Saturday, September 15, 2012

Obama Campaign National Finance Chair Barzun's Brown-Forman Liquor Industry Connection

“…The founding Brown family…owns more than 70 percent of Brown-Forman’s voting shares…In 1995 Brown-Forman formed a joint venture with Jagatjit Industries, India’s third-largest spirit producer…”

--Hoover’s Handbook of American Business in 2008

Obama Campaign National Finance Chair Barzun’s Brown-Forman Liquor Industry Connection

Transnational liquor corporations like the Louisville, Kentucky-based Brown-Forman Corp. exercise a special influence in the world of U.S. politics. As Evan Mackinder observed in a Mar. 23, 2011 article, titled “Politics on Tap: Alcohol Producers Pour Out Campaign Cash for Parties,” that was posted on the Center for Responsive Politics’ Open Secrets blog:

"Whether you prefer your wine red or white, your spirits on the rocks or your beer frosty cold, chances are your bartender is pouring a drink infused with politics.

“Many of the most recognizable brands lining store shelves are made by companies that contribute heavily to federal-level politics, according to a Center for Responsive Politics analysis of campaign finance data…Sometimes an alcohol company's partisan preference isn't easy to discern.

“Anheuser-Busch…has given fairly evenly to Democrats and Republicans during the past two decades….The company has…veered toward Democrats, giving 55 and then 60 percent of contributions to the party during the 2008 and 2010 election cycles.

“And then there's Brown-Forman Corp., which owns two popular brands in Jack Daniels whiskey and Southern Comfort liqueur. The Louisville, Ky.-based company with operations throughout Appalachia has contributed slightly more to Democrats in recent years...Phil Lynch, vice president of corporate communications and public relations of Brown-Forman, says there is no partisan bent to his company's political action committee giving -- just a focus on influencing topics that affect the alcohol industry.

“`We base our contributions not on whether the politician is a Democrat or a Republican or an independent, but on where they stand on our issues,’ he told OpenSecrets Blog.

“Lynch argues that the alcohol industry is highly regulated and heavily taxed by the federal government, and that Brown-Forman wants to make sure that `if new regulations are proposed, [it] can present [its] case.’ And to that degree, the company focuses its giving on politicians in states such as Kentucky or Tennessee, where it's based, and on the chairmen of influential congressional committees….”

  And, coincidentally, the wife of 2012 Democratic Obama Presidential Campaign National Finance Chair Matthew BarzunBrooke Brown Barzun—apparently still owned over 3. 9 million shares of Brown-Forman corporate stock, worth over $350 million, in July 2012, after selling over $27.2 million worth of her Brown-Forman stock on June 26, 2012, according to a recent SEC filing.

In an obituary for former Brown-Forman CEO and Chairman Owsley Brown II (who also sat on the corporate boards of Louisville Gas & Electric, NACCO Industries, Hilliard Lyons Trust, E.O.N.U.S. Capital and River Fields Inc. in recent years) that appeared in the Sept. 29, 2011 issue of the New York Times, Susanne Craig indicated in the following way how Obama Campaign National Finance Chair Barzun has been connected to Brown-Forman in recent years:

Owsley Brown II, who expanded his family’s Kentucky liquor company to reach a global market for its brands, among them Jack Daniel’s Tennessee Whiskey, Southern Comfort and Finlandia vodka, died on Monday in Louisville, Ky…. Matthew Barzun, a son-in-law, said the cause was complications of pneumonia.

Mr. Brown was a former chief executive of Brown-Forman, the company founded in Louisville in 1870 by his great-grandfather George Garvin BrownMr. Barzun, a former United States ambassador to Sweden and now President Obama’s national campaign finance chairman, said Mr. Brown `deserves credit for turning a great American company into a great global company.’

“He said his father-in-law favored tradition and quality, be it in his choice of drink, his vision for Brown-Forman or his hopes for Louisville….”
According to an August 20, 2012 article by Professor David Jernigan of the Johns Hopkins University School of Public Health’s Center on Alcohol Marketing and Youth [CAMY], in the United States alcohol is “responsible for 4,700 deaths among those under 21 every year,” “alcohol kills more teenagers every year than any illegal drug,” and “adolescent alcohol use plays a substantial role in all three leading causes of death among youth -- unintentional injuries (including motor vehicle fatalities and drownings), suicides, and homicide.” Yet according to the same article:
“Youth exposure to alcohol advertising on U.S. television increased 71 percent between 2001 and 2009…In 2009, 13 percent of youth exposure came from advertising placed in violation of the [liquor] industry's voluntary threshold….Close to one-third of alcohol advertising placements [on U.S. radio] occur when proportionately more youth were listening than adults age 21 and above. Approximately 9 percent of all alcohol product advertisements aired on programming with underage audiences in violation of the industry's voluntary standard…The content of alcohol ads placed in magazines is actually more likely to be in violation of industry guidelines if the ad appears in a magazine with sizeable youth readership. Examples of violations include showing ads appearing to target a primarily underage audience…”

  In a May 14, 2012 Advertising Age article, titled “Hard Time: Liquor Advertising Pours Into TV,” E. J. Schultz also described how liquor industry corporations like Brown-Forman have been allowed to use the profits they obtain from their sale of alcoholic beverages around the globe to spend a lot more money on television commercials during the U.S. election year of 2012:
“…Broadcast networks have loosened their rules, creating more opportunities for national buys. CBS, for instance, began accepting liquor ads during late-night programming within the last year. ABC has been taking hard-booze during "Jimmy Kimmel Live" for several months. And this spring, NBC began accepting spirits shows airing after 11 p.m. astern as long as 90% of the audience is of legal drinking age…. More broadcast deals are `in the works,’ one industry insider told Ad Age.

“TV grabbed $142 million in advertising from liquor brands in 2010, or about 34% of all media spending by the category. That's up from $102 million and 23% just five years earlier, according to the latest data available provided to Ad Age by the Distilled Spirits Council of the U.S. (Discus), a liquor trade group. Magazines led with a 41% share, though that was down from 58% in 2005.

“Liquor brands' TV spending fell to a little more than $141 million last year, according to Kantar Media. But it seems poised to grow again in 2012… Liquor ads did not appear on any TV, national or local, for much of the 20th century, with the industry honoring a self-imposed ban from 1948 to 1996….A growing number of TV affiliates have begun taking ads in recent years, and marketers have found more opportunities on cable networks such as Comedy Central, E! and ESPN. Cable still gets more than 90% of the spending, according to Kantar.

“But the new acceptance from broadcast networks is a victory for the spirits industry, which has sought parity with beer and wine since it lifted the ban…. TV is benefiting from aggressive innovations as marketers seek awareness on fresh offerings such as flavored whiskeys and other line extensions…Even brands that swore off TV are back.

"Take Brown-Forman's Southern Comfort. It moved to an all-digital strategy in 2009, telling Ad Age then that it was having a hard time breaking through the spirits brands crowded into a few nightly cable shows. But SoCo returned to TV in 2010 and 2011 to launch lime- and pepper-flavored versions.

“The brand's TV investment will grow this year, a spokesman said, because `we've seen increased consumer response during the time periods when we are on air.’"

  According to a 2006 study by Columbia University’s National Center on Addiction and Substance Abuse [CASA], titled “The Commercial Value of Underage Drinking and Adult Abusive and Dependent Drinking to the Alcohol Industry,” underage drinkers and pathological drinkers (those that meet the clinical DSM-IV criteria for alcohol abuse or addiction) consume between 37.5 percent and 48.8 percent of the value of alcohol sold in the United States and are apparently the U.S. liquor industry’s most valuable customers.

As a “bundler” for Obama’s 2012 re-election campaign, Obama Campaign National Finance Chair Barzun has personally raised over $899,000 in campaign contributions for the Obama Campaign according to the Center for Responsive Politics’ Open Secrets website. And Garvin Brown of Brown-Forman made a $30,800 campaign contribution to the DNC Services Corporation on January 21, 2012, while George Garvin Brown IV of Brown-Forman made a $30,800 campaign contribution on December 19, 2011 to the DNC Services Corporation, according to the same website.

So a re-elected Democratic Obama Administration is not likely to work too hard to decrease the special influence of liquor industry firms like Brown-Forman in the U.S. political or media world, tax its alcohol industry profits too heavily, or legalize marijuana—even though the use of marijuana would be likely to reduce the amount of pathological drinking among youth.

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