Hard Lessons from “Hard Solo” for Alcohol and Non-Alc Alternatives NPD

Asahi found itself in hot water recently after the release of its latest alcoholic beverage, “Hard Solo”. A new foray for the beloved ‘thirst-quenching’ soft drink brand, the new cheeky bevvy is almost identical in appearance to their beloved family favourite, Solo. This similarity raised concerns from key regulators suggesting the product is targeted towards minors, or may encourage the irresponsible consumption of alcohol, which is prohibited by both state laws and the alcoholic beverage industry’s self-regulating Responsible Alcohol Marketing Code (the ABAC Code). 

Asahi faces increased scrutiny regarding both its collateral advertising and the underlying product labelling and positioning, which could lead to penalties, significant remedial costs/investment losses, as well as more significant commercial consequences if retailers take the position that selling the product isn’t worth the hassle.  But where did Asahi’s plans go awry? And what can suppliers of both alcoholic and non-alcoholic beverages learn from their plight? 

The bottom line comes down to seeking appropriate expert advice early in the NPD process and lining up appropriate support leading up to, and throughout, launch. This is a complex area for F&B businesses, made more complicated by multiple overlapping regulatory schemes and innovative product development pushing boundaries, particularly in the ‘alcohol alternative’ space. 

Let’s look a little harder into the lessons to be learned from Hard Solo in this UC F&B ‘Deep Dive’.  

WHAT’S THIS ALL ABOUT?

Currently, there is a particularly tricky ‘liminal’ legal space that captures businesses looking to sell beverages that: 

(a) are alcoholic but have a connection to traditionally non-alcoholic brands, descriptors, or product profiles; 

(b) are non-alcoholic but reference established alcoholic brands, descriptors, or profiles; and/or 

(c) target a youth market. 

If you want to be able to add functional ingredients or make health claims, prepare for an even rougher ride.

There is a fine line between breach of the voluntary ABAC Code (or the AANA Food & Beverage Marketing Code/Code of Ethics) and more consequence-heavy infringements of the FSANZ Food Standards Code or state-based food laws and liquor licensing/advertising laws. Whenever we talk about the sale of consumer goods, we also need to consider the Australian Consumer Law and misleading and deceptive conduct, product safety, and consumer guarantees claims. What is the overall impression created for consumers? If what they get is not what they expect, there will be a range of potential consequences under the law, as well as damage to consumer and customer relationships and brand reputation. 

For Hard Solo, the hard lesson is that looking to capitalise on a level of consumer awareness and sentiment attached to an established brand can lead to consumer confusion - and regulator ire - if you play it too close to the line. The primary risk here is a direct consumer safety risk, in that the cans of Hard Solo look so similar in colouring, font, layout, and other key elements that a child may not be able to tell the difference between the alcohol and its non-alcoholic counterpart in the fridge or on the kitchen table. Children, in particular, may also have difficulty identifying the taste of alcohol, which could lead to damaging levels of consumption. 

The secondary risk, which is something many businesses in this space have to grapple with, is that the obvious and intentional parallels between the products may encourage consumers (especially young people) to consume the alcoholic Hard Solo in greater quantities than they ordinarily might or in an otherwise irresponsible manner (like ‘quenching their thirst’...). Asahi, it seems, didn’t realise that they’ve actually made their job (or their legal/compliance team’s jobs, at least) harder here because they have to work against the established consumer impressions associated with decades of Solo advertising in the non-alc context in order to supply Hard Solo in a responsible and compliant way.

The ABAC Code deals with responsible marketing of alcohol products in Australia and is designed to address exactly these kinds of ‘in-between’ issues of ethical advertising and more ephemeral consumer impressions. It is an industry code that applies to voluntary signatories and sets key standards for the responsible content and placement of all alcohol marketing in Australia, and specifically prohibits advertising that promotes the irresponsible consumption of alcohol (which is what felled Asahi).  

The ABAC Code now also covers “Alcoholic Alternatives”, which are non-alcoholic beverages that must still generally comply with all standards of the ABAC Code.  An “Alcohol Alternative” is defined under the ABAC Code as a beverage that is at or less than 0.5% alcohol by volume that:

• has an appearance and style commonly associated with Alcohol;
• uses a brand or descriptors commonly associated with Alcohol; and
• is not a beverage commonly understood as non-alcoholic, such as fruit juice, soft drink, flavoured milk or other which fall outside the ABAC Code remit.

So, if this situation was flipped (and Hard Solo was the established brand, with ‘soft’ Solo being the spin-off), the ABAC Code would likely still apply.

This “Alcohol Alternative” definition, and the consequences of being captured by the ABAC Code, differ from the general treatment under the FSANZ Food Standards Code (which is enforced as law under legislation in each state and territory in Australia and in New Zealand). The Food Standards Code prescribes certain mandatory labelling requirements (including advisory statements and warnings) and prohibits the making of certain claims (including health claims) about beverages containing more than 1.15% alcohol by volume. That 0.5% ABV is still a concept relevant to the application of the Food Standards Code, but a beverage with alcohol levels between 0.5% and 1.15% is not considered an ‘alcoholic beverage’. This is particularly tricky for beverage suppliers because many fermented beverages, like Kombucha, can contain a low level of alcohol (which may fluctuate). The ABAC Code also prohibits the making of health claims about beverages within its purview, which could cause problems for non-alc beverages wanting to call out the health benefits of its ingredients or added functionals. The ABAC Code does, however, allow certain exceptions if an Alcohol Alternative is presented in a prescribed way.

WHY SHOULD YOU CARE?

Though it doesn’t have the force of law, the ABAC Code is agreed within industry as being an important measure to address potential social harm and promote public health and safety. Where a complaint is made about breach of the ABAC Code and upheld by the ABAC Adjudication Panel, your business may be required to withdraw, discontinue, or modify the marketing communication within 5 business days, and cease orders for production of the product or packaging and modify the name, packaging or marketing collateral within 3 months after notification. Compliance with the ABAC Code is voluntary; failure to comply with the Panel’s orders will not place a signatory in breach of the law and no traditional penalties will apply. However, a failure to remedy a breach may result in serious reputational consequences and egregious conduct may be referred to the ACCC or state-based regulators depending on its nature. Penalties for non-compliance with state food or liquor laws can reach into the hundreds of thousands of dollars and can include criminal sanctions.

As this area of ‘alternative’ beverages continues to expand - bridging the traditional alcoholic and non-alcoholic categories - competitor, regulator, and government scrutiny is likely to continue to intensify, especially with regard to public health policy and the wellbeing of young Australians. The recent crackdown on ‘vapes’ (e-cigarettes) is a clear reminder that the government and regulators can act quickly to change, adapt, and enforce laws where there is a perceived social harm or risk to public health. 

Whether your product contains alcohol or not, you need to be conscious of the overall impression created by your labelling and collateral advertising, and conscientious about avoiding representations that may be viewed as encouraging the irresponsible consumption of alcohol. Miss-steps on this NPD pathway could end with hefty fines, reputational damage, enormous investment losses, and your products being pulled from shelf. So what can you do to keep your business out of hot water (with or without lemon)? The answer is so obvious, you already know it: be proactive, be prepared, and remember that the UC F&B team is here to help! 

BE PREPARED, NOT SCARED!

F&B businesses expanding into alcoholic and alcohol alternative categories should take the following steps to ensure that they:

1. Get expert legal support in ensuring labelling compliance.
2. Have marketing plans and key collateral reviewed for practical risk/compliance recommendations.
3. Where risk remains: 

• work with a PR/communications expert experienced in food and beverage to plan for responses to consumer, competitor, media, and regulator, comments and enquiries, including pre-prepared scripted responses for use by your internal comms team; and 
• consider approaching key regulators and industry bodies ahead of time to manage expectations and forestall alarmist public reactions, complaints, and investigations.

Universal Counsel can help you successfully tackle all of the above steps efficiently and cost-effectively with assistance from our one-stop professional services network; we're always on call, always in your corner. 

NEXT STEPS

If you’re unsure whether a current product is compliant, or are seeking to push some boundaries, reach out today to our UC F&B team for practical support in understanding the risks and opportunities for your business and to develop a plan of action. We’re here to help businesses that do get things done.

UC specialises in helping businesses navigate exciting in-between spaces and new frontiers. Our UC F&B experts can assist with: 

• Compliance audits and specific enquiry support to ensure your products are fit for sale and identify the best path to market.
• Comprehensive labelling and collateral reviews. 
• Protecting your investment and key assets.
• Resolving complaints, disputes, and regulator investigations.
• Training and guidance tailored for your team.

Contact our UC F&B team at food@universalcounsel.com.au to discuss solutions for your business. 

See our UC F&B unit page for more information on the F&B industry-specialised services we provide under this banner.