European Court ruling on French ban on TV alcohol advertising: A blow for advertisers and sports rights holders

On the day that the European Court condemned attempts by European finance ministers to get France off the hook for breaching the stability pact, it decided to allow France to continue its ban on television advertising of alcoholic beverages.

Compliance with the ban (which is backed by criminal sanctions) has led French TV companies to exert pressure on foreign football clubs not to let perimeter advertising sites at their football grounds to drinks firms, such as Bacardi, for fear that the images would encourage alcohol consumption when retransmitted on French TV.

Even though the French law bans all alcohol advertising, eg French cognac as well as Scotch whisky, and is therefore not overtly protectionist, the Court had no difficultly in finding that the French law restricted freedom to provide broadcasting and advertising services. However, despite the restrictions on trade, the Court held in the absence of a EC wide regime, that the measures were proportionate to the objective of discouraging the consumption of alcohol and therefore were justified.

The outcome will be a relief for the French government. On the key issue of proportionality, the Court judgment almost gives the (rather implausible) impression that the French government had carefully drafted the law with EU compliance at the forefront of its mind. Thus, in reaching its conclusion on proportionality, the Court put much weight on the fact that the ban only covered TV advertising and not other media and that the ban was much less draconian where re-transmission takes place in a multiplicity of countries (eg the Olympics) and not just France and the country where the event takes place (eg the foreign matches of a French club in the European Championships).

The margin of manoeuvre given to member states by the judgment means that the French law is now exportable to other countries. The outcome could be an overall raising of the costs for drinks companies seeking to expand in new markets where the commercialisation of the product has public interest implications. Costs may be raised because TV advertising gives more “ban for buck” than the use of other advertising media.

The implications for sport financing are also quite considerable. Event organisers and clubs now have to accept that in competitions involving the away match of French clubs that are only retransmitted in France, financial institutions (whose products are not deemed to damage the health of consumers in the same way as alcohol and cigarettes) need not offer as much money as drinks companies in seeking to sponsor sports competitions. This could make centralised collective selling of sponsorship on a European wide basis unattractive when French clubs qualify for a tournament.

What the European Court seems to be saying is that member states are entitled to counter sport’s potency as a medium for a message where alcohol is concerned (this has already happened in relation to tobacco). This is likely to be perceived as being unfair by sports rights holders.

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