In 1989, two guys named Steve Wagner and Greg Cook––tired of generic, fizzy, yellow beer––decided to open their own brewery, Stone Brewing. Today, Stone is one of the top ten largest craft breweries in the United States. Of course, their success didn’t come overnight. Instead, it was one particular beer that vaulted Stone in the stratosphere of craft brewing royalty: Arrogant Bastard Ale.

While Arrogant Bastard is delicious beer, its marketing was what helped cement Stone Brewing’s reputation. After being called “bastards” who were arrogant enough to think they could compete in the craft brewing industry, Wagner and Cook adopted an age-old marketing ploy: hang a lantern on it, own it, wrap yourself in that memorable insult and dare the consumer to come along. However, not everyone liked this aggressive, boundary pushing beer and the ones that didn’t, turn out to be pretty powerful.

Tune in to episode two of The Right to Drink, where booze expert and host Jarrett Dieterle explains how the government tries to regulate beer labels and why it’s hurting our nation’s entrepreneurial craft beer and spirits industries.

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Transcript: 

Jarrett Dieterle:

The year was 1989. A guy named Steve was kicking around Los Angeles with his band when he rented some space in a recording studio owned by another guy named Greg. Sounds like just another generic down on your luck, LA music story right? Well, it started off that way, but things would take a very different turn. Annoyed by what they called the tyrannical oppression of American drinkers from generic fizzy yellow beer, Steve and Greg decided to open a brewery. By 1996, Steve Wagner and Greg Cook had launched Stone Brewing in San Marcos, California. Today, of course, Stone is one of the top 10 largest craft breweries in the United States. But success, especially that type of success, never just happens overnight. Stone produced some great and even famous beer in its early years, but it was the sensation of Arrogant Bastard Ale that vaulted stone into the stratosphere of craft brewing royalty.

Jarrett Dieterle:

The beer of course is delicious, but the great genius of Arrogant Bastard, wasn’t just its flavor, but its marketing, and using a word like bastard. As Greg Cook told an industry watchdog last year, they started off getting called bastards who were arrogant enough to think they stood a chance in the industry. So what to do, well, Stone adopted an angel marketing ploy, hang a lantern on it, own it, wrap yourself in that memorable insult and dare the consumer to come along. Say things like Arrogant Bastard’s an aggressive beer. You probably won’t like it. The result, Stone’s pioneering marketing style worked so well that breweries across America started adopting their own edgy marketing campaigns and in your face branding styles. And they also started throwing in the occasional curse word too. Today beer names and labels are brilliantly festooned with clever names and edgy artwork, all in a bid to make the consumer remember that beer and then go buy it. I’d like to tell you that the story ends there, a clever little tale of marketing success, but not everyone liked this aggressive, boundary pushing beer and the ones that didn’t, turn out to be pretty powerful.

Jarrett Dieterle:

I’m Jarrett Dieterle, author of Give Me Liberty and Give Me a Drink, and this is The Right to Drink.

Jarrett Dieterle:

(singing)

Jarrett Dieterle:

Hey everybody. And welcome to the show where we talk about drinking and everything that gets in the way. Today we’re taking a scandalous, dive into beer labels and swear words. So you know the origin story of Stone Brewing’s Arrogant Bastard now, but another key early pioneer in the beer world shift to in your face marketing was Flying Dog Brewery originally based in Colorado. But now in Maryland. You see, Flying Dog didn’t want to just be any old brewery. They wanted to push the envelope and make you remember them. So they teamed up with famed artist, Ralph Steadman known for memorably illustrating many of Hunter S. Thompson’s works to design some truly wild and amazing labels for their beers. In fact, one of the founders lived next door to a Hunter S. Thompson, which led to Thompson himself, even penning odes to their delicious brews. And yes, Flying Dog also liked to curse. They released now well-known beers like Raging Bitch IPA and adorned their beers with the tagline, good beer, no shit. It worked.

Jarrett Dieterle:

They’re a perennial top-30 craft brewery in America and Flying Dog has built a rabidly loyal and cult-like fan base that has been known to do things like permanently tattoo themselves with the Flying Dog logo in exchange for discounts in the brewery’s taproom. While Raging Bitch became a favorite among craft beer enthusiasts, not everyone thought it was funny in 2009, the Michigan Liquor Control Commission banned Raging Bitch from being sold in Michigan on the grounds that it was detrimental to the health, safety or welfare of the general public, because it allegedly used sexist terminology. Now it’s important to state up front that sexism should never be condoned. For its part, Flying Dog argues that it came up with the name Raging Bitch because the beer uses El Diablo yeast, which is known among brewers as a raging yeast and that bitch was meant to refer to the original definition of the term, a dog. Flying Dog also claimed that it polled its female employees before releasing the beer and they were strongly in favor of it. And they also point out that some are raging bitches, most virulent fans are in fact women.

Jarrett Dieterle:

But it’s also clear that some breweries in America have adopted names and labels that overtly reference women in ways that could be charitably described as antiquated or accurately described as backwards, childish and stupid, but many feel that Flying Dog’s names and artistic labels fall well within the bounds of legitimate art rather than rote vulgarity or sexism. Regardless of how one comes out on this debate, and again, there are some legitimately less than tasteful beer labels out there. The question is one of, who decides. Should it be consumers or private industry groups like the Brewers Association, which has released guidance regarding what it deems as offensive beer labels, or should it be the government? Problem with having the government do it is twofold. It’s really hard line to police. And it also runs squarely into something called the first amendment. Flying Dog hired attorney Alan Gura to sue Michigan for banning its beer, arguing that it had a first amendment right to express itself via its labels and artwork and to communicate with its customer base.

Jarrett Dieterle:

As Alan recalls,

Alan Gura:

And so the Michigan Liquor Control Commission took the position that to have a beer called Raging Bitch with artwork by Ralph Steadman showing a dog and perhaps the angry and they claimed a sexually suggestive pose was detrimental to the health, safety or welfare of the general public. They were quite, quite peeved at the offensive allegedly nature of this word and of this product and Flying Dog’s position was, look even if the beer is sexist or offensive and we don’t think it is, but even if it were, I mean, Flying Dog has the right to express itself and the solution to speech you don’t like is perhaps to avoid it, don’t buy the beer or put out a product with languages you might prefer, but we don’t live in a country where the government can pull products off the shelf because the authorities are offended by the name of the product.

Jarrett Dieterle:

Again, the question is who should decide. The first amendment was designed to protect pretty much every type of speech, even if some people don’t like that speech. Past court cases have protected everything from swear words to violent video games, to pornography under the banner of free speech. And as Michigan itself proved, when the government starts down the road of banning beer labels for the words they contain, it becomes really hard to apply those rules even handedly. At the same time, Michigan was going after Flying Dog over Raging Bitch, it was green-lighting the sale of beers with names like Backwoods Bastard or Big Red Coq, spelled C-O-Q or yeah, Arrogant Bastard. And while Michigan was busy banning Flying Dog’s beer, every other state in the country allowed Raging Bitch to be sold and didn’t seem to find it offensive. Eventually Michigan seemed to recognize this legal reality and commenced a panicked retreat in the middle of the lawsuit.

Alan Gura:

Michigan defended the censorship and they defended this rule initially. They really doubled down, they came to court and opposed our request for an injunction. Somewhere along the way before the judge could decide the injunction, Michigan had a change of heart, they ran to court and they said, “We changed our mind. We’ve read some more first amendment case law, and we’re going to license the beer. We’re going to forget about this rule and no harm, no foul. And the case should simply be dismissed.” Flying Dog was not exactly pleased with that because for one thing, the beer had been banned for a good long time in the state. And there were actual damages that Flying Dog suffered and they wanted to recoup their damages from being censored and being unable to sell their product.

Jarrett Dieterle:

In the end, Flying Dog recouped monetary damages from the state of Michigan, which they then turned around and used to establish a first amendment society. A non-profit dedicated to raising awareness for free speech rights and promoting the arts, journalism, and civil liberties. But then when it comes to beer labels and the first amendment things quickly get even more convoluted than simply banning swear words as we’ll talk about next.

Jarrett Dieterle:

If you’re interested in the things we’re talking about on today’s podcast, be sure to check out my new cocktail book, Give Me Liberty and Give Me a Drink, provides a rollicking recipe pack tour of America’s most insane and laughable booze laws. Give Me Liberty and Give Me a Drink is available from all major and independent bookstores. Also be sure to check out drinksreform.org, our website and weekly newsletter from the R Street Institute, which covers the intersection of alcohol and our legal system.

Jarrett Dieterle:

So, okay. We’ve talked about how governments and states like Michigan try to ban beer labels and names on the grounds that they’re allegedly offensive, but governments can also regulate alcohol labels for much more mundane issues as well. And here the federal government gets to weigh in. The Alcohol and Tobacco Tax and Trade Bureau, known as the TTB and housed within the Treasury Department actually has to preapprove every alcohol label sold across state lines in America. This process is known as a COLA, which is just a jargony acronym for certificate of label approval. Basically it just means that if say an Ohio brewery wants to sell a keg of its beer or a six pack of cans across the border in Michigan, it not only has to pass muster with Michigan’s regulators, but also needs pre-approval from the TTB for its label and name.

Jarrett Dieterle:

As Justin Cox, founder and CEO of Atlas Brew Works in Washington, DC notes, the folks at the TTB are notorious sticklers when it comes to labeling rules, including rejecting Atlas’s very first label application back in 2012.

Justin Cox:

Our logo says Atlas Brew Works District of Columbia on it. That first label got kicked back saying that the address on the label didn’t match our brewer’s license, which says Washington, DC. So I had to change District of Columbia to Washington, DC, to align with that.

Jarrett Dieterle:

Yes, a federal agency, itself based in Washington, DC, didn’t seem to appreciate that everyone recognizes the District of Columbia and Washington, DC are the same place.

Jarrett Dieterle:

Another thing that TTB can be sticklers about is anything, and I mean, anything that can be construed as a health claim on a beer label.

Justin Cox:

One issue that we’ve run into a few times are the TTB saying that we’re making health claims on our labels. So we made a beer called Hot Bot for an event here in DC, and it had a cartoon robot on it and a little story on the side of the can about this robot coming from the future through a couple of universes to come and quench your thirst. And we couldn’t say that the beer was going to quench your thirst on the label because that was considered to be a health claim by the TTB.

Jarrett Dieterle:

And there’s a lot more where that came from as Alan points out.

Alan Gura:

The Treasury Department has rejected a beer label for a King of Hearts beer, which had a playing card image on it because they said that the heart implied that the beer would have a health benefit. They rejected a beer called St. Paula’s Liquid Wisdom, which featured a painting called the Conversion of Paula by St. Jerome, because they said that calling a beer Liquid Wisdom was a medical claim that the beer would grant wisdom. And so that would be misleading. I’m not kidding. There was a beer called Bad Elf that had a sort of a playful elf warning suggesting that elves not operate toy making machinery while drinking the ale. And that was deemed to be confusing to consumers and that was not approved. It was another label for a Danish beer that it featured a hamburger and they turned that one down because the image implied that there was a meat additive in the beer. I mean, we can go on and on and on.

Jarrett Dieterle:

It should be noted that neither Justin nor Alan are necessarily saying that there should be absolutely no regulation of beer labels and names by the government, both point out the clear government interest in preventing false advertising, or obviously untrue statements like, Hey, drink this lager, it will actually improve your health. But the problem is when it goes too far, like claiming King of Hearts with somehow trying to suggest a health benefit for your heart. And the other problem is that for alcohol, unlike almost every other product in America, the government gets to sign off before the product can even go to market. As Justin puts it.

Justin Cox:

It is very rare that you were in an industry where you have to have a pre-approval of a label before you send a product out to market. You know, the cereal box like Kellogg is not submitting their labels to the FDA or the Department of Agriculture before they ship the boxes of Trix out to the grocery stores.

Jarrett Dieterle:

In other words, if we allow cereal producers who, of course, love marketing sugar bomb cereals, jammed with questionable sounding ingredients to send their products to market without getting pre-cleared by the government, then why not alcohol.

Jarrett Dieterle:

Requiring this before fact sign-off hurts mostly small brewers who released scores of experimental and seasonal releases and ones like Atlas Brew Works, who like to have clever names and backstories behind their beers.

Justin Cox:

So our sort of creative process, we do work with an outside creative agency that helps us with the design and creating the actual art. So we internally come up with the beer name and the style, and we kind of come up with a little story and all of our beers have some sort of icon attached to it with a story that ties it into the beer. So that we go through that whole process and now we’re in year seven of dealing with this so we’ve gotten better at it. But towards the beginning, a lot of design revisions in anticipation of what the TTB might say, then submitting. And then once the TTB says, Oh, you can’t say this, or you’re missing the statement on here, we have to go back to the design team, which we have to compensate them for their time. So every tweak or edit that we have to make is a definite monetary cost to us.

Jarrett Dieterle:

The preapproval system for alcohol labels hurt Atlas and other producers, even more during the 2018-2019 government shutdown. During the shutdown, which lasted over a month, the TTB closed its doors. This meant that distillers, brewers, and winemakers across America literally could not release new beers or spirits if they wanted to sell them across state lines.

Justin Cox:

We had been prepping to brew and had brewed our spring seasonal beer called the Precious One, which is an apricot IPA. So the process of making a new beer takes four to six months or so from kind of conception to execution. So in the particular case of the Precious One, we’ve gone through most of that process. We had brewed a lot of beer, added in our tanks fermenting, ready to hit the market. We had a COLA approval for our canned design, but not for our keg color. So we were able to sell cans interstate, but we could only sell the kegs within DC. The government then shut down and as part of that shutdown, the TTB offices were closed. So there was no one in the office to review the label and therefore no one was able to give us the approval or issue that COLA, which would then allow us to legally sell that beer across state lines. And that threw a huge wrench in our process on a number of fronts. So we had planned commitments from retailers. They only have so much shelf space there. And so many draft lines in the bar. We had commitments from bars saying, okay, we will put the Precious One on, ship us the kegs. We’re unable to ship those kegs because we don’t have the COLA label approval and then another brewery comes in and swipes that line.

Jarrett Dieterle:

Well, Atlas, luckily did not have any of its beer go to waste. Other breweries in the country had to actually start giving away beer for free to prevent it from spoiling. Alan ended up representing Justin and Atlas Brew Works in another first amendment case against the TTB preapproval system during the shutdown pointing out that the framework was preventing Atlas’s beer from getting to market and therefore preemptively violating Atlas’s free speech rights to advertise their products to their customers. The shutdown ended before the court was able to issue a ruling on Atlas’s legal argument, and the court dismissed the case saying it was now moot and irrelevant.

Jarrett Dieterle:

But as we all know, politicians in DC love grandstanding, and pretty much everyone expects more and longer government shutdowns in our future, which means more headaches for Atlas Brew Works and our other favorite spots. whether it’s the government trying to decide whether words like bastard are offensive or giving breweries like Atlas, a hard time about robot themed brews that “quench your thirst”. It’s pretty clear that the current system the government uses to regulate beer labels is hurting our nations entrepreneurial craft spirits producers. Heck, it’s enough to make you sweat in frustration and then crack open a beer.

Jarrett Dieterle:

I’m Jarrett Dieterle and I wrote today’s episode of the show. Our show is produced and edited by Greg Benson, host of The Speakeasy and Backbar, a new podcast coming soon from Heritage Radio Network. The music is written, produced and recorded by Jessica Lee Graves. And the cover art for the show is created by Anne Fallon. I’d also like to thank Bill Gray and the R Street Institute, as well as today’s guests, Alan Gura, and Justin Cox of Atlas Brew Works. And if you enjoyed today’s show, check out my new book, Give Me Liberty and Give Me a Drink as well as drinksreform.org. Our next episode will feature a metaphorical road trip to Virginia and Massachusetts to talk about the war on happy hour so be sure to join us in two weeks for more about drinking and everything that gets in the way.