Banning Liquor Surrogate Advertising

About Surrogate Brands Contd...

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.' 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. 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.

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Case Details

Case Code : MKTG024
Themes: Advertising and Promotion
Case Length : 13 Pages
Period : 1999-2002
Organization : Archies Greetings
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Advertising

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