Industry
Cards, glasses & music CDs: Liquor firms may be staring at end of surrogate ads
Summary
- This measure is intended to ensure that children and young people, who are potential customers, are not influenced by surrogate advertisements.
New Delhi: Alcohol manufacturers advertising glass tumblers, playing cards, music CDs and the like to implicitly promote their alcohol brands will need to put a complete stop to these so-called ‘surrogate’ advertisements, unless they can continually prove that these products have a market of their own.
This is the primary drift of new draft rules on surrogate advertising being prepared by the Union consumer affairs ministry, two people directly involved in the process said on condition of anonymity.
“This measure is intended to ensure that children and young people, who are potential customers, are not influenced by surrogate advertisements," the first person said.
“The draft rules are currently being finalized and are expected to be released for public comments within 15 days," the second person said.
The two persons added that as per the new rules, manufacturers will be required to regularly submit market reports on the availability and sales volumes of the advertised products in the retail market.
Besides, certificates of sales must be made available online for public viewing to verify if there are indeed substantial sales of the advertised products.
Drafting new rules
An 11-member committee formed this March is drafting the new rules. The committee is chaired by consumer affairs joint secretary Anupam Mishra and includes representatives of both industry and consumer groups.
The proposed guidelines will be governed by the Consumer Protection Act 2029, which will specifically mention what they (firms) can do and what they cannot.
Queries sent to the consumer affairs ministry remained unanswered till press time.
“It’s work in progress," said Vinod Giri, director general of the Brewers Association of India (BAI) and a member of the committee drafting the new rules. “The mandate is to allow genuine brand extensions while curbing frivolous and irresponsible ones."
Mint had first reported on 14 March on the government's plan to tighten the noose on surrogate advertisements.
Norway vs Britain
During the final round of stakeholder consultations held last week, consumer groups supported adopting the draconian Norway model. Norway's Alcohol Act not only prohibits alcohol advertising, but also products with the same brand or characteristics as alcoholic beverages. Additionally, any promotion of alcohol or related goods/services is considered alcohol marketing. In other words, no surrogate advertising.
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Alcohol industry representatives, on the other hand, advocated following the British model, wherein regulations are created and enforced by the industry rather than by the government, the second person cited above said.
Also read | Govt may issue final rules on misleading ads, surrogate, pesky calls
The new rules aim to strike a balance between industry interests and consumer protection by preventing the overt branding of alcoholic products, the first person said.
Also read | Liquor ads passed off as music CDs? Not for much longer
Surrogate advertising in India
In India, surrogate advertising is a method where brands use alternative products to promote alcohol indirectly, bypassing advertising bans.
Common surrogate products include music albums, CDs, glassware, soda, mineral water, etc., which are branded with the same name as alcoholic beverages to promote that brand of alcohol.
Also, alcohol manufacturing companies sponsor music concerts, cultural festivals, and award shows to target youth – potential consumers of alcohol.
“There will be a clear definition of surrogate advertising in the new rules," the second person said.
Further, the second person added that the new rules will also apply to tobacco products, as manufacturers promote gutkha, a banned item, under the guise of cardamom (elaichi).
Existing rules
Currently, Section 89 of the Consumer Protection Act stipulates that creating a false or misleading advertisement detrimental to consumers can lead to imprisonment for up to two years and a fine of up to ₹10 lakh, with subsequent offences potentially resulting in imprisonment for up to five years and a fine of up to ₹50 lakh.
The CCPA has also brought in separate guidelines on misleading advertisement by IAS coaching institutes, and prevention of greenwashing (making false claims about the environmental benefits of a product). Norms to prevent pesky calls are also on the cards of CCPA.
According to a November 2023 report by the International Spirits & Wines Association of India (ISWAI), India's alcoholic beverage market is predicted to reach $64 billion over the next five years. The sector, which had an estimated market size of $52.4 billion in 2021, constituted about 2% of the nominal GDP.
