealings with Smirnoff specifically and Diageo.
Q764 Stephen Hesford: You must have known then that we wanted to talk about Cheethambell JWT?
Mr Petyan: No, I only found out yesterday. I phoned the Second Clerk of the Committee in the morning and the first I heard of the fact that Cheethambell had been engaged in this process was yesterday morning. Indeed, when I spoke to colleagues internally yesterday and found out this news, because it was a surprise to me - it had never come up in any previous correspondence that I had had with the Committee - and my colleagues asked me whether I had by the same token shared the fact that I was supplying evidence and our company in London was supplying evidence to the Committee and we had not shared any information with Cheethambell because they run as a completely separate operation and it did not occur to us, I am afraid, to communicate with them. So it was only yesterday morning that this matter was even raised.
Q765 Stephen Hesford: Do you have a share option with JWT London?
Mr Petyan: Personally?
Q766 Stephen Hesford: Yes.
Mr Petyan: Yes I have share options as part of my remuneration.
Q767 Stephen Hesford: Do you have share options with WPP?
Mr Petyan: Yes.
Q768 Stephen Hesford: So you are a shareholder then of Cheethambell JWT, are you not?
Mr Petyan: Effectively I am awarded stock based on performance as part of my remuneration.
Q769 Stephen Hesford: Are you a shareholder of Cheethambell JWT?
Mr Petyan: I do not believe I can be. I would have to check the specifics but I am awarded shares as part of my remuneration in WPP, which is the overall holding company for many hundreds of companies around the world.
Q770 Stephen Hesford: Is it of interest to you that one of your sister companies under your group of companies has adverts like this which were being questioned by Sandra Gidley, which have issues that you felt unable to deal with today? Does it concern you that there are issues?
Mr Petyan: First of all, that is not an ad; I thought we had established that it is not an ad. It appears to us at any rate to be an internal document so it is internal stuff and it is part of a process that has taken place in a company that is a separate legal entity to my own. So I have to be honest, I cannot comment on it beyond what I have said already.
Q771 Dr Stoate: Andrew, let us talk about some of your campaigns. It says specifically in the code that you must not use the suggestion that success of a social occasion depends on alcohol. If you turn to page 12 of the briefing it does fairly explicitly say in there that when "Carling is with them and their mates they have better times". So is that not another way of saying that alcohol is relevant to improving social results? Is that not advertising social success as a result of alcohol?
Mr McGuinness: Again I would draw the distinction between internal documents and what that turns into. For Carling we have not even featured someone drinking or consuming alcohol for five years in any of our advertising, let alone directly fall back on that sort of comment. I think the truth about the target audience that we are target is 25 to 34 year old males, as I have said before. They do spend a lot of time together; they spend a lot of time together at football, they might shop together, go to the cinema together and indeed do go the pub together, and they do spend time together and Carling is part of that time they spend together. Our communication though is not focused upon the way in which that audience consume the beer, it is focused upon, if you like, holding up a mirror to those people and reflecting the sociability and camaraderie that they feel within their group of guys.
Q772 Dr Stoate: Going to page 13, to "Carling's Ten Commandments", they start off with "Thou shalt never abandon your mates in favour of a girl; though shalt never leave a game early; though shalt never miss a round." Is that not implying that anyone who refuses a drink or thinks that they have had enough is a wimp and therefore should not be part of the team?
Mr McGuinness: I have not seen this document. The header here is Hill & Knowlton who are the PR advisers to Carling. I know that particularly for Carling we apply very stringent criteria to our communications. It is a family business, and to the point earlier on about the code regulation is very strict within this industry. But equally one has to look at where your client is and what the values of the organisation are for whom you are working, and for Carling the value of the organisation as a family business is very important to them. Certainly this is not a piece of communication that I have seen before or can comment on in detail. But I do think it is important to bear in mind that not only our compliance with the code but what is in our best interests as an organisation because of the values of the organisations that we work for, and for multiples that is a very, very important consideration.
Q773 Jim Dowd: You have not seen this before, you are not the author of it, but what is your reaction to it?
Mr McGuinness: To be honest I am answering questions as you are citing from it and I have not had chance even to read it.
Q774 Jim Dowd: You are a professional in these matters; you are not just somebody who has not just walked in off the street, you deal with this for a living.
Mr McGuinness: That does not make me any quicker at reading than you or I.
Q775 Jim Dowd: This is your business, this is your livelihood.
Mr McGuinness: This is not my business or my livelihood; this is someone else's document relating to their business and their livelihood. However, my view would be that it is not a document that we would produce as an organisation.
Q776 Jim Dowd: So you do not agree with the thrust of it?
Mr McGuinness: I think it not in tune with the values of Molson Coors as a family business and that is an important element to them, and it is not in tune with where we are taking the Carling brand, which is to 25 to 34 year old males. What we are doing with Carling is growing its aspirational qualities. Again, to some of the points earlier on it is important to recognise what is going on in the wider market here. The beer market, for example, has declined by 25% over the last 30 years and so we are talking about a market that is in significant decline. I think there is an assumption within some of the questions that we are talking about a burgeoning market and that we are looking to somehow burgeon that market further, and certainly for a brand like Carling we are in the business of making sure that people would prefer to have Carling than another beer. We are trying to build a brand affinity and not a beer affinity.
Q777 Jim Dowd: But is not one of the reasons that beer is in a decline, as you allude to there, that all the effort is going into selling other forms of alcohol?
Mr McGuinness: I would not feel able to comment on why that is, but there are a number of complex reasons why beer is in decline.
Q778 Jim Dowd: Such as?
Mr McGuinness: I could give you a view but it is not my area of expertise. I think the role the pubs play within our society and there are a number of things which are contributing to the decline of beer.
Chairman: Could I thank all four of you very much indeed for coming along and assisting us with this inquiry.
Witnesses: Mr Andy Fennell, Chief Marketing Officer Diageo, Mr Simon Davies, Director, Molson Coors (Carling), Ms Deborah Carter, Marketing Director Beverage Brands (WKD) and Mr Graham Oak, Director Halewood International Limited, gave evidence.
Q779 Chairman: Good morning and welcome to what is our fifth day of taking evidence on our inquiry into alcohol. Can I ask you for the record to give us your name and the current position you hold?
Mr Davies: My name is Simon Davies; I am marketing director of Molson Coors.
Mr Fennell: I am Andy Fennell, chief marketing officer for Diageo.
Mr Oak: I am Graham Oak, marketing director for Halewood International.
Ms Carter: Deborah Carter, marketing director at Beverage Brands.
Q780 Chairman:
I have a question to all of you. You will be
aware that the Royal College of Physicians estimate that the number of deaths
caused by alcohol misuse in the
Ms Carter: One of the first things we would like to pick up on, particularly with regard to an advertising ban, one of our overriding thoughts would be that an alcohol advertising ban would not actually stop people going out to pubs on a Saturday night, having alcohol with their barbeques or dinner parties. So I think one has to look at the wider marketing mix of alcohol. Additionally there are other alcohol categories that are not big alcohol spenders but actually see strong growth. The wine industry would be an industry in which we have seen some phenomenal growth in the last 15 years but in relative terms has actually been a small alcohol spender. So you have seen that there are lots of different dynamics in the marketing mix that could affect that. So we would say that you would have to look at all the elements together and an advertising ban would not really help. We would also be worried about the potential unintended consequences of that and might it push some producers to shift some of that money in their competition to gain volume share into more price activity, not necessarily in terms of depth of deal but maybe frequency of it.
Mr Oak: Adding to what Deborah has said, ultimately the advertising industry is heavily regulated already. Price and advertising are just but two elements within that and if you ban advertising you then have to look at all the other elements like PR, sponsorship, etcetera and there is no guarantee and no evidence to state that if you ban advertising you will prevent misuse, which is ultimately what we are all here talking about today. I think in terms of minimum pricing, yet again it has been clearly documented that pricing can help reduce per capita consumption - I think that came out in the Sheffield Report, but it did not say that it could help reduce misuse. One of the concerns I particularly have with regard to Lambrini is that Lambrini is consumed by everyday women, hardworking women and a lot of those women are on a low budget - 62% of them earn £17,000 a year and I would have the concern that minimum pricing could make alcohol become quite an elitist product, and that is not the case and should not be the case for people drinking it responsibly.
Q781 Chairman: But it is a lot cheaper now in real terms than it was 30 years ago for all social classes, is it not?
Mr Oak: I cannot comment on that in terms of the numbers.
Mr Fennell: The majority of the British people drink alcohol responsibly and I
think we should acknowledge that, and there is some misuse - specifically underage,
binge drinking and some older males who drink too much at home. I believe we
need to tackle the issues that we face in our culture. I think we should tackle
them with targeted rather than population wide activities. So with specific
regard to advertising restrictions we have a strong code and we need to live by
that code and we need to make sure that that code is up to date. I do not
subscribe to further restrictions because I do not think it will work against
the issues that we face. If you look at the experience of some countries which
have more liberal advertising regimes and lower incidents of alcohol misuse,
places like
Mr Davies: If we were to first of all to acknowledge absolutely that alcohol is not like other categories. We work for a family business and we recognise and we take our responsibilities very seriously. Alcohol is a category that needs to be treated with a great deal of respect. We believe that advertising has a role to play in the building of that respect by building long term brand relationships with our consumers and building those brand reputations. We also agree that education has a role to play and we believe that price has a role to play in the building of respect for alcohol.
Q782 Chairman:
You have all said that banning advertising
would not have the effect in terms of binge drinkers but what effect would it
have on sales? What lessons can be learned from the restrictions of alcohol
advertising in countries like
Mr Fennell: Yes, we have and we should learn from our experience from all around
the world. The evidence suggests that advertising does not have an effect on total
consumption whether it is present or not. The trends when legislation has
changed have broadly stayed the same. Indeed, the total alcohol market in this
country has been flat or declining for years. Our job and the role of our
advertising place is to take business off each other. It is a zero sum game. All
of our advertising should promote, as Simon said, responsible consumption and
it is intended to win market share. As a result Smirnoff only constitutes 3% of
the market here in the
Q783 Chairman: Anything to add on sales and what happens in France, Deborah?
Ms Carter: We have also looked at the French example and I believe that the
official evaluation was inconclusive. We also do trade in the
Mr Davies: I cannot comment on any more information specifically with regard to
Mr Oak: The only thing I would add, the point has been made about Andy
Fennell about the actual law in
Q784 Chairman:
You say that the weight of
Mr Oak: My understanding from the Sheffield Report where it was more conclusive was that if you introduced minimum pricing you reduce overall consumption of alcohol; it will not necessarily prevent the misuse of alcohol.
Q785 Charlotte Atkins: The industry always talks about how they want to support responsible drinking but clearly as an industry you benefit from excess drinking because obviously your profits are affected. Have you worked out that if drinkers kept to government drinking guidelines how much you would actually lose in your revenue as companies? Because if you look at the figures in 2007 alcohol sales were high enough to put virtually every British adult over government guideline drinking levels.
Mr Fennell: It is not a calculation that certainly we have done but what I can
say is that we want a society where everybody drinks responsibly. Actually a
couple of ways of thinking about it, I mentioned
Q786 Charlotte Atkins: You do not have figures in terms of your sales revenue in terms of adults keeping to drinking guidelines, but do you have any idea at all what proportion of your sales is accounted for by binge drinking sessions? Do you have any indication of that?
Mr Fennell: I do not have any data on that.
Mr Davies: Data of that nature would be very difficult to collect.
Q787 Charlotte Atkins: Simon, you have been involved very much with this Project 10, the alcohol industry's response to government pressure to address irresponsible drinking. Does that mean that your company is in favour of minimum pricing?
Mr Davies: Any public position that we have taken previously - and certainly I would reiterate that, so it is not a new position for us to make, we have talked about it over the course of the last 12 to 28 months.
Q788 Charlotte Atkins: So when did you adopt your position of being in favour of minimum pricing?
Mr Davies: It has been primarily based on our experience within the Canadian
market. Molson Coors is a business that has a market share in
Q789 Charlotte Atkins: Could you elaborate or would you have to go to your managing director about the Canadian market because clearly there is not minimum pricing in every part of the Canadian market.
Mr Davies: No, there is not.
Q790 Charlotte Atkins: Are you able to elaborate on that?
Mr Davies: My specific knowledge is to a degree limited and my responsibility
is to the
Q791 Charlotte
Atkins: We would certainly be interested in
looking at your position in relation to your experience in
Mr Oak: I believe that minimum pricing will reduce overall consumption but I do not believe that it will prevent the misuse of alcohol. As I say, with particular regard to Lambrini it is very much positioned and sold to everyday hardworking women. Many of those women drink it very responsibly - 88% of them drink less than one bottle a month. A lot of those women are on incomes of less than £17,000 a year. And for them it is a lower alcohol alternative; it is 40% less units than a bottle of table wine. I think if you were to create minimum pricing that then put alcohol out of the reach of certain elements of society when they are drinking responsibly it is quite dangerous and you start to make it almost elitist.
Q792 Charlotte Atkins: What about you, Deborah?
Ms Carter: Minimum pricing, if we look very specifically at our business and our brand it would not actually from what has been suggested so far affect our business. WKD especially and RTDs in general are actually very expensive. WKD's cheapest is 77 pence a unit, which actually is as expensive as Chablis - not that everybody would maybe believe that, but it is. So in terms of minimum pricing from what has been said so far it really would not affect our business.
Q793 Charlotte Atkins: That is not what I asked; I asked if the company was in favour in minimum pricing, not whether it would affect your business.
Ms Carter: We would say that minimum pricing on its own we do not feel would be an appropriate step forward; there would have to be a lot of alcohol education to go with it for it to have any effect.
Mr Fennell: We do not support it simply because we think that we should focus on the mis-users and those vulnerable to misuse and we have not yet seen any evidence to suggest that minimum pricing will tackle the issue at hand.
Q794 Charlotte Atkins: So it is okay to have water being sold at a more expensive price than some of the cheap lagers and ciders in supermarkets?
Mr Fennell: The key issue we face today is how do we tackle the minority of British people who misuse alcohol or who are vulnerable to misusing alcohol? In that context population wide activities I do not think will work.
Q795 Sandra Gidley: A quick point on the Lambrini. If you walk round almost any town it seems to be quite a favourite of underage teenage girls, so would not minimum pricing help reduce that market? You probably do not make an assessment of what teenagers drink because they are not supposed to be drinking.
Mr Oak: We do not support or promote drinking to underage girls. For many of those people that you described that may be drinking alcohol very often that alcohol has been purchased by someone else. I do not believe in that sense that you are talking to the consumer or the purchaser of the alcohol, so price has a different bearing in that instance.
Q796 Sandra Gidley: So who buys teenage girls their alcohol then?
Mr Oak: The people to whom you are referring ultimately are under the legal drinking age and therefore cannot buy alcohol legally, so it is going to be purchased by people of legal drinking age - I do not know who they might be.
Q797 Sandra Gidley: I think there are people who purchase to order.
Mr Oak: We know that that happens in the
Q798 Jim
Dowd: Mr Davies, you say that you are in
favour. Depending on how minimum pricing were to be introduced, if it was
simply saying to companies that they had to charge a minimum amount for this
then all it would do is increase profits. Is that what has happened in
Mr Davies: I think it is very difficult to assess the impact that it could have
on it commercially; it would entirely depend on what the pricing would be. In
principle Molson Coors would support further investigation of minimum pricing;
we believe that it may form part of a solution. As we stand at the moment we do
not have a developed view on what that minimum pricing should be and indeed
exactly where it should be applied. But from our experience in
Q799 Jim Dowd: Was that the case before and if so has that been subsequent to the introduction of minimum unit pricing?
Mr Davies: It is my understanding that it has had some impact but my expertise in that area is probably not to the full satisfaction of this Committee. We can certainly provide people who know more about that market than I do.
Q800 Jim Dowd: Mr Fennell, your objection to minimum unit pricing, representing the largest alcohol purveyor in the country, could it be based on the fact that you believe you can produce alcohol cheaper per unit than anybody else and if there was minimum pricing you would lose a competitive advantage?
Mr Fennell: Our products are not sold at low prices anyway; we only sell premium products, we do not provide own label products. The commercial impact of minimum pricing would probably be neutral. It may be positive, as you suggest, and my comment is more about the effect of minimum pricing on tackling the issues of misuse and the belief I have that we need to focus on the mis-users, the minority that misuse or those that are vulnerable to it.
Q801 Jim Dowd: You alluded to another point that was raised to us last week - and we have the supermarkets coming in later in the inquiry and we will speak to them - and you say that you only deal with own brands. Where as a professional in the business do the big supermarkets - the big four particularly - get their own brand alcohol from, because we have not been able to establish this yet?
Mr Fennell: I confess I do not know.
Q802 Jim Dowd: They do not run their own stills, do they?
Mr Fennell: No, of course they do not. I do not know if the other guys know the answer, but all I know is that Diageo does not produce any own labels.
Mr Davies: I am in the same position; we do not produce own label.
Jim Dowd: So it just appears to drop out of the sky!
Q803 Chairman:
The question was posed by
Mr Fennell: We will certainly look at that. It is worth saying that the per capita consumption data, which is widely available, shows that on average the consumption is below guidelines. So that is for the average, which would conflict with the source you were just quoting. But let us do some more work on that.
Chairman: Could you do that because if this is a societal measure that is about right then there are issues around this that we all want to look at.
Q804 Charlotte Atkins: Presumably that figure includes people who do not drink, so we are not talking about an average, we are talking about all British adults. That is not just those people who actually consume alcohol - we are talking about averaging it over all British adults, not just the people who actually drink alcohol.
Mr Fennell: Let us break it down for you.
Ms Carter: There will be different categories - people drink at different times during the week and different occasions. We know from our example that if we sell two bottles of our product to a particular consumer in one night that is as much as we are going to do. So you would have to join up all of the examples because some categories would not see that much of a decline in their volumes but others might. So you would need to piece that altogether.
Q805 Dr Taylor: Let us focus on the misusers, which is absolutely right. We have to focus on the misusers. In your submission you have listed who they are. How do we focus on them? How do we get at them? How do we control them?
Mr Fennell: That is a great question.
Q806 Dr Taylor: Yes. Have you an answer?
Mr Fennell: I will give you a view. It is a complex issue because it is deep in
our society. Educational efforts are going to be key because we need to
persuade people that misuse of alcohol is not cool in any way. Educational
efforts need to start at school age. That could not be conducted by anyone on
this panel but we do fund through for example the Drinkwater Trust activity, so
education is a big part of it. I also think we should enforce rigorously the
high level of regulation that we already have in the
Q807 Dr Naysmith: Mr Fennell, you have said a couple of times that your job is to pinch trade off each other, especially with there being a declining market, giving the impression that this problem is maybe going away slowly and you are competing for the small amount of trade that is going to be available. If you look at the statistics underneath, it is much more complicated than that because a lot of people who are drinking are drinking more than they used to, which may mean there are fewer people drinking overall if you analyse the statistics to find out, but there is a significant proportion of people who start drinking, as you were implying, for social reasons and so on, because it makes life go a bit better and all that sort of thing. We do not know which proportion of them are going to be the ones who develop a problem when drinking becomes a problem for them. That is really the reason why we are looking at this inquiry. Of course binge drinking is one aspect of it. A much more important aspect is the increase in liver disease and various other diseases associated with over-consumption of alcohol. If we are going to stop this, we have to intervene probably before people start drinking, education for youngsters which you just mentioned, and either teach them to drink responsibly or do not encourage them to start at all. That is the age group probably that we should be focusing on. The question I was going to ask is to do with these new media. Ofcom published research last year which found that almost half, 49%, of 8 to 17 year olds who use the internet have set up their own profile on social networking sites. These are very popular sites. How can you be confident that people under the age of 18 are not able to access or actively contribute content and spread it around, as we heard in the previous session? How are you going to be able to control that? It is really not controlled very well at all by the current regulations. Would it not be much better if we just banned all advertising to young people and any outlet which could reach young people if we could do it?
Mr Fennell: There is quite a lot in the question. The nub of the issue is focusing on the people for whom there is or might be an issue. That does put an emphasis on getting the right mindset in young people's heads before they start drinking. I agree with that.
Q808 Dr Naysmith: Or not encourage them to drink at all?
Mr Fennell: Or indeed encourage them to make a choice about their own lifestyle which may include not drinking at all. I agree with that. There is no safeguard that provides a silver bullet, which is why we come at it from multiple directions. There was a conversation this morning about Gateway pages. For most people, I think they are honest about their age. That is a safeguard but if that was the only one it would be unsatisfactory.
Q809 Dr Naysmith: If you are the ones who are seeking alcohol, you probably will not be honest.
Mr Fennell: Another safeguard is our content requirements. Someone needs to be over 25 and certainly for Diageo the content of materials for the web needs to comply with exactly the same stringent requirements as content for traditional media. Our internal code is very tight in that regard.
Q810 Dr Naysmith: It is very tight but it is quite easy to get round it, we seem to be hearing, in lots of different ways.
Mr Fennell: I do not understand.
Q811 Dr Naysmith: For instance, sometimes when there is a complaint about an advert on television it can take two or three years before it is withdrawn. I know there are emergency procedures but sometimes it takes ages to do it.
Mr Fennell: I did produce something which I hope helps the Committee. It looks complicated until you go with it and maybe I can pass it to you. It is our flow chart which explains our code. What it shows is we have five internal reviews for all media whether it is digital or traditional. We take advantage of pre-clearance where that is available and we comply with ultimate sanction removal if that happens. I am pleased to say that does not happen very often. Diageo's policy would be that if it was non-compliant with one media part of the code it would be with all media, because it is the same code. I do support the broadening of backstop, independent adjudication to ensure that everyone complies with the same set of rules.
Q812 Dr Naysmith: You think that Diageo are now complying in the same way with new media as you would do with other media?
Mr Fennell: Absolutely. I insist on it.
Q813 Dr Naysmith: Is that the same for all of you?
Mr Davies: I will not repeat what Andy has just gone through because the
controls and internal processes that Molson Coors run are pretty much exactly
the same. If I could take one area which was a topic of quite a material
discussion that I was hearing earlier, that was with regard to Gateway and age
declaration in terms of sites. Our sites use the same Gateway declarations as
other people's and I am sure they are subject to the same challenge of, if you
are going to lie, you are going to lie. I would fully accept that, but in
common with pretty much all of our marketing activity we also monitor the
impact it has. We do things post as well as put the safety markers in place. If
I were to take the Carling.com website, it is one of the larger alcohol
websites within the
Q814 Dr Naysmith: I imagine you are using these new media more and more. Is that growing?
Mr Fennell: Yes.
Q815 Dr Naysmith: That is going to be the case in the future?
Mr Fennell: Commensurate with how consumers are changing their behaviour.
Mr Oak: With regard to new media, in terms of advertising and advertising on sites, specifically we only advertise and the rules are that we can only advertise on sites where 75% of the audience is over 18. That is independently verified. For the sites that we have advertised Lambrini on, a minimum of 88% of the consumers are over 18.
Q816 Dr Naysmith: That means 25% are under.
Mr Oak: I accept that point.
Q817 Dr Naysmith: There is always going to be an overlap, is there not?
Mr Oak: Yes.
Mr Fennell: That is why we need multiple safeguards.
Ms Carter: Today we have touched on the challenge that all age related
categories have and I do not think this is just the
Q818 Stephen Hesford: Mr Fennell, in what way does the Diageo code which I have not seen but which has been spoken of considerably this morning differ at all from the CAP codes on advertising for alcohol?
Mr Fennell: It is consistent. The code in the exact form of words is a consistent code for Diageo around the world. The first provision in our code is to make sure that we comply with local regulation. The form of words and the meaning you can draw from them is consistent on every item.
Q819 Stephen Hesford: Do you subscribe to not only your own internal code, as you described it, but the CAP code on advertising alcohol too?
Mr Fennell: Yes.
Q820 Stephen Hesford: Roughly in its form now, how long has your internal code been in existence?
Mr Fennell: I am not sure exactly but four or five years.
Q821 Stephen Hesford: Therefore, the CAP code and your code deprecate linking drinking with drunkenness?
Mr Fennell: Yes, that is right.
Q822 Stephen Hesford: It deprecates linking advertising alcohol with toughness, bravado, that sort of stuff?
Mr Fennell: That is right.
Q823 Stephen Hesford: That would be completely unacceptable to your company?
Mr Fennell: Yes, that is correct.
Q824 Stephen Hesford: Can I ask you to look at the pack that you have at page 14? Appendix three, drinks manufacturers. That is clearly identified as Diageo.
Mr Fennell: Yes, it is.
Q825 Stephen Hesford: The central theme is potency.
Mr Fennell: That is right.
Q826 Stephen Hesford: Why?
Mr Fennell: Can I explain?
Q827 Stephen Hesford: No. Please bear with me. Answer my question. Why potency?
Mr Fennell: In order to answer the question ----
Q828 Stephen Hesford: No. Please, just answer the question. Why potency?
Mr Fennell: I need to explain what it is.
Q829 Stephen Hesford: I know what potency is.
Mr Fennell: This is a document which ----
Q830 Stephen Hesford: Please, just answer the question. Why potency?
Mr Fennell: This had no impact on any consumer communication. This was screened at stage one. I handed out the code. At stage one this was rejected as irresponsible. It is irresponsible. It led to no consumer communication. I brought with me the communication that was the campaign that we ultimately used.
Q831 Stephen Hesford: The campaign was the Smirnoff Maxability programme.
Mr Fennell: The communication was a drink called Smirnoff Appleback which is a mix of Smirnoff, apple juice and ginger ale. It is 1.9 units of alcohol, which is less than a pint of standard lager. We train all of our people to have the code front of mind all of the time, agencies and internally. The reason that we have five stages of regime where we filter at every stage and reject things is because we cannot rely on that training. This was an internal discussion document which was rejected at the first stage. It was rightly rejected at the first stage because it is irresponsible.
Q832 Stephen Hesford: Can we just examine what was rejected? We hear what you are saying about it. "Image. Drinking this involves bravado or challenge." You specifically said that Diageo will not go anywhere near that.
Mr Fennell: We have not.
Q833 Stephen Hesford: How did it see the light of day, if that is a core belief?
Mr Fennell: It has not. It was an internal document which was rejected.
Q834 Stephen Hesford: How could this happen if it is an internal, core belief of the last five years?
Mr Fennell: It was rejected at stage one. I had not seen it before the last couple of weeks. I asked when it was rejected and the answer was at the first review.
Q835 Stephen
Hesford: "Russianness. Anything from
Mr Fennell: It did not. This document is an example of why our code is strong because somebody in their wisdom put this together and it was rejected at stage one, and it should have been rejected at stage one, because it is not compliant with the code.
Q836 Stephen Hesford: "Flavour. More flavour, e.g. PPS." I will not even go into what that is. "Feminine. Challenging flavour, e.g. JD and Co. Masculine." That is not permissible, is it?
Mr Fennell: No, it is not.
Q837 Stephen Hesford: Is there anything in this document which is permissible, just looking at it?
Mr Fennell: This page did not go anywhere. It was rejected at stage one.
Jim Dowd: How were you advisers so poorly informed? This clearly does not accord with any of the priorities you have.
Q838 Stephen Hesford: Who gave them this brief? Which Diageo company gave them this brief?
Mr Fennell: I do not know where this document came from. What I do know is that it was rejected as a thought at stage one on the grounds of it not being compliant with the code. There is no actionable insight that came from it and the consumer communication which ultimately was displayed in bars was a picture of an apple and "Try Appleback." I agree with you that this is a waste of time.
Q839 Stephen Hesford: It is a disgrace. Would you agree that it is a disgrace?
Mr Fennell: It would be ----
Q840 Stephen Hesford: Would you agree that it is a disgrace?
Mr Fennell: It would be if it led anywhere. It demonstrates the strength of our code, I am afraid. That is all I can say about it. Someone wasted some time and we rejected it at the first pass. I am disappointed that they wasted their time.
Q841 Stephen Hesford: Can you turn over to page 15, please?
Mr Fennell: It is another example of exactly the same thing.
Q842 Stephen Hesford: Smirnoff is a brand of yours?
Mr Fennell: Yes, it is.
Q843 Stephen Hesford: You would describe it as a premium brand?
Mr Fennell: Yes, I would.
Q844 Stephen Hesford: I think one of your advertisers described why they would not do certain things because they wanted it to be aimed at a certain market with respectability. Would you agree with that?
Mr Fennell: Yes.
Q845 Stephen
Hesford: What is described as 3.2, which I
presume is some kind of presentation, is, "
Mr Fennell: We do not. This is consumer research. It led to no actionable insight and no consumer activity. I have to say that on the request of the Committee we sent everything in our files, including most of the stuff at the beginning of the process. This is unfiltered research. It led to no actionable insight and no consumer activity. That is what our process is intended to do. It is not helpful. It does reflect what some consumer behaviour is like and that is what we need to change.
Q846 Stephen Hesford: Are you saying that you became social scientists? You had to research the behaviour that you did not like in order to then advertise the behaviour you did like? Is that what you are saying, credibly?
Mr Fennell: The company that did this research is an independent company. They would have gone to talk to men about their drinking behaviour and they came back with, I hope, some insights that were actionable. They also came back with this one which looks like a waste of money to me, because I cannot do anything with it. This reflects the fact that we have a societal issue, a cultural issue, that we need to tackle. No consumer communication at all could have been, would have been or was a result of this.
Q847 Stephen Hesford: Can we go to the slide underneath at 3.8? "What are Pub Man's needs at this point?" Tell me if I have this wrong: am I accurately describing what this document looks like? It has an erect ape man with a pint in his hand. Is that right?
Mr Fennell: Yes.
Q848 Stephen Hesford: It has a slightly more erect person?
Mr Fennell: Yes.
Q849 Stephen Hesford: And then a slightly more erect person and then it describes Alpha male who is flat on his back, which suggests to me drunkenness.
Mr Fennell: It does to me too and that is why it is useless in the pursuit of marketing alcohol.
Q850 Stephen Hesford: Reading from left to right from the ape man, the pub man, I am reading from the slide that we referred to before: "Comfort zone." That is the guy in his own pub. It refers to the mission. What possibly was the mission here? The mission is just under where the guy is slumped out on the floor, drunk. What was the mission?
Mr Fennell: Not surprisingly, I have never seen this because it did not help us. Nothing actionable came from it.
Q851 Stephen Hesford: I can accept it is not helping you.
Mr Fennell: No actionable insights came from it and there was no consumer communication as a result of it. It is an independent researcher's observation drawn from talking to people.
Q852 Stephen Hesford: Why is it branded with Smirnoff if it was just some person somewhere else?
Mr Fennell: It is an internal presentation to the people at Smirnoff.
Q853 Stephen Hesford: Who are you?
Mr Fennell: Who are me, yes, absolutely. This led to no actionable insight. It led to no actionable communication. Our code is strong.
Q854 Stephen Hesford: Do you accept that they breach all the codes absolutely?
Mr Fennell: If somebody used this information to produce consumer communication, it would breach the code. We did not and we would not.
Q855 Stephen Hesford: All you can say is that you spent Diageo shareholders' money on this complete waste of time for no purpose at all?
Mr Fennell: I hope that this research company came up with something that was a bit more useful, because otherwise you are right.
Q856 Stephen Hesford: Mr Davies, Coors is one of ----?
Mr Davies: Do you mean Coors like the brand?
Q857 Stephen Hesford: Yes, and Carling. Can I take you to page 16? I know you will say it is a work in progress because it says that there. "Position Statement." Again, you abide I understand by the advertising code?
Mr Davies: Yes.
Q858 Stephen Hesford: Which does not permit bravado and all that sort of stuff. "Down to earth lads who love life in the pack. Carling is the range of lagers that are almost always the most drinkable so when Carling is with them their mates have better times because every Carling lager is brewed to have the most appealing taste, not too fizzy and not too sweet, no matter what the ABV." ABV is dealing with strength, is it not? Can you explain what this is driving at?
Mr Davies: It would appear to be. As you say, this is a work in progress document. It is not something that would have formed a final point. If I can pick out some elements within it, when we talk professionally about groups of our consumers, we talk about cohorts which is jargon. We try to avoid the use of jargon wherever possible. "Life in the pack" was a potential expression of an interpretation of cohort, not one that we use. That is where that would have come from. In terms of drinkability, that is where we do use quite a lot within Molson Coors and I would expect to see that on other documents. What we mean by "drinkability" is relatively light in taste, relatively refreshing and relatively low in alcohol. Carling is 4% ABV which is a relatively low alcohol beer. That is our interpretation of "drinkability" and that is where we use it across the organisation. Why specifically this document refers to ABV explicitly I do not know and I cannot comment on it. It is a piece of work in progress and would not have gone any further because we do not and cannot market ABV as part of our communication. Having said that, that has been a matter of some frustration. We have a Carling brand variant called C2, which is a 2% beer. I personally believe that is a worthwhile thing to be doing. I am actually bound by the same regulations that prevent me from referring to alcoholic strength in the communication of beer. Those regulations apply in exactly the same way to a 2% beer. I would perhaps ask the Committee to consider whether or not, for low alcohol products, perhaps some different approach to regulations might be appropriate.
Q859 Stephen Hesford: You got your advert in. Can you turn over to page 17, please? Reading from the top, given that we know what is impermissible, this is clearly identified as Molson Coors, your company, and it is about Carling. It is branded as Carling. "Owning sociability." One of the no nos is selling, advertising, marketing alcohol as a sociability product, is it not?
Mr Davies: The specific code refers to social success rather than the representation of alcohol on its typical consumption occasions, which are group occasions rather than single occasions. What we must never imply for example is that an individual if he consumes alcohol will be more popular. I would contend that responsible alcohol consumption in a group is one of the more appropriate situations under which alcohol is consumed. Sociability per se is not specifically an issue in the code. Implying social success is.
Q860 Stephen Hesford: Is football in simple terms, premiership or whatever, a successful game?
Mr Davies: It is a manifestation of sociability. The majority of investment that we have put into football over the years has been our sponsorship of the premiership and the Carling Cup. Those are competitions that have winners and losers within them so the success is not an explicit part of that. It is an overall cup competition.
Q861 Stephen Hesford: Finally, at the bottom, it says, "In short, Carling can", not may or could or discuss, "position itself as a social glue." That is not permissible, is it?
Mr Davies: I do not believe it would be. This is a document that was produced not by Molson Coors employees. This is one of our smaller suppliers and would have been produced as a piece of provocation.
Q862 Stephen Hesford: A piece of what?
Mr Davies: A piece of stimulus, as a piece of provocation, as a discussion item.
Q863 Stephen Hesford: It is certainly provocative.
Mr Davies: We would have discussed it and rejected it.
Q864 Sandra Gidley: Deborah, you have submitted a lot of documents to the inquiry which we thank you for but it seems from reading through those that the campaigns target groups such as young men that want to be seen by mates as up for it, flexible, popular with mates and girls, sound, witty and funny. Another group is aged 18 to 25, chavs and students. That is interesting. "Enjoy a couple of big nights out a week rather than going to the pub every night", which does not seem entirely responsible to me. A briefing document of yours which we did look at earlier on page 18 for the WKD brands asks at point four, "What do we want our audience to think, feel or do?" There is a comment here. It is market research but it then feeds into where the brand is going. "I tend to drink WKD during a night out as a change of pace when beer is getting a bit much for me. It is something that me and all my mates can drink together." Is there not a bit of a theme here, that the emphasis is on the partying, the binge drinking?
Ms Carter: There are a couple of elements there I would like to pick up. First, on the change of pace. WKD is 1.2 units a bottle and they would see that as their evening starting to wind down. Often RTDs are used when they are starting to think about going home. It might be one of their later drinks of the evening.
Q865 Sandra Gidley: These guys have already realised that beer is too much for them. Is it very socially responsible to then be encouraging them to top up with any alcoholic products?
Ms Carter: When you talk about the beer being too much for them, that might be in the same way that, when I go out as a designated driver, I might have a couple of cokes and think, "I want something different". I think you have to put it in the context that it is not necessarily too much for them in that they have had too much alcohol. Maybe they have been drinking beer and they want something different that might not be as much in volume. A bottle of WKD is 275 millilitres, versus a couple of pints of beer or a bigger bottle of cider. You have to take it in the context of their evening out and the likelihood is it is a signal that their evening is coming to a close. In terms of the binge drinking reference, we know that our product is popular on a Saturday night. Through our marketing communications we certainly would not do anything to communicate binge drinking. Very little of our advertising is in the field of point of consumption. In our current campaign, three of the executions on television are a guy at home with his partner, which we would see as being quite adult and quite away from the point of consumption. We would very much steer away from anything that would promote binge drinking, because that is part of the code.
Q866 Sandra Gidley: It was in fairness raised earlier that this was a few years ago. How would you say your advertising has changed over those years?
Ms Carter: We welcomed the Ofcom regulations. There was a review of the regulations. The bar was raised and we moved with it. I think that is right and proper. It is also a good illustration of how the current framework is working and we should continue to review, challenge and look at what we are doing. The new regulations came in. We stopped and looked at what we were doing and it gave us better clarification than we had previously had about what we could and could not do. We welcomed that process and we have very much moved on.
Q867 Sandra Gidley: Turning to page 19, that is a planning brief from earlier this year. This is again the WKD brand. The importance of advertising and campaigns to communicate maleness and personality. Under the code you are not allowed to use masculinity. What is the difference between masculinity and maleness?
Ms Carter: What you need to understand is that RTD as a category has always been predominantly very female focused in terms of a lot of the brands being targeted at women. We saw that there was an opportunity to bring to market a product that had male appeal. For us, it is not about being overtly female as opposed to overtly male. For example, we would not ever do a promotional link with makeup. That is why we would associate with the Nuts football awards that my colleague spoke about earlier. It is about engaging with our male consumers in things that they are interested in.
Q868 Sandra Gidley: What is the difference between masculinity and maleness?
Ms Carter: You can be involved in areas that males are interested in without overtly saying, "I, WKD, am a male product." To communicate maleness would be the Nuts football awards. Nuts is part of the male press so that is an opportunity for us to talk to male readers. The fact that it is in a male piece of media means that it is not viewed as being overtly female or girlie.
Q869 Sandra Gidley: Why does it not fall into the masculinity category? I am struggling to find the dividing line between maleness and masculinity.
Ms Carter: What we are talking about is that often maleness can be placed into the media. It does not have to be us creatively talking about maleness. It can be the Nuts football awards, using male press. Communicating maleness can be done by using male platforms as opposed to a creative look that says, "I am a male brand."
Q870 Sandra Gidley: Is this not in effect though a brief that says, "Go as far down the maleness route as you can without breaching the masculinity code. Push it a bit"?
Ms Carter: No, not push it a bit at all. We operate within the codes and the codes are there for a reason. We welcome them because they give us a framework to work within.
Q871 Sandra Gidley: Is it not human nature to push against the boundaries?
Ms Carter: Why?
Q872 Sandra Gidley: Surely teenagers do it all the time? Adults do it all the time.
Ms Carter: We have nothing to gain by producing ads that can only be run once because they are in breach of the code. The comment has been made earlier about the timing taken for an ad to be taken down. I would be very disappointed - TV ads and press ads are used more than once - if we were producing ads that, number one, do not fit within the code and, secondly, if we are investing money in areas that will only be able to be used for a very short period of time.
Q873 Sandra Gidley: There is not a shareholder interest in trying to push something to be as edgy as possible?
Ms Carter: Absolutely not. We have nothing to gain.
Q874 Dr Taylor: For my information, I want to establish what Halewood International is. I gather you supply spirits, wines and sparkling drinks for supermarkets?
Mr Oak: Halewood International is a relatively small, privately owned
business. We have a market share in the
Q875 Dr Taylor: We have already heard that Diageo does not supply the supermarkets, so where do you get it from to supply the supermarkets?
Mr Oak: In terms of? Are you talking about own label?
Q876 Dr Taylor: Spirits.
Mr Oak: We either produce the spirit ourselves or we import the spirit.
Q877 Dr Taylor: You employ BJL?
Mr Oak: Yes.
Q878 Dr Taylor: Do you have anything to do with JWT?
Mr Oak: No. They were no longer involved in the business from early 2008.
Q879 Dr Taylor: The impression I have is that the control of advertising on the TV and in the press is really fairly good but the web seems to be much laxer and seems to escape. Do you actively suggest advertising on the web merely because control is laxer there?
Mr Oak: It is not in our interest to do that. We are not interested in promoting our brands to either an under age audience or an audience that is going to misuse alcohol. We have advertised on the web. We have advertised Lambrini on the web. We have done it on sites where 75% of the audience is over 18. That is the rule that we go by. On the sites where we have advertised Lambrini, 88% of the audience is over 18. We work with the controls and the guidelines that are there. That age verification is independently verified.
Q880 Dr Taylor: Going back to the Lambrini ads which we have mentioned before, it does look as if the ones illustrated on page 21 show people younger than 25. Is that not therefore a breach?
Mr Oak: First of all, this is a website of the "Do the Lambrini" campaign. There are two lots of pictures here. If we take the women in the middle, they were used in the ad for "Do the Lambrini." Throughout the process of creating that ad, we had both the script, pre-cleared by Clearcast, and also all the cast. We had to submit the cast to Clearcast and they were happy that those women both were over 25 and looked over 25. They had to fit both of those criteria.
Q881 Dr Taylor: And the little bit on the left?
Mr Oak: The little bit on the left refers to consumers that have downloaded their version of the "Do the Lambrini" dance which was part of the website. I cannot tell from the one at the top but someone made the point earlier that the one at the bottom was downloaded on 15 June. If that person looks under 18, what should be happening is when they are uploaded there is a vetting process to say, "Do the people uploading look 18?" If not, they should have been taken off. I cannot really tell from the picture.
Q882 Dr Taylor: Because looks are so difficult to judge, do you think this is a pretty useless bit of the code?
Mr Oak: The code says that you must look and be over 25. That is seven years above the legal drinking age. We have submitted the cast to Clearcast and they made their judgment on it. These are people who are judging advertising every single day, so we submitted it to the experts to come back with their view and tell us whether it was appropriate.
Q883 Dr Taylor: Can you turn back to page 20? We raised this before. As you are JWT, I presume you have no responsibility for this?
Mr Oak: This document predates me joining Halewood. Although the reference is not on there, they have clearly used TGI data. The age break that was referred to earlier on which you were talking about is a standard age break that would come from the TGI data. It is not something that we are targeting to do. It is a piece of research mapping out ages, demographics and lifestyle.
Q884 Dr Taylor: That is an age range that is decided by TGI?
Mr Oak: It is a standard age break that has come from a research company, not of our making.
Q885 Dr Taylor: In the previous session we asked about the strap line, "Lambrini girls Just Wanna Have Fun" which apparently is still being used. Are you going to do anything to withdraw that?
Mr Oak: This was mentioned both in the previous session and also in the session last week. I think you said last week it was being used in multiple places, tube trains, bus ends, taxis. I sit here and say that is not the case. I believe you were misinformed last week when you said that. To give you the chronology, in 2007 the Lambrini strap line was felt to be unacceptable for TV and we have not used it on TV since. We have used it on a very limited number of occasions in other media based on the feedback that we have had from other regulatory bodies. Where it currently exists at the moment is on a few company vehicles and on the company website. That company website is the Lambrini.co.uk website which is predominantly a trade website. The ads that are there are there purely as reference and archive material, no more than that. In the last six months there have been fewer than 5,000 visitors to that site to view those ads.
Q886 Dr
Taylor: You are confident it is not widely
used. I think last week somebody told us it was on the back of
Mr Oak: No. That is incorrect. It was on the back of a
Q887 Dr Taylor: You are quite clear that that is not being used?
Mr Oak: The only places it exists are on a few company vehicles and on a trade website, purely as reference and archive material of old advertising for Lambrini. We are not seeking to promote that strap line in TV form at all.
Q888 Dr Taylor: Would you agree with the general feeling that control of TV and press advertisements is much tighter than of internet advertising?
Mr Oak: We have heard today a lot of discussion on things like age verification pages. I sit here and say there is opportunity for that area to be tightened up and improved so that we can all operate within guidelines that we all feel comfortable with. None of us here today wants people below the legal drinking age seeing our marketing campaigns. It is just not in our interest to want that.
Q889 Sandra Gidley: Could you turn to page 24, please? It is the SideKick brief again. I just wondered if you could explain what the image is all about really.
Mr Oak: This is from a chart in 2005 which again predates me by some time. It
is purely setting out an insight into drinking behaviour and a drinking society
in the
Q890 Jim Dowd: Mr Fennell, you were talking about a 2% beer?
Mr Fennell: That is correct.
Q891 Jim Dowd: It occurs to me simply as a lay person that there is a trend in the industry to bring in lower strength beers of late. Am I correct that if it has less than 2% it is not classed as an alcoholic drink at all? It is classed as a soft drink.
Mr Davies: I may not be 100% correct on this but I believe that classification starts at 1.2%. It is a lot less than 2%. We have found that beer at that alcoholic strength really struggles to deliver on the product qualities. It is just not a good enough beer at 2%.
Q892 Jim Dowd: Why do low alcohol or alcohol free beers taste so bloody awful?
Mr Davies: I am afraid you would have to ask a technical person that.
Q893 Jim Dowd: Is Kaliber one of your brands? It used to be a Guinness brand.
Mr Fennell: It is.
Q894 Jim Dowd: That is the worst of the lot. Have you any idea why?
Mr Fennell: Thank you. Having some alcohol in the beer is part of what gives it its body. For a really good answer, we could send something in from one of our technical people.
Q895 Jim Dowd: As long as it is not a bottle of Kaliber.
Mr Fennell: I think the technology is starting to improve at around 2% to 3%. Both Molson Coors and Diageo are now experimenting with beer brands at that sort of ABV level. They have been slow to start but we are committed to keep trying at them and give an alternative which tastes nice but is a real alternative at lower alcohol levels.
Q896 Jim Dowd: I mention it because obviously if people are to move away from alcohol and the alternatives are just unpalatable clearly it is going to make it more difficult, is it not? I am not quite sure how much effort commercially you would put into redressing that.
Mr Fennell: We have put quite a lot of effort into the design of the beers. Getting the beer right is the first challenge. We are experimenting, doing test marketing in the outlets and we are tracking the C2 tests as well. My hope is that we can find a way of getting people really into those. So far, we have not been that successful, to be honest.
Mr Davies: C2 is a project I started personally about ten years ago. The final recipe that we went to market with I think was recipe number 285. It did take quite a long time to get there.
Q897 Jim Dowd: Did you test it all yourself?
Mr Davies: No, I did not. We have to date invested more than £20 million in this project. I have a personal belief in it. I think it is the right thing to do.
Chairman: Could I thank all of you very much indeed for coming along and helping us with this inquiry.