Banning Liquor Surrogate Advertising



Themes : Advertising and Promotion
Period : 1999-2002
Organization : Archies Greetings
Pub Date : 2002
Countries : India
Industry : Advertising

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Case Code : MKTG024
Case Length : 13 Pages
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Banning Liquor Surrogate Advertising | Case Study

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The Indian Liquor Industry Contd...

Even as Doordarshan was considering the above option, the I&B Ministry barred TV channels from telecasting liquor and cigarette advertisements in September 2000. With pressure increasing from public interest groups to ban liquor advertisements, the government had to make amendments to the Cable TV Act 1995 (Refer Exhibit III). While the Indian government could not take action on most of the channels for violating the codes, as they did not uplink from India, the cable operators were punishable under Indian law. The I&B Ministry also took steps to monitor the advertisements broadcast by these companies.

Due to the ban, liquor companies focused more on promotions for brand building. They started sponsoring events that projected the 'glamour' of the brands, like track racing, car rallies etc. for instance Shaw Wallace Co. (SWC), one of the leading liquor companies in India, conducted the Royal Challenge Invitation Golf tournament, which became an annual event.

Some companies also promoted their products through corporate advertising, distributing free gifts like caps and T-shirts with the brand name and using glow-signs outside the retail outlets. However, as the TV was the most effective medium of advertising, surrogate advertising on TV became more popular.

About Surrogate Brands

Even 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.'

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.

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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.