Historical Background:
In the middle of the 1990s, substitute advertising, also known as surrogate advertising, became prevalent in India as a result of the Cable Television Networks (Regulation) Act of 1995 and the Cable television Rules of 1994, both of which barred direct commercials for alcoholic beverages, tobacco products, and cigarettes[1]. Prior to that, the Cigarettes (Regulation of Production, Supply, and Distribution) Act of 1975 required health warnings to be printed on all packages and advertisements[2]. Especially in this age of advanced technology, advertising has a substantial effect on the thoughts of consumers. Further Section 5 of Cigarettes and Other Tobacco Products Act, 2003 clearly forbids the advertisement of tobacco products through both direct or indirect means[3]. The government took a positive move by forbidding direct advertisements for alcoholic beverages and tobacco products in an effort to decrease the influence of such advertisements on the public and successfully mitigate the harmful effects of these products in general. Therefore, the essential purpose of this prohibition is defeated by the usage of surrogate advertisements by the alcohol and cigarette industries.
According to Section 6 of the code enacted by the Advertising Standards Council of India (ASCII), advertisements for products that are prohibited or subject to restrictions may not be reworded to make them appear to be advertisements for legal or permitted products. When attempting to determine whether or not a certain advertisement constitutes indirect advertising for a restricted or prohibited product, it is important to take into consideration the following factors: In the event that a product is being advertised, the visual content must only portray that product, and in no other way, shape, or form may anything else be included. In the advertisement, there should not be any references, direct or indirect, to any products that are restricted or prohibited. “Prohibited products” cannot appear in the advertisement in any way, shape, or form. It is in this part that the criteria for determining whether an advertisement is an indirect advertisement or not are laid out.
Recent Developments:
The Department of Consumer Affairs has recently, on the 10th of June 2022, notified the guidelines for the “Prevention of Misleading Advertisement and Endorsements for Misleading Advertisements, 2022”[4]. These guidelines include provisions for the regulation of misleading advertising, including bait advertisements, advertisements promising free benefits, advertisements directed toward children, and so on. In addition, the advertising of surrogates is strictly prohibited by the new guidelines. “Any advertisement that (a) indicates or suggests to consumers that they are advertisements for the goods, product, or service prohibited or restricted by law; (b) uses any brand name, logo, color, or layout and presentation associated with those goods, product, or services whose advertising is prohibited or restricted will be regarded as a surrogate advertisement or an indirect advertisement”, as stated in Paragraph 6 of the aforementioned guidelines. This provision states that any such advertisement will be regarded as a surrogate advertisement or an indirect advertisement.
To make this point abundantly clear, this does not imply that the use of a brand name or company name that can also be applied to goods, products, and services that are prohibited or restricted from being advertised is considered to be surrogate advertising or indirect advertising if such advertising is not alternatively inappropriate according to these guidelines. The guidelines also include the specifics of any applicable sanctions. The consumer protection regulator has the authority to levy a fine of up to ten lakhs on advertisers who knowingly deceive their target audience. For each additional violation, the CCPA has the authority to levy a fine of up to Rs. 50,000,000.
It is important to highlight that the rules that have been issued by ASCII will also be in effect in a parallel manner with the new standards. As a result, both sets of guidelines will limit the growing misuse of advertisements through the use of surrogate advertisements.
Legal loopholes through Brand Extensions:
The question that needs to be answered is how brands and companies can still be promoting advertisements that seem to target the restricted products that are being advertised even though there are so many guidelines in place and surrogate advertising is completely prohibited. Because of their effectiveness in building a brand image, alcoholic and cigarette marketing are driving up the price of the items they advertise. Obviously, the government is against it. As a result, these items were prohibited from being advertised in any way. In addition to the above-mentioned considerations, this prohibition is warranted because of the “forced demand” impact of ads. The government wants to limit the emergence of these items as a brand by prohibiting their advertising. By reducing the prestige associated with a particular brand of booze or tobacco, it is attempting to prevent the artificial induction of use and demand. Surrogate advertising, on the other hand, undermines the fundamental objective of government policy. Surrogate advertising does the exact opposite of what the government intends to do. A brand that the government would want to see die is given a new lease of life by them. Not only that, but the brand’s reputation improves as a result of surrogate advertising.
As a result, the brand’s vigor and energy are maintained, which in turn encourages consumers who may otherwise avoid purchasing them to do so. As a result of surrogate advertising, customers who may otherwise be ignored are enticed to act. The term “dormant” refers to those people who would never buy alcohol or cigarettes unless they were tempted by eye-catching ads. Specifically, the government aims to dissuade this group of people from abusing alcohol and cigarettes. Ads for the same group are also used in an attempt to re-enter their fan base.
To protect the public’s health, morals, and general well-being, the government has every right to control the sale of alcoholic beverages inside its borders. If a certain brand of liquor has been carefully tested and tried in other States and proven to be acceptable there, one way to determine whether or not its quality is “good” is to use this method[5].
Ads for alcoholic beverages and tobacco products are, of course, responsible for any harm done to that group by their consumption. Advertisement has an impact on the consumption patterns of 431 million Indians and 275 million “aspirants” from the lower income bracket, according to a market survey conducted in 2001[6]. It is safe to say that in a country where the per capita consumption of alcoholic beverages ranks fourth in the world and where almost half of all televisions are connected to cable, the subliminal messages urging binge drinking are not going unnoticed by those who watch. Because of this, the prohibition on alcoholic ads is essentially defeated. Several sociological studies demonstrate that in India, a major portion of a big population’s income is spent on liquor, which can lead to financial hardship and health risks for those who consume it. The number of individuals who reach the legal drinking age of 25 is expected to rise in the coming years, according to a report from the International Wine and Spirit Board[7]. An increasing number of people will be affected. The brands and companies are taking advantage of the legal loopholes to promote their commercials by engaging in a variety of other activities in order to draw attention in a short amount of time[8]. The following is a list of the various forms that businesses and brands are using:
- Promotion through Acquaintances –
- Promotion by Extension
- The use of events and sponsorships to spread the word
- TV commercials are a popular method of advertising
- Use of Public Service Announcements (PSAs)
The way forward:
The recent guidelines exclude brand extension from the prohibition. Advertisements for brand extensions can only be permitted if they are developed and delivered in sufficient quantities, taking into account the volume of advertising in question, the media employed, and the targeted markets. The Government of India enacted ASCII’s criteria for the qualification of brand extension products on 22 March 2021[9]. In the absence of its own criteria, the CCPA will presumably utilize the ASCII code to establish what constitutes a “reasonable amount” for the industry. If this occurs, the current ‘genuineness’ standards of the ASCI Code would be expanded for the assessment of “misleading advertisement” under the Consumer Protection Act of 2019, making it considerably more difficult for corporations to use brand extension to indirectly promote prohibited advertisements[10]. Moreover, if the provided standards for brand extension are not met, it will not be regarded as a genuine brand extension, but as a surrogate advertisement. Surrogate advertising should be combated by taking the following steps:
Surrogate marketing for various products under a single brand name should be prohibited by clear and transparent restrictions. Advocating against surrogate marketing by organizing consumer awareness programmes. Acquiring strong powers for the Advertising Standards Council of India to take action against false or deceptive advertisements, as well as to monitor legal avoidance, instead of issuing notices. Adoption of rigorous legislation penalizing corporations that engage in surrogate advertising, as well as the establishment of a framework to assure efficient implementation of international and national norms. It’s time for media and entertainment companies to stop allowing alcohol and tobacco companies to sponsor their events. Neither producers nor exhibitors are allowed to conduct anti-tobacco or alcohol commercials unless they are independently financed or supported by the companies who make the items in question in question.
[1] The Cable Television Networks (Regulation) Act, 1995, § No. 7, Act of Parliament, 1995 (India)
[2] The Cigarettes (Regulation of Production, Supply, and Distribution) Act, 1975, § No. 49, Act of Parliament (India)
[3] The Cigarettes And Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, § 5, No. 34, Act of Parliament, 2003 (India)
[4] Department of Consumer Affairs, Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022,” (Issued on June 10, 2022)
[5] 2020 SCC OnLine Del 1354
[6] Pradeep S Mehta and Nitya Nanda, Surrogate Advertising – Needed, a spirited attack, Pradeepsmehta.com, (May 23, 2003), https://pradeepsmehta.com/surrogate-advertising-needed-a-spirited-attack
[7] National Research Council, National Research Council (US) and Institute of Medicine (US) Panel to Review the National Children’s Study Research Plan. The National Children’s Study Research Plan: a review 2008.
[8] 2008 SCC OnLine CESTAT 3472
[9] Ministry of Information and Broadcasting, I.C. 2(Notified on March 24, 2021).
[10] Ugar Sugar Works Ltd. v. Delhi Administration)12, (1979) 2 SCC 196
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