Reversing a long-standing prohibition against alcohol ads, the Charlotte Area Transit System now allows beer and liquor advertisements outside city buses and trains.

The cash-strapped transit system believes the ads can generate up to $600,000 annually and said the ads could debut in two or three weeks.

But the move is controversial, with some saying it’s a short-sighted decision.

In addition, the change could put CATS in a difficult position.

A city of Charlotte bus can now be covered with a Budweiser ad. But Mothers Against Drunk Driving might be barred from buying an ad encouraging drivers to stay sober.

The reason is the transit system has kept a ban on “non-commercial” advertising – a restriction that generally applies to nonprofits.

CATS only supports commercial advertising in part to steer clear of religious, political and issue-oriented debates that could be controversial.

In 2000, CATS banned advertising on its buses. Then-chief executive Ron Tober believed that having clean, ad-free buses would help CATS build its brand, which would in turn increase ridership.

But when the recession began crippling CATS finances, new chief executive Carolyn Flowers reversed course. In 2010, the Metropolitan Transit Commission – the governing body for CATS – approved new bus and train ads.

The new ad program – on buses and trains, on ticket stock, and at stations – produced $870,000 in new revenue last year for CATS.

Earlier this year, CATS raised bus and train fares from $1.75 to $2. Had the ad program not been in place, Kinard said the increase could have been as high as 40 cents.

CATS has struggled to maintain existing service since the economic downturn began four years ago. Revenue from the half-cent sales tax that funds transit is down significantly, which has resulted in service cuts and fare increases.

But after opening the door for bus and train ads, the MTC kept some restrictions.

For instance, CATS didn’t accept alcohol or tobacco ads, nor would it accept ads about human sexuality or reproduction.

But in June, the MTC voted unanimously to allow alcohol ads on the outside of buses and trains. The ban on alcohol ads predated the transit system’s earlier ad ban in 2000.

“Beer and liquor ads are already in billboards and sporting events,” said Olaf Kinard, who heads the marketing and communications division of CATS. “There is money being spent here, and just weren’t able to partake in that area.”

Some said the cost of alcohol ads is too high.

Price of ‘magic pot’

“There is plenty of research between the exposure to alcohol ads and underage drinking,” said Michael Scippa, spokesman for the California-based group Alcohol Justice, which calls itself an industry watchdog. “It’s a disturbing trend that cash-strapped local governments think this is a magic pot of money.”

Before the recession, Scippa said the general trend was for transit systems to move away from alcohol ads. But since 2008, some have changed course, opening up buses and trains to beer and liquor ads.

But he applauded a recent decision by the Massachusetts Bay Transportation Authority to prohibit such ads.

Charlotte City Council member John Autry doesn’t serve on the MTC and didn’t vote on the ad change.

He said he’s against the decision.

“Isn’t there someone else who wants to buy those ads instead of alcohol (sellers)?” Autry said.

He also said he would be more comfortable with ads for birth control instead of booze.

“I would go with condoms before I would go with alcohol,” he said.

Kinard said there will be no alcohol ads inside buses or trains, where they would be more visible to children. He said the ads on the outside of buses and trains are similar to billboards, which are already seen by minors.

About 20 percent of CATS rider are under the drinking age of 21.

Charlotte Mayor Anthony Foxx, who is a member of the MTC, declined to comment on the issue.

County commissioner Harold Cogdell, the MTC chair, couldn’t be reached for comment.

Cornelius Town Manager Anthony Roberts, an MTC member, voted for the change.

“At the end of the day, you see it everywhere,” Roberts said about alcohol ads. “As long as it’s tastefully done, it’s OK.”

Ads reviewed

Kinard said any alcohol ad will be reviewed by the city’s legal staff and the state’s Alcohol Beverage Control Commission to ensure it has a “Please drink responsibly” message.

He said CATS can’t take a “pure” nonprofit ad, but it could take an ad for a nonprofit “engaged in a commercial activity.”

CATS wouldn’t accept an ad from Discovery Place that showed “kids doing science experiments indicating that science is fun.” But the transit system could accept a Discovery Place ad that promoted a specific event, giving people information about buying tickets.

When asked whether CATS would accept an ad from MADD, urging people not to drink and drive, Kinard said “we cannot make decisions about what ifs.”

LaRonda Scott, director of NC MADD in Raleigh, said: “I would love to be able to have messaging on buses, to encourage people to drink responsibly, and to not drink and drive.”

She said she would have to study the city policy before commenting on whether it’s fair to her organization.

A for-profit alcohol rehabilitation center might have a stronger case to advertise on CATS buses and trains.