Diageo: Influence

PR and CSR

A big part of Diageo's recent activity has been influencing the UK Government's policies on alcohol. Diageo has developed close ties with government policy makers in an effort to limit the statutory regulation of alcohol, and to steer government policy into protecting its own interests. It has achieved this through a huge investment in public relations and in its promotion of 'corporate social responsibility' (CSR) as a business strategy as favoured by New Labour, and through publicly speaking out against alcohol harm.

Diageo's Policy on Responsible Drinking

'Where alcohol is consumed excessively or irresponsibly, this can create health or social problems for the individual or society’ - CEO Paul Walsh

Central to Diageo's position on alcohol is the idea that while alcohol can cause problems, these are the result of misuse by irresponsible individual consumers, not integral to the drug (See the introduction to the Corporate Crimes section, for a contradiction of this stance by the World Health Organisation). It is in the context of the possibility that 'alcohol beverages may be consumed irresponsibly,' that alcohol creates problems. In fact, Diageo's policy on responsible drinking focuses on the positive, suggesting that drunk in moderation, alcohol can be healthy. The website boasts that 'alcohol beverages bring pleasure to millions of adults every day,' and play 'a unique part' in the 'social lives and celebrations of many cultures' . According to another statement on Diageo's website, ‘excessive alcohol consumption can lead to medical, psychological and social problems' but 'a belief in the health benefits of moderate consumption of alcohol has been part of the folklore of many cultures' and 'many independent researchers have concluded that there is a scientific basis to some of these beliefs' .

1. This idea that alcohol can only be bad for you when operating in an inappropriate context is reflected throughout Diageo's policy on a number of issues, which highlight individual responsibility:On under-age drinking, Diageo's policy acknowledges that 'it is very important for young people to be educated about the nature and effects of alcohol,' but qualifies this by shifting the responsibility onto individual families, stating that 'best way for parents and other role models to influence the likely drinking behaviour of their children is to set an example...by drinking responsibly' .
2. On binge-drinking, Diageo claims, in response to the suggestion that marketing has an adverse effect on binge drinking and under age drinking, ‘independent research suggests that many influences besides advertising shape young peoples’ drinking attitudes and behaviour, especially parental and peer influences’ .
3. And on drink driving, likewise, ‘individual responsibility is paramount' .

This concern with the effects of alcohol gives the company, in its opinion, a say in formulating government policy on alcohol: 'The public health community has an obvious role to play in helping governments to develop policies and strategies which aim to promote responsible drinking and reduce the incidence of alcohol misuse. Diageo believes that the drinks industry also has an important role to play in support of this effort' .

Diageo's presentation of itself as a responsible company benefits its ability to market a product it sees as normalised and non-problematic. By singling out irresponsible misuse of this product, the potential for suggesting that the product itself is not a problem for health and society is protected and even strengthened. This in turn has given the alcohol industry a voice in policy formulation, allowing it to present to the British government a platform which normalises alcohol and criminalises its misuse - a platform the government has been responsive to. The emphasis on education, likewise, supports a shift to 'choice' and individual responsibility rather than regulation. Similarly, in choosing to market the alcohol 'responsibly' by disassociating it from dangerous or anti-social behaviour, the separation is strengthened between the product and its misuse (See 'Marketing' under the Corporate Crimes section of this profile on advertising to young people). Overall, a platform is presented which is not inimical to the commercial interests of the company and its shareholders, and which is allowed to be propagated to, and to exert an influence on, government.

Self Regulation of Marketing

Alcohol companies have been anxious to self-regulate and co-operate with government on marketing. This can be seen as an attempt to stave off governmental regulation of alcohol marketing, which compared to tobacco marketing, is subject to little regulation.

Diageo has a Code of Practice on Marketing Alcohol (see also section on 'Marketing' under 'Corporate Crimes'), written in 1998 and updated in 2003 . There is also a Code of Practice on the Naming, Packaging and Promotion of Alcohol Drinks produced by the Portman Group, an industry body Diageo is closely involved in, written in 1996 and updated in 2003 (see section on the 'Portman Group' above).

The focus of these codes of practice is to protect the industry from complaints and regulation. A conference on 'marketing alcohol drinks' in September 2004 had as its aim introducing 'greater creativity to the marketing process to pre-empt aggressive legislation,' and offering ideas on 'how marketers can target two audiences successfully - government and consumers' . The Portman Group's code 'reflects the industry's determination to make self-regulation work,' so that it 'fulfils a dual purpose of protecting the public and also 'protecting the industry from the threat of legislative clampdown that inevitably would arise if self-regulation were to fail,' so that the 'socially responsible promotion of alcoholic drinks' can continue .

Alcohol support and campaigning groups express concern that the voluntary, self-imposed system of marketing and advertising regulation is not enough. According to Eric Appleby, Chief Executive of Alcohol Concern, 'we’d also like to see them consider bringing the present voluntary code for marketing, packaging, naming and web promotion of drinks – currently run by the trade’s Portman Group – under a regulatory regime independent of the drinks trade' . Likewise, former health minister Frank Dobson sees the Portman code of marketing as a 'code for rapacious booze producers' .

Diageo's Influence on Education

Diageo 'is actively involved in community-based alcohol education projects, as well as educating and informing consumers' . The company sees education on responsible drinking as a central forum for tackling alcohol related problems, in line with their view of these problems as brought about with individual irresponsible behaviour. Diageo is involved with projects promoting responsible drinking in many countries including Brazil, Peru, South Africa, Uruguay, Chile, Germany, the US, Scotland, Ghana, Seychelles, Thailand and Norway. The idea is that educating about alcohol will allow people to drink in the right way, with catchphrases used such as 'intelligent consumption' and 'celebrate wisely.'

• The Alcohol Education and Research Council is a British body focusing on education relating to alcohol, which includes representatives from the industry as well as from public health and research communities. A Diageo representative is joint Vice-Chair of its Developing Peoples and Organisations Committee .

Diageo sponsors three publications for teachers, produced by the Teacher's Advisory Council on Alcohol and Drug Education (TACADE), aimed at educating young people about alcohol . Vanessa Williamson, Social Responsibility Project Manager at Diageo GB, is a member of the 'TACADE peer alcohol education project advisory group' .

In Australia, Diageo is the main sponsor of the 'Think Before You Drink' website, which aims to teach teenagers about the effects of alcohol. The emphasis on the website is on pleasure: there are online games unrelated to the education programme, and the encouragement for children to read the material is that the games' high scores will only be displayed if they correctly answer a question based on the material

Diageo's Links with the Government

Diageo has also appointed a ‘Government Affairs Director’ in the UK for 'closer liaison' with government. This is Tim Rycroft, former 'special advisor' to the Secretary of State for Health, and therefore, we can imagine, able to give the company influential contacts and knowledge within the department most likely to want to impose regulation.

Diageo has also been boosting its links with government through its participation in forums, conferences and seminars in which industry representatives come together with government ministers to play an active role in policy making.

For example, a 'Responsible Drinking Seminar' was held on 20th May 2004, which led ministerial policy on alcohol . The conference was commissioned and hosted by Diageo. A further link was through the Institute for Public Policy Research (IPPR), which organised the conference, whose founder and leading trustee Baron Hollick is also Diageo's senior non-executive director.(See Who, Where, How Much section of this profile . The conference spearheaded the government's policy of partnership with the industry, and the focus on social rather than health problems associated with alcohol. It was attended by the Prime Minister Tony Blair, who said that binge-drinking was in danger of becoming 'the new British disease,' as well as by Home Office Minister Hazel Blears, Public Health Secretary Melanie Johnson, and representatives from the police and health services .

On 7th September 2004 a Westminster Diet and Health Forum National Seminar was held on 'Alcohol, Advertising Regulation, Licensing and Public Health,' to examine reform on alcohol regulation, and contribute to comprehensive briefing documents for senior policy makers. Speakers at this conference included Tim Rycroft, Diageo's 'Government Affairs director,' as well as other members of the Portman Group.

Impact on Policy

‘Public health policies concerning alcohol need to be formulated by public health interests, without interference from commercial interests.’ World Health Organisation, 2001.

This section will look at the case of current British alcohol policy, which has proved amenable to industry interests, to the severe concern of alcohol campaigning groups and health experts.

The government has issued statements that echo the language used by the industry. In January 2005 the government stated that alcohol policy 'requires partnership working at both national and local level,' including with 'the drinks industry,' and expressed the aim of creating 'a culture where drinking sensibly is the norm' .

Tony Blair, speaking at the IPPR 'Responsible Drinking Seminar' which Diageo hosted in May 2004, sounded not unlike Paul Walsh, Diageo's CEO, in his attack on irresponsible binge drinking and defence of moderate drinking and industry partnership:

'Millions of people drink alcohol responsibly every day. No-one wants to stop that pleasure. But there is a growing problem on our town and city centre streets on Friday and Saturday nights...I know the industry is working hard on codes of practice... I want to give the industry a chance to build on the good work that I know is already out there and to prove that it is committed to tackling the problems of binge drinking' .

The section will look first at the generalised strategy of the Blair government on alcohol, released in March 2004, and its priorities, then at specific items of legislation over the last few years, then at general trends in the corporatisation of politics:

1. National Alcohol Harm Reduction Strategy
2. Blood Alcohol Level, 2002
3. Increase in Licensing Hours, 2003
4. Measures Targeting the Individual, 2004-5
5. Corporate Involvement in Policy

Partnership with the Industry: National Alcohol Harm Reduction Strategy, 2004

On 15th March 2004 the government published its ‘Alcohol Harm Reduction Strategy for England and Wales.’ The focus of the policy was on self-regulation, and it structured its proposals around the interests of the alcohol industry. The strategy was underpinned by the idea of cooperation with the industry, which it saw as 'a substantial and valuable part of the UK economy and society,' with 'a valuable role in helping to prevent and tackle the harms caused by alcohol misuse.' The Report congratulated the industry's self regulation and formulated a scheme of further self-regulation, participation in which 'should initially be voluntary' as 'we are keen to allow the industry to demonstrate its willingness to abide by best practice' . This overlooked advice to regulate rather than cooperate with the industry. Martin Plant, Professor of Addiction Studies, said that:

‘voluntary agreements have a tendency to result in token or minimal compliance. The latter is unacceptable in relation to such an important health and social policy issue as alcohol' .

Public health and voluntary sector experts criticised the policy, seeing it as 'a disappointment and a sop to the industry' (Professor Christine Godfrey, advisor to the Strategy Unit). Allegedly, the industry responded with relief to the policy, Jean Coussins, Chief Executive of the Portman Group saying 'I am pleased that the government has recognised that it can build on the good practice already in place amongst leading companies within the industry' . In line with industry suggestions and against public health advice, the strategy targets a minority of binge drinkers rather than overall consumption of alcohol, taking up the industry's emphasis on 'public order' rather than health, and the industry's assumption that harm is caused not by alcohol consumption itself but the amount consumed and behavioural patterns of those drinking.

Many health experts dispute the industry assumption about alcohol harm, suggesting that liver failure caused by sustained drinking, rather than anti-social behaviour caused by binge-drinking, account for the majority of people treated in Accident and Emergency for problems caused by alcohol .

Alcohol Concern suggested that 'the failure of the strategy to tackle per capita consumption represents a failure of political will and a breakdown of 'joined-up government', with departments working with the industry winning a flawed strategy over those responsible for protecting the nation’s health' . Richard Doll, a leading epidemiologist pointed to a 1000% increase in liver cirrhosis over the last 30 years, which was left out of the report, and stated that:

'Every scientific committee I have ever sat on has concluded that reduction in harm caused by drinking can only be achieved by reducing our overall consumption. It just doesn't work to target a minority. The only people I have seen recommend this are the strategy unit' .

The effective result of these priorities are policies which include partnership with the industry, education campaigns, and targeting of individual anti-social behaviour. Those measures which could have harmed the industry, including targeting of drinking venues, advertising and drinks prices, were ignored despite their preference by health experts

The overall attitude of the government was summed up well by home office minister Hazel Blears:

'I respect the scientific view, but it wasn’t for us. We needed practical measures.’.

Blood Alcohol Level, 2002

In March 2002 the UK government went back on its 1998 plan to reduce the blood alcohol concentration limit for drink-driving from 0.08% to the EU level of 0.05%. A House of Lords Committee noted that 'this decision [not to reduce the level] contradicts all the evidence we have received' and that 'the Department's position coincides with that of the alcohol industry,' despite opposition from 'local authorities, the police, the British Medical Association, the Automobile Society, the Royal Society for the Prevention of Accidents, the Transport Research Laboratory, and the Parliamentary Advisory Committee for Transport Safety' . The decision not to reduce the acceptable level came after meetings between the department and the Portman group, who despite their anti-drink-driving campaigns were against the reduction when it was proposed in 1998, and the government drew on research carried out by the Portman Group in their 2002 decision . Allegedly, The chair of the House of Lords Committee, a Labour peer, noted that he 'was surprised by the apparent influence of the drinks industry' .

Increase in Licensing hours, 2003

In 2003 the government extended potential licensing hours, with local authorities able to grant a license for up to 24 hours from February 2005 . This despite substantial concerns about binge-drinking and widespread belief that extended licensing hours would contribute to it. The government department responsible for licensing hours is the Department for Culture, Media and Sport (DCMS), which makes it separate from other areas of alcohol policy under the Home Office and Office of the Deputy Prime Minister (ODPM), a concern of tourism and entertainment rather than health or crime. Journalists, the wider public, statutory agencies and alcohol campaigning groups have expressed concerns that the extended licensing hours will lead to an increase in crime and violence associated with alcohol. A report by the Metropolitan Police contradicts the government claims for the new Licensing Act, forecasting an increase in drink-driving due to the lack of late night public transport, a growth of illegal taxis, and greater disturbance to residents, and suggests that 'with the drinking culture that is firmly entrenched in the country, the relaxations in permitted hours will for the foreseeable future fuel this culture'

Although the 2003 Act states that license extensions will 'still need the licensing authority's agreement,' after objections have been made by the police and local people, the DCMS published a Draft Guidance in March 2004 which restricted the scope of licensing authorities. In the view of researcher, Robin Room, the guidance reveals a successful campaign on the part of the industry to ensure government limits the possibilities open to local authorities and thereby ensure their interests are protected from local authorities who may be less flexible towards them than central government . In the guidance, the first stated aim of the act is to 'give business greater freedom and flexibility' . The remit of licensing authorities is limited to a certain scope and cannot be 'aspirational,' 'for example, conditions may not be attached which relate solely to the health of customers rather than their direct physical safety,' as that is not a concern of this piece of legislation Additionally, once people are 'beyond the vicinity of the premises' concerned, their behaviour is a matter 'for personal responsibility of individuals under the law' .

On 21st January 2005 the government announced measures to counteract the possible dangerous effects of the licensing overhaul, including banning orders on people persistently drunk and disorderly, and charges on pubs to pay for further policing in areas judged as 'alcohol disorder zones,' after a warning . Srabani Sen of Alcohol Concern, suggested the charges would be insufficient, with the taxpayer continuing to pay for increased policing needs

Measures Targeting the Individual

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Alcohol policy reflects the ideological affinities of the Blair government including its tendency to define social problems in individual terms without reference to their social context, and to find solutions which focus on the behaviour of the individual. This correlates well to the alcohol industry's focus on individual misuse of alcohol, which the government has adopted in the policies described above. At the heart of the policy is a range of measures aimed at the individual which suggest their blame for these problems and the industry's innocence. These include on-the-spot fines in the form of fixed penalty notices (FPN) and penalty notices for disorder (PND), acceptable behaviour contracts, and anti-social behaviour orders (ASBOs) . According to Home Office Minister Hazel Blears, 'it is very much built on the idea that it will be a swift punishment for people' .

Corporate Involvement in Policy

The involvement in policy formulation given to companies, whose interests will always focus on profit however much they are committed to social responsibility, fits in well with the business-oriented priorities of Britain's New Labour government. As shown in the above examples, alcohol campaigning and support groups as well as public health experts believe that this amount of influence is inappropriate where a serious health issue is at stake, and that Diageo and the industry bodies it is involved in are dictated by corporate needs. On the influence of social aspect organisations on policy, the Global Alcohol Policy Alliance state that,

'the view of Social Aspect Organisations that they have an equal place at the policy table fails to recognise that the evidence that they bring to the table is not impartial and favours the commercial interests of the beverage alcohol industry' .