Section 205(e)(2) of the Federal Alcohol Administration Act prohibited statements of alcohol content on beer labels unless required by state law. Coors applied for approval of labels and advertisements disclosing the alcohol content of its beer, but BATF rejected the application under the Act. The Government defended the ban as necessary to prevent brewers from engaging in "strength wars," meaning competition based on alcohol potency. The lower courts found insufficient evidence that the labeling ban directly advanced that interest, and Coors challenged only the labeling ban before the Supreme Court.
Issue
Does the federal prohibition on displaying alcohol content on beer labels violate the First Amendment's protection for commercial speech because it does not directly and materially advance the Government's asserted interest in preventing strength wars and is more extensive than necessary?
Rule
Under Central Hudson, truthful and nonmisleading commercial speech about lawful activity may be restricted only if the Government asserts a substantial interest, the restriction directly advances that interest in a direct and material way, and the restriction is not more extensive than necessary to serve that interest. Mere speculation or conjecture is insufficient; the Government must demonstrate that the harms are real and that the restriction will materially alleviate them.
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Congress bars canned hard-cider producers from stating alcohol-by-volume on product labels nationwide, claiming the ban prevents competition based on potency. But federal regulations still allow those producers to disclose alcohol content in magazine and online advertisements in most states, and several states require alcohol-content statements on certain related beverages. A cider maker in Portland, Oregon challenges the label ban after its labels are rejected.
Is the label ban likely constitutional under the First Amendment?
Explanation. Under Central Hudson as applied by the majority, truthful and nonmisleading commercial speech may be restricted only if the government shows a substantial interest, that the restriction directly and materially advances that interest, and that it is not more extensive than necessary. A scheme is suspect when its own exceptions and contrary rules undercut the asserted objective. If potency disclosures remain allowed in advertising and elsewhere, the government cannot persuasively show that banning labels alone will materially suppress potency-based competition.