Defending the Weakest Link: the Alcohol Industry

The alcohol production industry across Europe has a problem. With each passing year its “license to operate” is being whittled away as the industry alienates some of the most important groups in society. The World Health Organization is running a global campaign for the introduction of much tighter regulation concerning access to alcohol, not least through driving up price.

Across Europe, groups such as the medical profession, the police, institutions of local government and, to provide resonance and leverage to these groups, the media, have turned against the industry. Not only do some of the activities of the alcohol production industry come in for very vigorous criticism, the very right of the industry to participate in public policy discussions is now being challenged.

There are many contributory factors to this state affairs but the most important one is entirely within the industry’s control: its own behaviour.

In a classic example of trade association’s inherent weaknesses, the only thing the industry has been able to agree on is to defend every aspect of the status quo. Thus, all suggestions for reform are met with complete condemnation. The industry has been unable to agree on any single significant reform that they could argue for positively. A sector’s reputation, like an individual’s, is largely made up of the patterns of their repeated behaviour. An industry that always responds with a resounding “no” to every proposal, will eventually find itself excluded from the public policy discussions that are vital to its own existence.

Suggestions, for instance, that retailers in Europe should not be permitted to sell alcohol at below its cost price [minimum pricing] are rejected because they mention the dreaded word “price”. In most industries, an opportunity to break out of the process of commoditisation would be greeted with rejoicing.

The usual companion of the argument “nothing should be done” is “nothing can be done.” Therefore, an industry that has decided that it must avoid the “slippery slope” must vigorously defend everything in the status quo. One way of doing this is to insist that all proposed reforms are either unworkable or ineffective. So the two key arguments then become “it cannot be done” and “this is not a silver bullet”.

The adoption of this position inevitably leads to the gradual disintegration of the reputation of the industry. Since it requires the rejection of all suggested reforms from the outset, it precludes genuine engagement with other stakeholders. The argument that no proposed reform is a solution in itself ["there is no silver bullet"] means that the industry has withdrawn from the discussion of the relative merits of different proposals. Not only does this mean that foolish proposals may well be adopted, the political process will become increasingly impatient of an industry that refuses to acknowledge changing societal expectations.

There is one final, and surely critical, aspect to this example of an industry unable to change. As the industry becomes more isolated, its vulnerability to “incestuous amplification” also develops. That is, the industry’s senior personnel spend more and more time talking to each other confirming their prejudices, rather than having their views challenged by those who do not agree with them. Like chess players who have spent some time playing poor opponents, they are likely to lose in the early stages of a major tournament.

August 2010