New Delhi: India, which prohibits direct advertising of liquor, is set to announce stringent regulations that will ban surrogate ads and sponsorship of events. These changes could compel companies like Carlsberg, Pernod Ricard, and Diageo to revise their marketing strategies.
“Surrogate ads” typically circumvent the ban by showcasing less desirable items, such as water, music CDs, or glassware, adorned with logos and colors linked to their primary product. These ads are often promoted by popular Bollywood film stars. The new rules could impose fines on companies and bans on celebrities endorsing tobacco and liquor ads deemed misleading, according to Nidhi Khare, the top civil servant for consumer affairs. “You can’t take a circuitous way to promote products,” Khare told, as reported by the international news agency Reuters, adding that 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 example, Carlsberg promotes its Tuborg drinking water in India with an ad featuring film stars at a rooftop dance party and the slogan “Tilt Your World,” echoing its beer ads elsewhere, with the message: “Drink Responsibly.” Diageo’s YouTube ad for its Black & White ginger ale, which has drawn 60 million views, features the signature black-and-white terriers from its scotch of the same name.
The changes pose a significant challenge for liquor makers in India, the world’s eighth-largest alcohol market by volume, with annual revenues estimated at $45 billion by Euromonitor. Growing affluence among its 1.4 billion people makes India a lucrative market for companies like United Breweries, part of Heineken, which holds more than a quarter of the market share by volume. Diageo and Pernod Ricard together have about a fifth of the market share, with India contributing roughly a tenth of Pernod’s global revenues.
The new rules call for a “prohibition against engaging in surrogate advertisement,” extending to sponsorships and ads for products viewed as “brand extensions” that share characteristics with an alcohol brand. Penalties under the new rules, derived from consumer law, include fines of 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 on sales of non-alcohol products.
Members of the International Spirits and Wines Association of India, which represents Diageo and Pernod, “are committed to a compliant way of building brand extension businesses,” said its outgoing chief executive, Nita Kapoor. The group was in talks with the government and supported advertising of “genuine” brand extensions, she added.
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Impact on Health
The World Health Organization states that bans or comprehensive curbs on alcohol advertising “are cost-effective measures” in the interest of public health. Its 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 is expected to drop to 5.5 liters. Alcohol-related deaths in India stood at 38.5 per 100,000 people, compared to 16.1 in China.
Khare mentioned that India’s draft followed a review of global best practices in countries like Norway, which bans ads for alcohol and other goods that rely on features of a liquor brand, a measure researchers say has reduced alcohol sales over time. The new draft rules prohibit marketing items such as soda or music CDs using a “similar label, design, pattern, logo” to that of alcohol products, explicitly targeting efforts to circumvent current bans.
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Ads for items like glasses and soda cans allow “brand names to appear in all their ads, creating its recall value for the consumers,” the draft states. The new rules follow warnings to some liquor companies, such as Pernod, and domestic tobacco firms to halt misleading ads, a senior government source said on condition of anonymity. India is not against brand extension ads, the official added, but wants them to properly depict the product being showcased, rather than giving consumers the impression that the ad is for a liquor brand.
One video promoted by Pernod, ostensibly for glassware linked to its whisky brand Blenders Pride, features Bollywood star Alia Bhatt walking a ramp under flashing disco lights, saying, “My life, my pride.” Although it has a logo similar to the whisky brand, the video, which also appears on the Blenders Pride Glassware Fashion Tour website, shows no glassware products.
