Issue #9 December 2020
Here is the recipe (just in time for the holidays):
1-part corporate crime
1-part bad ass marketing
1-part self-regulation (inert)
Optional: 1-part permissive regulation by government (also inert)
Stir very, very gently. Serve over and over and over and…
You may remember television ads in 2010 for Guelph Ontario brewer, Sleeman. (The brewer has been owned by Japanese brewer Sapporo since 2006.) The theme of the Sleeman ads featured the brewer’s “notorious” activity during alcohol prohibition in Canada and hinted at clandestine collaboration with infamous gangster Al Capone.
Intrigued, Guelph historian Micheal Matchett investigated the historical documentation and discovered that the celebrated notorious activity simply did not happen.
Matchett’s investigation discovered that Sleeman did indeed export beer to the United States, but only when it was legal to do so. As far as smuggling during prohibition was concerned, the company appears to have been squeaky clean. Nor was there any evidence of Sleeman ever having been in business with Al Capone, a partnership that Matchett described as “highly unlikely”.
It appears that Sleemans notorious ad campaign hoped to appeal to a youthful, rebellious, perhaps even Libertarian demographic that would respond favourably to the notorious theme of defying government policy and the law. But it was a fabrication. Of course, fantasy is not exactly foreign territory for alcohol advertising.
Matchett did discover, however, that the Sleeman family had been tried in court for tax evasion, for which the family brewed up an evasive, yet hoppy, defense that it had no idea of what had happened to its financial records. Not so squeaky clean after all. Of course, tax evasion does not carry quite the same bad ass marketing mystique as illegally selling beer to a prominent gangster.
This is not to say that there was no illegal smuggling of alcohol from Canada to the US during prohibition. Matchett discovered that federal records named several Canadian alcohol manufacturers as violators including brewers O’Keefe, Carling, and Labatts, as well as distillers Seagrams and Canadian Club. But there was no record of such activity by Sleeman.
You might imagine that smuggling was no longer an issue once prohibition ended. You would be wrong. I would recommend a book by Norman Giesbrecht and colleagues called Sober Reflections which documented two decades (1980 to 2000) of alcohol industry indifference to the rule of law and protection of public health. The book describes smuggling operations involving hundreds of legal drinking establishments in Canada. It also reported industry-launched disinformation campaigns to manipulate public opinion in favour of policy that was friendly to the industry. There are also accounts of aggressive lobbying campaigns, and bribery of elected officials with campaign contributions. Reports also exposed the industry’s true colours in its philanthropy. Alcohol producers would brandish threats to withdraw charitable donations if government did not grant them the permissive regulatory provisions they desired. Al Capone just might be impressed.
Criminality in the Canadian licensed alcohol industry did not end with the turn of the century. In 2015, a Quebec winery was found to have sold over two million bottles of its wine on the contraband market, avoiding the payment of at least $14 million in provincial taxes. The operation was apparently not confined to Quebec. The former CEO of an Ontario winery was among the twelve individuals arrested on charges of fraud, conspiracy to commit fraud, and recycling the proceeds of crime. We should probably not expect this case to become the focus of a high-profile bad ass ad campaign.
The Quebec-Ontario case checks all the boxes for an organized crime operation. Similar examples have also been documented in the licensed tobacco and cannabis trades. And yet, in many drug policy discussions, and in most media coverage, the organized crime narrative remains typically confined to the trade in illegal drugs.
There is relatively little recognition that organized crime also flourishes within the legal drug trade throughout most parts of the world, including Canada. Remember part of the Canadian Liberal Party’s proclamation for legalizing cannabis: “…keep profits out of the hands of criminals…”. Since Canada’s legalization of cannabis, large, licensed cannabis companies have engaged in an almost relentless crime wave. That is a story for future posts.
When drug companies are caught breaking the law, government- or court-imposed financial penalties are almost never substantial enough to achieve an effect of deterrence. Fines and settlements are simply seen by industry as the cost of doing business. The anticipated costs can be written into a business plan and easily covered with the profits generated. When it comes to relationships between government and drug industries, there is no such thing as the much lauded “strict regulation”. I like to call it the unicorn of drug policy – a lovely, but fictitious, creature.
In many cases, we have well-written legislation and regulations. The problem lies with chronic permissive enforcement and consequences that do not motivate corporate or personal propriety. For the most part, fines and settlements punish shareholders, not the executives who perpetrate – almost always with impunity. The executives may lose their jobs over a scandal. But when they are once again game-ready, they will be sipping cocktails in a high-end venue, negotiating their next six-to seven figure salaried position – with attractive stock options. No deterrence there.
Nor do settlements typically result in improved legislation or enforcement, or in new policy measures that improve public health protection.
The perilous state of drug industry regulation is something that most drug industries, government regulators, and even most drug policy analysts appear reluctant to publicly discuss. That is a problem.
So, are marketing campaigns that valorize corporate crime (like that of Sleeman) a tactic of the past? Apparently not. An Ontario winery named Organized Crime Winery brands its operations using classic gangster lingo, including “the scene”, “the goods”, “the score”, “the hideout”, and “the take”. In terms of actual criminal activity, the winery is squeaky clean, so far.
But the chosen branding tactic raises an interesting question. Is this just playful branding – the art of persuasion practiced with a provocative edge that is ultimately benign? Or does this tactic deploy a genre of rebellious humour that, at some subtle level, desensitizes us to the very real and harmful problem of corporate crime? I am reminded of a passion-filled exclamation from a participant attending a presentation I gave a couple years ago: “They’re not criminals, they’re businesspeople!” Really? These are mutually exclusive constructs? Awareness of a substantial body of evidence would prompt a different perspective.
As your organizations continue to rely upon virtual arrangements for educational events, please consider including drug policy issues. There is so much to learn and so much to be done.
Mike DeVillaer
December 7, 2020