You Can Discount the Drink. But Don’t Tell Anyone? Missouri’s Alcohol Advertising Fight

Ashley Brandt

10 years ago

Beer beside a happy-hour chalkboard with a price covered by a red Censored strip; headline asks, You can discount the drink, but don’t tell anyone?

Originally published in 2017; updated to include the final appellate decision, Missouri’s enforcement response, and the litigation documents.

You can discount the drink. You can tell customers about the discount once they walk through the door. But advertise the same deal outside? Missouri once treated that as a problem.

The first rule of happy hour: don’t talk about happy hour. Or, more accurately, talk about it without telling anyone what makes it happy.

That contradiction drove the challenge to Missouri’s alcohol advertising restrictions in Missouri Broadcasters Association v. Lacy, 846 F.3d 295 (8th Cir. 2017). The court explained that a lower price “does not necessarily mean any consumption of that alcohol is irresponsible.” Opinion, p. 8.

For suppliers, wholesalers, and distributors, the useful question reaches beyond happy-hour specials: when a regulator restricts truthful advertising, what evidence connects that restriction to the problem it supposedly solves?

What Missouri’s alcohol advertising rules restricted

The original opinion, pp. 2–3, describes three restrictions:

Retailers could offer discounts and promote them inside their establishments, but could not advertise specific discounts outside.
Retailers faced a separate restriction on advertising prices below their actual cost.
Producers and wholesalers identifying retail outlets had to list at least two unaffiliated retailers, omit retail prices, and keep the retailer listings inconspicuous.

An interesting way to help consumers find a product: make the information harder to find.

Good intentions still need a connection to the rule

The governing Central Hudson framework asks whether the speech concerns lawful activity and avoids misleading consumers, whether the government claims a substantial interest, and whether the restriction fits that interest. The Court asks whether the rule “directly advances the governmental interest asserted” and whether it remains “not more extensive than is necessary.” 447 U.S. 557, 566 (1980).

Protecting minors and addressing excessive drinking deserve serious attention. Reciting those objectives does not finish the constitutional analysis. The government must connect the challenged speech restriction to the asserted harm.

The case went beyond a promising remand

The first appeal resolved the pleading question: “We reverse the Rule 12(b)(6) dismissal.” Lacy, opinion p. 11. That allowed the challenge to proceed; it did not itself award a final injunction.

After trial, the district court concluded: “Defendants have failed to meet their burden under Central Hudson.” Trial order, p. 18. It permanently enjoined the two advertising regulations and the specified application of the tied-house statute.

The Eighth Circuit then affirmed in Missouri Broadcasters Association v. Schmitt, 946 F.3d 453 (8th Cir. 2020): “We affirm the district court’s judgment.” Opinion, p. 14.

The court found the statutory scheme “so pierced by exemptions and inconsistencies” that its application failed to advance the asserted interest in preventing undue influence. Id., p. 11. On the discount regulations, it agreed that Missouri supplied “no empirical or statistical evidence, study, or expert opinion” demonstrating the claimed protection. Id., pp. 13–14.

Read that as a failure of Missouri’s proof on this record. It does not establish a universal requirement that every advertising rule come with a particular scientific study.

What suppliers and distributors should take from it

Start with the actual advertisement. Save the proposed copy, artwork, audience, placement, and any agency objection. Identify the lawful transaction the ad promotes. A specific rejected campaign gives counsel something concrete to analyze.

Map the exceptions. Compare what the same speaker can say on a sign, a retailer’s premises, a website, and a social post. Then compare suppliers, wholesalers, and retailers. An exception may reveal a gap between the agency’s explanation and the rule’s operation; document the gap before calling it unconstitutional.

Separate the message from the money. Record who pays, who controls the copy, what the retailer receives, and whether the arrangement includes exclusivity or purchasing commitments. A truthful availability announcement and an agreement buying retailer loyalty present different facts.

Ask for the evidence and identify workable alternatives. Seek the studies, enforcement experience, and factual assumptions behind the restriction. Consider whether disclosure, reporting, payment limits, or enforcement against coercion could address the concern while allowing more speech. Those proposals need practical support too.

Check the scope before changing a campaign. Missouri’s result does not automatically invalidate another state’s rule or eliminate federal tied-house obligations. Build the challenge around the applicable text, enforcement position, and evidence.

Missouri’s enforcement response

Missouri ATC’s December 2021 circular identifies the invalidated provisions and also states that the Division “will not be enforcing state regulation 11 CSR 70-2.240(18).” It expressly preserves enforcement of the other advertising provisions. That distinction belongs in any compliance review.

A worthy goal does not answer the question of whether an advertising restriction works. For the industry, asking that second question—and developing the record to answer it—can make all the difference.

Read the opinions, briefs, and enforcement guidance

The documents below are hosted on this site. The briefs present the parties’ and amici’s arguments; the opinions and trial order state the courts’ decisions.