Liquor foes unite. Tax hike, ad restrictions sought. CHALLENGE TO DRINKING

Last fall, the chief executive officer of the Dow Chemical Company took an unusual step. Along with 17 other CEOs, Paul Oreffice signed a petition calling on Congress to increase alcohol excise taxes, something it has not done in the case of beer and wine since 1951. The move prompted the liquor industry to respond. The Observer, a publication of the Pennsylvania liquor industry, reported that some liquor wholesalers ``ceased doing business with the petition signers.'' Philip Morris, which owns Miller Breweries, canceled orders from Dow for chemicals used in making cigarettes.

According to the Observer, the pressure ``had its intended effect.'' Four of the CEOs backed away from the petition. Dow's Mr. Oreffice held firm, however. As it turned out, the chemical in question was in short supply, causing Philip Morris to resume its orders.

Mary Taylor, a Philip Morris spokeswoman, did not comment on this episode. But she drew a connection between the alcohol excise tax and that on tobacco.

``Dow has a very good reason to want to see the excise tax increased,'' she says. ``It makes Nicorette gum,'' a product promoted as helping smokers quit. Higher excise taxes would be ``one more reason for people to quit smoking.''

Linking the two issues in this manner may not be as far fetched as it seems. Producers of alcoholic beverages these days are under mounting social and political pressure, of a kind the tobacco industry began to feel a decade or two ago.

``I happen to think tobacco and alcohol are on parallel tracks'' in terms of public policy, says Jerry McCord, head of the South Carolina Commission on Alcohol and Drug Abuse. ``Only alcohol is six to eight years behind.''

On one side, the industry is beset by an outbreak of temperance among the American public. Sales are flat or declining, except mainly for coolers, those fizzy, soft-drink-like beverages that producers are marketing heavily. (Another growth category is the so-called ``wino wines,'' popular among homeless alcoholics.)

At the same time, concerns about alcohol are penetrating the political arena. Traditionally, the alcoholism field focused almost exclusively on the ``problem drinker,'' the alcoholic, and did not question larger social influences, such as advertising, that affect the way the country views drinking.

Now that's changing. Alcoholism activists date their independence to 1978, the year that the National Council on Alcoholism and other organizations came out for warning labels like those on cigarettes.

``The warm and fuzzy relationship between the alcohol industry and the alcohol-problem and alcoholism field suddenly went `Bang!','' says Karst Besteman of the Alcohol and Drug Problems Association of North America. ``It will never be the same.''

The result has been a push for such measures as excise-tax increases, restrictions on advertising, and warning labels. Sports stadiums are providing alcohol-free zones, much as restaurants and airplanes have offered no-smoking sections.

While still united, moreover, the three main alcoholic beverage industries have shown some strains in their ranks. For example, so-called hard-liquor companies - most notably Seagram - are tired of being portrayed as the bad guys, even though the alcohol in beer is no more benevolent than that in gin.

At the same time, the wine industry has cultivated an image of moderation and good taste, at least until the coolers. Some in that industry are upset by what they see as brazen advertising of the beermakers.

Michael Mondavi, president of the Robert Mondavi Winery, told an industry gathering several years ago that it is ``immoral how they [the brewers] are pandering to youth.''

On top of this, alcoholic-beverage makers are starting to face the kind of liability suits that cigarette companies have been fending off.

Four parents in Washington State are suing seven liquor companies alleging that their children were born with disabilities related to alcohol. They also allege the companies should have put labels on their beverages warning that drinking can harm a fetus.

People in the industry regard such attacks as unfair. They point out that alcohol is legal, and that - unlike tobacco - many people consume it without apparent ill effects. Some doctors contend that moderate drinking - wine in particular - can have health benefits.

The alcoholic beverage industry also argues that - again unlike tobacco companies - it has been active in such causes as opposing drunken driving and helping to train bartenders to deal with people who are intoxicated.

``We are serious and concerned and active,'' says James Sanders of the Beer Institute. ``You name it and we are active in it.''

These activities have themselves been the source of controversy. While applauding efforts to combat drunken driving and the like, some people in the field say that industry contributions at times have kept the alcohol debate focused on a narrow range of issues.

``The alcoholic beverage industry has been steering alcohol policy in this nation,'' says Edie Clark of the division of Substance Abuse Services in the state of Michigan.

An example often mentioned is Students Against Driving Drunk (SADD), which has received industry contributions. SADD refrains from issues such as alcohol advertising, labeling, or excise taxes. Jennifer Sussel, a Long Island, N.Y., high school student and an officer in her local SADD chapter, says the national organization would not open its newsletter to her efforts to mount an alcohol warning label campaign.

``SADD's about not driving drunk, not about not getting drunk,'' says Christine Lubinski of the National Council on Alcoholism. (SADD officials did not return reporter's calls.)

People in the field of alcohol policy say there is a similar influence in the news media, which the alcohol industry supports with about $1.4 billion worth of advertising annually.

An example is an organization called Remove Intoxicated Drivers, based in Schenectady, N.Y., which was founded two years before the better-known Mothers Against Drunk Driving (MADD). Doris Aiken, RID's founder and president, says the national media started ignoring the group when it came out against alcohol advertising on TV.

Leslie Arries, president of WIVB-TV in Buffalo, does not dispute this. ``You don't go all out with somebody trying to hit you over the head with a big stick,'' he says. ``MADD and SADD [which get substantial coverage] weren't trying to hit us on the back.''

Mr. Arries says WIVB devotes considerable attention to the drunken driving problem. ``We're still trying to make the public aware,'' he says.

Alcohol activists point to the Media Partnership for a Drug Free America, a coalition of ad agencies and networks that has mounted the largest public-service ad campaign since World War II. The White House policy adviser on drugs urged that alcohol be included in this campaign, because it's a ``gateway drug,'' according to Neil Romano, a spokesman for that office.

But alcohol will not be included. ``We could not stretch our resources,'' a spokesman for the coalition explained.

Politically, the alcohol industry is still strong. A grass-roots network of wholesalers, package stores, restaurants, and bars gives it what North Carolina's Mr. McCord calls ``an awesome amount of political clout.'' It probably doesn't hurt the industry politically that alcohol consumption per person in the nation's capital is the highest in the United States.

The political presence of the alcohol industry is perhaps best seen in California, the hub of America's wine industry. Taxes on wine there are the lowest in the country, and they have not changed since 1938, when the Legislature halved them from 2 cents a gallon to just 1. (In most states the tax is closer to 50 cents, or more.)

Last year, the Legislature considered a bill to require labels warning pregnant women against drinking. (Medical authorities say drinking contributes to between 3,000 and 4,000 birth defects a year in the state.) Thirty-one members of the state Assembly, from both parties, had pledged to support such legislation.

But when the vote came, 15 of those backed off, and four did not vote at all.

``They were very effective,'' says Assemblyman Lloyd Connelly, the bill's sponsor, speaking of the alcohol lobby. ``They make substantial campaign contributions'' ($1 million to the California Legislature, according to Harvey Chinn, legislative director of the California Council on Alcohol).

Among alcohol activists in the state, spirits are high nevertheless. Several months ago, a letter appeared in a wine industry publication soliciting background information on Assemblyman Connelly and others involved in that cause. Jim Schultz of the San Francisco office of Consumers Union was one. ``I've been meaning to write back and send them a r'esum'e,'' he says.

Second of two articles. The first ran yesterday.