India is set to announce new rules banning surrogate liquor ads and sponsorships, impacting marketing strategies of major alcohol brands like Carlsberg, Pernod Ricard, and Diageo. Read more on the upcoming regulations.
New Delhi, India, Bollywood Fever: India, which prohibits direct advertising of liquor, is poised to announce extensive new rules that will also ban surrogate ads and event sponsorships. This development could compel companies such as Carlsberg, Pernod Ricard, and Diageo to revise their marketing strategies.
These “surrogate ads” typically circumvent the ban by promoting unrelated products like water, music CDs, or glassware, adorned with the branding of their main alcoholic products and often endorsed by popular Bollywood stars. Now, these could incur fines for companies and bans for celebrities endorsing misleading tobacco and liquor ads, according to Nidhi Khare, the top civil servant for consumer affairs, and draft rules reported by Reuters.
“You can’t take a circuitous way to promote products,” Khare told Reuters, adding that the final rules are expected to be issued within a month. “If we find ads to be surrogate and misleading, then even those who are endorsing (products), including celebrities, will be held responsible.”
For instance, Carlsberg promotes its Tuborg drinking water in India with an ad featuring film stars at a rooftop dance party, bearing the slogan “Tilt Your World,” which echoes its beer ads globally with the message: “Drink Responsibly.” Similarly, Diageo’s YouTube ad for its Black & White ginger ale, which has garnered 60 million views, features the signature black-and-white terriers from its scotch brand.
These changes pose a significant shift for liquor makers in India, the world’s eighth-largest alcohol market by volume, with annual revenues estimated at $45 billion by Euromonitor. India’s growing affluence makes it an attractive market for companies like Kingfisher beer maker United Breweries, part of the Heineken Group, which holds over a quarter of the market share by volume. Diageo and Pernod Ricard, popular for their whiskies, together hold about a fifth of the market share, with India contributing approximately a tenth of Pernod’s global revenues.
The new rules prohibit “surrogate advertisements,” extending to sponsorships and ads for products deemed “brand extensions” that resemble alcohol brands, as per the draft. Penalties under the new rules, based on consumer law, include fines up to 5 million rupees ($60,000) and endorsement bans for promoters ranging from one to three years.
Carlsberg declined to comment, while other companies did not respond to Reuters’ queries, including those about non-alcohol product sales. The International Spirits and Wines Association of India, representing Diageo and Pernod, is in talks with the government and supports advertising of genuine brand extensions, according to its outgoing chief executive, Nita Kapoor.
The World Health Organization (WHO) states that bans or comprehensive restrictions on alcohol advertising are cost-effective measures for public health. WHO data indicates that India’s per capita alcohol consumption will rise to nearly 7 liters by 2030, from about 5 liters in 2019, while China’s consumption will drop to 5.5 liters in the same period. Additionally, India has 38.5 alcohol-related deaths per 100,000 people, compared to 16.1 in China.
Khare mentioned that India’s draft rules were influenced by global best practices, such as those in Norway, which bans alcohol ads and other goods using liquor brand features, contributing to reduced alcohol sales over time. The new rules explicitly target efforts to circumvent current bans by marketing items like soda or music CDs with similar branding to alcohol products.
Warnings have already been issued to some liquor companies, including Pernod, and domestic tobacco firms to halt misleading ads, according to a senior government source speaking anonymously. While India does not oppose brand extension ads, it insists they accurately depict the product rather than creating the impression of advertising a liquor brand.
For example, a video promoted by Pernod for glassware associated with its whisky brand Blenders Pride features Bollywood star Alia Bhatt on a fashion ramp under disco lights, with a logo similar to the whisky brand, but no actual glassware products shown. The video appears on the Blenders Pride Glassware Fashion Tour website.
These new regulations signal a substantial change in how liquor brands can market their products in India, aiming to close loopholes and promote clearer consumer information.
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