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Myth of Responsible Drinking

Alcohol manufacturers have been adding small catch phrase to their ad copy: “Drink Responsibly!” What exactly is the purpose behind this phrase? To really understand the advertising psychology, we first need to understand some basic business theory.

Regardless of whatever product or service that is being sold, the profits come from the last few percent of total sales. In other words, the first 90% to 98% of sales is used to pay for wages, supplies, bank loans, etc. The company can only be said to be profitable when it gets those last few percent of sales. Because much of the costs have been paid by the first 90% or so of sales, any sales increase after this point is almost all profit. So if the business somehow finds an extra 2% in sales, this will translate into a much greater profit increase for the owners. This business concept is known as leveraging, and it is quite interesting in that the business is really not that much busier than before the 2% sales increase. Yet that small change in sales can make the business owners very wealthy as opposed to just surviving.

Leverage has its reverse consequences. For example, if the business loses 5% or 15% of its sales, employees are sometimes sacrificed so the business can survive to earn profits in better times.

When an industry loses 5% of its sales, this causes a great dislocation of how competing firms interact in the marketplace. Often firms will reduce prices to maintain sales levels. Not only are their profits reduced with lower prices, these firms are stealing business away from competitors, hurting their profitability. Some firms are doomed to go under even when there is a small retraction in the marketplace. The alcohol industry is not immune from reverse leveraging because of declining sales.

So what happens if the alcohol industry can convince us to drink more responsibly? This is almost counter-intuitive, as exemplified by the following examples:

Police are still catching impaired drivers, and alcohol is still a significant contributor to many auto accidents. What if we could wave a magic wand and change offending citizens’ attitude not to drink prior to operating a vehicle? How much less alcohol would be consumed? 1% less? 2% less? Even though this is a small amount, it would still hurt the profits of the alcohol industry if drinking combined with driving were truly no longer part of our culture.

Let’s wave our magic wand a bit harder. Let’s stop all addicts — those whose life is being destroyed by alcohol — from drinking! How much less alcohol would be produced if we could accomplish this: 2%? 12%? 22%? The 2% scenario is definitely going to cause unhappy profit changes for the owners of the alcohol industry. There is likely much more for them to lose if we eventually learn how to cure this addiction.

Let’s take our wand waving one step further. Let’s assume responsible drinking doesn’t include the binge drinking that causes drinkers to lose enough judgment to put them at unnecessary risk on the day of their binge or to reduce their efficiency in the workplace or study halls on the day after the binge. How much alcohol is consumed in these drinking situations where some degree of self-control is indeed lost? Certainly not 2%? The 12% or 22% figures are more likely!

If we could actually build a culture where all users of alcohol kept their consumption to responsible levels, many distilleries and pubs would be shut down and many workers would lose their jobs! It is clearly not in the best interest of the alcohol industry to have the population drinking more responsibly. So why are they asking us to do?

I believe that the alcohol industry has learned from the slow demise of the tobacco industry where smoking was regarded as a cultural virtue 50 years ago to being an activity mostly prevalent in the lower economic classes. Tobacco use is now beset by both stigmatization and discrimination. The alcohol industry does not want to see a similar social change happen — even if such a change may be good for society.

I believe that these “responsible drinking” ads have two purposes to them. First, the ads have been carefully constructed to convince current users that however much alcohol they are drinking, it is responsible usage; therefore no lifestyle change is necessary. Second, these ads give the impression of the alcohol industry actually caring how their product is being used, something the tobacco industry never did. Because the ads are creating a favorable impression, they still reinforce the consumption of alcohol as a cultural virtue. Let’s assume these marketers know exactly what they are doing to keep their industry in long term profits — and we have been subliminally influenced by their marketing strategy. Otherwise the marketers would not be spending great amounts of money to tell us to “drink responsibly.”

If the marketers were truly concerned about responsible drinking, they could write their ad copy like this: “It is entirely possible to have a rewarding and fulfilling life, full of great social and recreational activities, without alcohol. Not only does responsible drinking indirectly sends a cultural signal to irresponsible drinkers that their consumption levels are acceptable, it is still contributing to the sustainability and profits of companies which depend on irresponsible drinking. Hence there really is no such thing as truly responsible drinking.”

Published on 2011

Building a Kinder, Wiser Democracy

The TDG Essay