India plans tougher ad curbs on liquor makers such as Carlsberg, Diageo, Pernod

United Breweries

05/08/2024 24:30

(This is a repeat of an item issued on Sunday)

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      India's new rules could reshape alcohol advertising
    

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      Stakes are high for Pernod, Diageo in $45-bln market
    

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      New rules to ban ads that mislead consumers
    

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      Industry in talks with New Delhi, rules likely in a month
    

  
    By Aditya Kalra
       NEW DELHI, Aug 4 (Reuters) - India, which bans direct
advertising of liquor, is set to announce sweeping rules that
will bar even surrogate ads and sponsoring of events, which
could force firms such as Carlsberg, Pernod Ricard and Diageo to
redraw marketing campaigns.
    Such "surrogate ads" often get round the ban by ostensibly
showing less desirable items instead, such as water, music CDs
or glassware garbed in logos and hues linked to their key
product, and often promoted by popular Bollywood film stars.
    Now they could bring fines for companies and bans for
celebrities endorsing tobacco and liquor ads deemed misleading,
according to the top civil servant for consumer affairs and
draft rules being reported for the first time by Reuters.
    "You can't take a circuitous way to promote products," the
official, Nidhi Khare, told Reuters, adding that final rules
were 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, brewer Carlsberg promotes its Tuborg drinking
water in India, with an ad showing film stars at a rooftop dance
party and the slogan "Tilt Your World", which echoes its beer
ads elsewhere, emblazoned with the message: "Drink Responsibly".
    Competitor 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 threaten a seachange for liquor makers in India,
the world's eighth-biggest alcohol market by volume, with annual
revenues Euromonitor estimates at $45 billion.
    Growing affluence among its 1.4 billion people makes India a
lucrative market for the likes of Kingfisher beer maker, United
Breweries  UBBW.NS , part of the Heineken  HEIN.AS  Group, which
has more than a quarter of market share by volume. 
    Popular for their whiskies, Diageo  DGE.L  and Pernod
 PERP.PA , taken together, have a market share of about a fifth,
while for Pernod, India contributes about a tenth of global
revenues.
    The new rules call for "prohibition against engaging in
surrogate advertisement", which extends to sponsorships and ads
for products viewed as "brand extensions" that share the
characteristics of an alcohol brand, the draft said.  
    Penalties under the new rules rely on consumer law, opening
manufacturers and endorsers to fines of up to 5 million rupees
($60,000), while promoters risk endorsement bans running from
one to three years. 
    Carlsberg  CARLb.CO  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.
    
    HEALTH IMPACT
    The World Health Organization says bans or comprehensive
curbs on alcohol advertising "are cost-effective measures" in
the interest of public health. 
    Its data shows India's consumption of alcohol per person
will rise to nearly 7 litres in 2030, from about 5 litres in
2019, a period over which fellow Asian giant China's consumption
will drop to 5.5 litres.
    And alcohol-related deaths in India stood at 38.5 for every
100,000 of its population, versus 16.1 for China.
    Khare said India's draft followed a review of global best
practices, in countries such as Norway, which bans ads for
alcohol and other goods relying on features of a liquor brand,
in curbs that researchers say have cut alcohol sales over time. 
   
    The new draft rules prohibit marketing of items such as soda
or music CDs employing a "similar label, design, pattern, logo"
to that of alcohol products, explicitly targeting efforts to get
around current bans.
    Ads for items such as glasses and soda cans allow "brand
names to appear in all their ads, creating its recall value for
the consumers," however, the draft states.
    The new rules follow warnings to some liquor companies, such
as Pernod, and some domestic tobacco firms to halt misleading
ads, a senior government source said, speaking 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 India video promoted by Pernod, ostensibly for glassware
products linked to its whisky brand, Blenders Pride, shows
Bollywood star Alia Bhatt walking a ramp under flashing disco
lights, and saying, "My life, my pride."
    While it has a logo similar to that of the whisky brand, the
video, which also appears on the website of the Blenders Pride
Glassware Fashion Tour, shows no glassware products.

 (Reporting by Aditya Kalra; Editing by Clarence Fernandez)
 ((aditya.kalra@thomsonreuters.com; @adityakalra;))