Banning Liquor Surrogate Advertising
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ABOUT SURROGATE BRANDSEven after the ban,
liquor companies continued to advertise their drinks in the form of
surrogate advertisements. In this type of advertisement, a product other
than the banned one is promoted using an already established brand name.
Such advertisements or sponsorships help in brand building and contribute to
brand recall. The product shown in the advertisement is called the
‘surrogate.'The surrogate could either resemble the original product or
could be a different product altogether, but using the established brand of
the original product. The sponsoring of sports/cultural/leisure events and
activities using a liquor brand name also falls in the category of surrogate
advertising.
In late 2000, a group of broadcasters, who were members of the Indian
Broadcasting Foundation (IBF)[5], submitted their recommendations on surrogate
advertising to the I&B Ministry. Under the recommendation, surrogate
advertising would comprise ‘the products of the liquor companies, which do
not have a minimum turnover of Rs 10 million and where the products are not
manufactured in bulk quantity.'
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The broadcasters also urged the government to allow
them to telecast socially responsible advertisements sponsored by liquor
companies. They requested permission to telecast such advertisements
because the Indian television industry's revenues had reportedly
decreased by about 7-11% (about Rs 1 billion per annum) after liquor and
tobacco ads were banned.
After more than six months, in mid-2001, the I&B ministry accepted the
recommendations of the broadcasters. However, this decision was not
formally announced because there was same dispute over the issue of
hoardings of these ads at sports events being broadcast on television.
The I&B Minister Sushma Swaraj said, “We have sought the sports
ministry's comments on the issue and are awaiting their response before
announcing the norms. |
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If a company makes a product other than liquor (or tobacco),
which has a turnover of Rs 1 crore (Rs 10 million), then the
firm is entitled to use the same brand for that product.” She announced
that a formal decision would be made after the sports ministry's
comments were received.
In the mean time, some liquor producers entered new segments
under the liquor brand or advertised these products under the liquor brand. Most
of liquor producers entered into the packaged water segment, such as Kingfisher
Mineral water. Some companies seemed to be using the ban to their advantage.
McDowell's mineral water and soda brands served as surrogates for their liquor
brand and also generated additional revenues for the company. To expand this
segment, the company franchised its bottling and sale of purified drinking water
and soda and made them available in more than 75 cities in the country.
In early 2001, SWC started marketing its range of golf accessories under the
liquor brand Royal Challenge. It also launched a new range of golf accessories,
including graphite shafted golf sets (with lifetime warranty), golf bags, caps,
and gloves. SWC also started a quarterly golf publication that which provided
information on the latest happenings on golf. The company also entered into
agreements with the Indian Golf Union and the International Management Group to
promote the game in India. It also announced that India's flagship Golfing Event
– the Indian Open – would be sponsored by the company till 2006.
In late 2001, SWC announced its decision to enter the packaged water market,
under its well-known beer brands Hi-Five and Lal Toofan. In 2002, it named it
soda water Royal Challenge Premium Sparkling Water[6]
to leverage the company's
flagship liquor brand Royal Challenge. According to industry watchers, SWC was
launching Sparkling Water to use it as a surrogate for its liquor brand. They
were of the view that, following the ban on advertising, liquor companies were
forced to look at innovative ways of building their brands.
More...
THE DEBATE
TABLE II AD SPENDS OF LEADING INDIAN LIQUOR COMPANIES
WHAT LIES AHEAD?
QUESTIONS FOR DISCUSSION:
EXHIBIT I SALES OF WINES, SPIRITS & LIQUOR COMPANIES
EXHIBIT II SALES OF BEER COMPANIES
EXHIBIT III CABLE TV ACT 1995: 2000 AMENDMENTS RELATED TO LIQUOR ADS
ADDITIONAL READINGS & REFERENCES:
[5] The IBF is a non-profit national organization of television
broadcasters, airtime sellers and other entities in the field of television
broadcasting, set up to promote the television industry. It has about 27
members including Sony, Zee, Star, Sahara, Discovery, MTV etc. In October
2001, the IBF also included radio companies as its members.
[6]
Sparkling water is a milder form of soda.
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