surrogate advertsing

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ICMR Center for Management Research

Banning Liquor Surrogate Advertising

This case was written by Sirisha, D under the direction of Mukund, A ICMR Center for

Management Research (ICMR). It was compiled from published sources, and is intended to be

used as a basis for class discussion rather than to illustrate either effective or ineffective

handling of a management situation.

2002, ICMR Center for Management Research

ICMR, Plot # 49, Nagarjuna Hills, Hyderabad 500 082, India

Email: [email protected].

www.icmrindia.org

2

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Banning Liquor Surrogate Advertising

“It's difficult to digest that an industry which is allowed to sell its products, is banned from

advertising the same products, despite the fact that the commercials carry health warning,

advising the customers to use the product in temperance.”

- Prof. Atul Tandan, Director, Mudra Institute of Communications, in July 2002.

BANNING LIQUOR ADVERTISEMENTS – AGAIN

In June 2002, the Information and Broadcasting (I&B) Ministry of India ordered leading television

(TV) broadcasters to ban the telecast of two surrogate ads1 of liquor brands, McDowell‟s No. 1 and

Gilbey‟s Green Label. The Ministry also put some other brands – Smirnoff Vodka, Hayward‟s

5000, Royal Challenge Whiskey and Kingfisher beer – on a „watch list.‟ The surrogates used by

these advertisements ranged from audiocassettes, CDs and perfumes to golf accessories and

mineral water.

By August 2002, the I&B Ministry had banned 12 advertisements. Leading satellite TV channels,

including Zee, Sony, STAR and Aaj Tak were issued show-cause notices asking them to explain

their reason for carrying surrogate liquor advertisements. The channels were asked to adhere

strictly to the Cable Television Regulation Act 1995 (Cable TV Act, 1995).2 As a result, Zee and

STAR stopped telecasting the advertisements; Aaj Tak and Sony soon followed suit. In addition,

the I&B Ministry hired a private monitoring agency to keep a watch on all advertisements for

violations of the Act.

These developments led to heated debates over the issue of surrogate advertising by liquor

companies. Though the liquor companies involved protested strongly against the I&B Ministry‟s

decision, they had no choice, but to comply with the regulations. Analysts remarked that the

government‟s policy was hypocritical. One said, “On the one hand they allow these „socially bad‟

products to be manufactured and sold (in order to garner revenues) and then they deny the

manufacturers the right to propagate knowledge of their products in order to drive sales. If

something is bad and cannot be advertised, why allow it to be sold at all?”

Meanwhile, the government also seemed to be in dilemma. On the one hand, it had to encourage

the sales of liquor and tobacco because they were the highest taxed sectors of the Indian economy.

On the other hand, there was also the need to take the high moral ground and reduce the

consumption of such products.

THE INDIAN LIQUOR INDUSTRY

The Indian liquor industry can be divided into two broad segments: Indian Made Foreign Liquor

(IMFL) and country-made liquor. IMFL comprises alcoholic beverages that were developed

abroad but are being made in India (whisky, rum, vodka, beer, gin and wine), while country-made

1 Advertising for other products like soda or mineral water using the brand names of liquor. 2 The Cable TV Act of 1995 outlines the various requirements that cable operators, cable networks and

programmers must adhere to.

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3

liquor comprises alcoholic beverages made by local breweries. While many players were present

in the IMFL segment, breweries in the unorganized sector accounted for almost 100% of the

country-made liquor segment.

During 1999-00, the Rs3 60 billion Indian liquor industry grew at the rate of 10-12%. While IMFL

was consumed by the middle and upper classes of society, country-made liquor was consumed by

the economically backward classes. In India, 40-50% of all males and 1% of all females consumed

alcohol. Almost 62% of the drinkers could be classified as light drinkers (i.e. social drinkers), 29%

percent as moderate drinkers, and about 9% as hard drinkers. The organized industry was

dominated by Shaw Wallace and United Breweries, which together accounted for around 53% of

the total market (Refer Table I, Exhibit I and Exhibit II).

Table I

Indian Liquor Industry – Player Profile

Company Leading Brands

United Breweries Kingfisher (Beer), McDowell‟s No. 1 and Bagpiper (Whiskey)

Shaw Wallace Hayward‟s, Antiquity, Royal Challenge, Director‟s Special

(Whiskey), White Mischief Vodka, Golconda, Hi-Five Beer, Lal

Toofan Beer

Jagatjit Industries Aristocrat Whiskey, Captain Henry, Bonnie Scot, Binnie‟s Fine

Radico Khaitan 8 PM Rare Blend Whiskey, Contessa XXX Rum, Whyte and

Mackay Scotch Whiskey, Contessa Premium Extra Dry Gin,

Contessa Deluxe Doctor‟s Brandy, Contessa Vodka

Source: ICMR

The liquor industry was heavily regulated by the government. Companies were not allowed to

expand capacity without prior approval from the concerned state government. The distribution of

liquor was also controlled in many states through auction system, the open-market system and the

government-controlled system. Under the auction system, the government fixed a floor price for

the shops and the bidders had to quote prices. The license was given to the highest bidder.

States following the open-market system gave companies freedom to choose their distributor and

to determine the price and the discounts. In the government-controlled system, liquor was

distributed by state agencies such as BEVCO (in Kerala) and the Andhra Pradesh Beverage

Corporation (in Andhra Pradesh). There were around 25,000-27,000 licensed retail sales outlets in

the country, in addition to the bars, pubs, hotels and restaurants serving liquor. There were

restrictions on the location of these outlets and their business hours.

Liquor producers spent heavily on advertising on the electronic media because of the reach of

satellite and cable TV. Though the broadcasters were bound by a 30-year old advertising code

which banned them from airing advertisements that related to or promoted cigarettes and tobacco

products, liquor, wines and other intoxicants, the telecast of such advertisements continued

blatantly over the years. This was because the code was only a code of conduct, not a legally

enforcing code. Doordarshan, the state-owned TV channel, was the only one that adhered to it.

The broadcasters were also bound by the Cable TV Act, 1995. However, as most of the channels

were uplinked from outside India, the Act did not apply to them. Moreover, satellite channels did

not want to follow this code because they garnered about 50% of their advertisement revenues

from liquor. In the peak seasons for the sale of liquor, this revenue almost doubled. In the first half

of 1998, STAR reported revenues of Rs 127.9 million from liquor advertisements while Zee

3 In November 2002, Rs 48 equalled 1 US $.

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4

reported revenues of Rs 40 million4. The regional channels managed to get about Rs 0.70 million

in revenues. Since liquor ads generated such high revenues, Doordarshan also planned to air such

ads in 2000. With a reach of 70 million homes, it expected to acquire a significant share of liquor

advertisement revenues. Doordarshan estimated that its revenues would increase three times from

cricket matches alone if it were permitted to air liquor advertisements.

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

4 Zee could air liquor ads only after 9.30 pm as it was aired in the Middle East also. 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.

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5

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 Water6 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.

The number and range of surrogate advertisements increased as liquor producers started

sponsoring movies, music shows, and other programs attracting youth. For instance, Seagram‟s

Royal Stag was promoted by sponsoring movie-related activities and Indian pop music under the

banners Royal Stag Mega Movies and Royal Stag Mega Music. It promoted its 100 Pipers brand

by sponsoring a series of performances by fusion music artists under the name 100 Pipers Pure

Music. Blenders‟ Pride sponsored a series of performances by troop dancers and artists under the

banner of Blenders‟ Pride Magical Nites. Seagram also sponsored events such as the Chivas Regal

Polo Championships and the Chivas Regal Invitational Golf Challenge for corporates.

In late 2001, television broadcasters began airing socially responsible advertisements sponsored by

liquor companies, even though the government had not issued any notification permitting the

airing of socially responsible ads on TV. Star TV and Sony were among the leading broadcasters

telecasting such advertisements included STAR TV and Sony. The advertisements were telecast

during Christmas and New Year‟s Eve. One of these ads by Seagram wished the viewers with

„Season‟s Greetings.‟ Another advertisement of Seagram read, “Tonight, when it‟s one for the

road, it‟s got to be coffee.” L.S.Nayak, Vice President (Sales and Marketing), STAR TV said, “It‟s

not a liquor advertisement at all. It‟s just another corporate advertisement through a social

message. It cannot be classified as a liquor advertisement because Seagram is not a liquor brand.

One must see the spirit behind an advertisement to find out whether it‟s promoting liquor or not.”

Some of the broadcasters said that because the I&B Ministry was taking a long time deciding

about the use of socially responsible advertisements by liquor companies, they had started using

them without the Ministry‟s consent. IBF‟s Executive Director, Bhuvan Lal, reportedly argued that

there was nothing wrong with airing such advertisements because they did not violate the

government‟s guidelines restricting the telecast of direct/indirect liquor ads. The government‟s

6 Sparkling water is a milder form of soda.

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guidelines stated that „advertisements which lead to sale, consumption and promotion of liquor

should not be allowed.‟ According to Bhuvan Lal, these advertisements were perfectly legal as

they did not lead to sale, consumption and promotion of liquor.

Soon, liquor companies that had not entered into any agreements with satellite channels for

airing socially responsible and surrogate advertisements started processing such agreements.

For instance, Whyte & Mackay began negotiating agreements with various TV channels,

including Star TV. Amar Sinha, CEO, Whyte & Mackay, said, “As long as there was no ban,

companies were not interested in showing liquor advertisements in the garb of social

messages. But with the government imposing restrictions, social messages are a route to liquor

advertising for many.”

By early 2002, there were many surrogate advertisements of liquor brands on satellite TV

channels. These advertisements attracted a lot of criticism. According to an analyst,7 “We see a

brown liquid poured into a glass under a well-known brand name, and we are told the man is

drinking apple juice! The girl who is avidly watching him immediately rewards him with a kiss. In

the same sort of way, water, soda and other harmless liquors stand in for hard liquor and beat the

ban.” (Refer Exhibit IV and V for sample surrogate advertisements). There were numerous other

advertisements selling music cassettes, CDs, water, clothing, fashion accessories and sports goods

– many of them accused of being sexually provocative and offensive.

The I&B Ministry‟s decision to ban such advertisements was thus viewed as a logical and

necessary step by their critics. As the authorities were finding it difficult to track down the

increasing number of violations, especially at the regional level, the Ministry hired a private

monitoring agency. The agency – Time Monitoring (Delhi-based) – was responsible for scanning

all advertisements on all private satellite channels including regional channels. At the same time,

the Confederation of Indian Alcoholic Beverage Companies (CIABC), in a self-disciplinary move,

asked all TV channels to stop telecasting surrogate liquor advertisements.

THE DEBATE

The banning of surrogate advertisements for liquor brands became a very controversial and

sensitive issue. Liquor producers felt that while the government allowed them to do business, it did

not allow them to do so in a profitable manner. Liquor companies argued that the ban would

severely affect the sales. They said that TV was the most effective medium of advertising for these

products and thus the restriction would hamper brand building.

However, some analysts were of the opinion that the ban could turn out to be advantageous for

domestic players. According to a WTO agreement signed in March 2001, MNCs had unrestricted

license to sell their products. After the ban, these MNCs would not have access to the quickest and

most effective form of advertising – the TV. Thus MNCs who had recently entered the Indian

industry were expected to face difficulties in building their brands. The ban would also affect the

entry decisions of MNCs that were planning to enter the Indian liquor industry.

Moreover, some analysts argued that the ban would not affect the established domestic players

severely. It would only affect new launches and new brand building activities of these companies.

Players who already had very strong brands (E.g. McDowell No. 1, KingFisher, Hayward‟s and

Royal Challenge) would not be affected by the ban. Apart from reducing foreign competition, the

ban was also expected to improve margins for these players, as these companies had already spent

heavily on advertising and other promotional activities. (Refer Table II).

7 Amita Mallik, www.tribuneindia.com

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Table II

AD Spends of Leading Indian Liquor Companies

Company Year

Ending

Ad expenses

(in Rs million)

As % age

of Sales

McDowell 03/00 1,089.0 13%

United Breweries 03/00 737.0 28%

Shaw Wallace 06/99 565.0 7%

Radico Khaitan 12/99 78.1 8%

Jagatjit Industries 03/99 523.0 13%

Source: www.indiainfoline.com

On an average, liquor companies spent about 10-12% of sales revenue on advertising, including direct consumer promotions programs; sponsorships; and print and electronic media advertisements. On TV alone, companies reportedly spent about 3-4% of sales revenue. This meant that after the ban, companies could save 3-4% sales or gain in margins. For instance, McDowell‟s operating margins ranged between 5-7% and after the ban, were expected to increase by 50%. The smaller companies in the domestic market also seemed to have an advantage. Industry watchers felt that since distribution and reach would become more vital after the ban, smaller companies might be acquired by the larger ones for their distribution network, if not for their brands.

The restrictions on the liquor industry were viewed by many critics as attempts by the government to disassociate itself from the social evils associated with alcohol consumption. However, some critics observed that while the government imposed many restrictions on the liquor company; it also earned a significant portion of its revenues (Rs 200 billion in 2000 for the whole country) through levies on liquor sales.

The issue of surrogate advertising involved even media companies, as they had to forego substantial revenues as a result of the ban. According to broadcasters, the government should put in place a „reasonable‟ policy, which somehow struck a balance between the social and monetary aspects of the business of alcohol.

WHAT LIES AHEAD?

In August 2002, broadcasting industry sources revealed plans to put in place measures for self-regulation and monitoring, even before the I&B Ministry took concrete steps in this regard. The broadcasters who were members of the IBF, announced that they would come up with an advertising code specific to surrogate advertising. IBF set up a sub-committee that included among others, with L. S. Nayak (Executive Vice President, Star TV), G Krishnan (CEO, TV Today) and Manu Sawhaney (MD, ESPN-Star Sports). Apart from formulating the advertising code, the committee would monitor the advertisements that appeared on the TV channels. Bhuvan Lal said, “We would like to clear any such advertisement with the committee and nip any offending advertisements at the drawing table.”

Around the same time, apart from the 12 ads banned earlier, the I&B Ministry was in the process of issuing show-cause notices to AXN and Zee for two advertisements promoting Aristocrat Apple Juice and Whytehall. The controversy surrounding surrogate advertising was undoubtedly the result of the government‟s and liquor industry‟s age-old tussle of revenues versus morality. Ashoke Bijapurkar, President, B-MRP Communications8 said, “This brings us to the question being debated: should surrogate advertisements be banned? I feel the real question to be asked is: should liquor and tobacco advertising be banned?”

8 BRP is a high-end public relations company with expertise in reputation and perception management.

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Following the ban, most liquor companies again explored alternative promotional activities.

Industry watchers remarked that the ban would affect the channels more than the liquor companies

themselves. The companies might actively resort to sponsorships of sports events, dance and music

programs, and other fun-filled activities. Some of the major domestic companies were considering

the use of the Internet as an effective marketing medium.

QUESTIONS FOR DISCUSSION:

1. „By banning advertisements for liquor, the government is trying to disassociate itself from the

social evils associated with alcohol consumption.‟ Critically comment on this statement in

light of the ban on direct and surrogate advertisements for liquor.

2. Do you think surrogate advertisements by liquor companies were banned because of the

criticism they received? Give reasons to support your answer. Also, discuss the advantages and

disadvantages of using surrogate advertisements (for a liquor company in particular and also

for any other type of company).

3. As a part of a team responsible for the marketing of a leading liquor brand, what measures

would you suggest to overcome the limitations imposed due to the ban on surrogate

advertising? Does the use of „socially responsible‟ advertisements go against the interests of a

liquor company? Analyze.

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Exhibit I

Sales of Wines, Spirits and Liquor Companies

(in Rs million)

Company 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

McDowell & Co. - - - - - 7766.1

Balaji Distilleries 3383.3 3658.0 4248.7 5273.0 5491.0 5419.4

Shaw Wallace & Co. 4101.0 4020.1 3493.1 4320.9 4989.1 5059.1

Mohan Breweries & Distilleries 1474.0 1714.1 2489.1 2596.6 3089.2 3800.5

Balaji Industrial Corpn. - - 3050.6 3451.8 3773.4 3691.8

Pearl Distillery - - 555.9 1744.3 2323.1 2323.1

Herbertsons 1770.3 1323.0 1490.8 1867.3 2013.4 2066.1

South India Corpn. (Agencies) - - - 1291.6 1549.5 1894.3

Maharashtra Distilleries 1636.9 1445.5 2050.3 1822.3 1681.9 1680.9

Mohan Meakin 1037.7 1112.1 1399.9 1472.6 1465.0 1446.6

Chandigarh Distillers & Bottlers - - - 1224.9 1139.3 1396.8

Seagram Manufacturing - - - 1077.4 1077.4 1374.2

G M Breweries 1036.8 999.1 999.1 994.8 1037.7 1280.2

Radico Khaitan 498.3 489.8 709.7 828.6 1186.5 1240.2

Khoday India 1104.3 866.2 876.8 1053.3 1108.1 1165.8

Rajasthan State G. Sugar Mills 677.7 549.4 549.4 - 1255.2 1082.7

Central Distillery & Breweries 25.5 195.7 549.6 1225.2 1144.3 1038.9

BDA 713.1 - 1084.0 971.0 990.6 990.6

U D V India - 676.0 565.5 565.5 745.1 823.0

I F B Agro Inds. 603.3 707.9 719.1 834.2 782.7 781.9

Source: CMIE

Marketshares of Wines, Spirits & Liquor Companies

(in %)

Company 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

McDowell & Co. - - - - - 12.05

Balaji Distilleries 9.65 11.10 9.16 8.52 8.09 8.41

Shaw Wallace & Co. 11.70 12.20 7.53 6.98 7.35 7.85


Balaji Industrial Corpn. - - 6.58 5.58 5.56 5.73

Pearl Distillery - - 1.20 2.82 3.42 3.60

Herbertsons 5.05 4.01 3.21 3.02 2.97 3.21

South India Corpn. (Agencies) - - - 2.09 2.28 2.94

Maharashtra Distilleries 4.67 4.39 4.42 2.94 2.48 2.61

Mohan Meakin 2.96 3.38 3.02 2.38 2.16 2.24

Source: CMIE

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Exhibit II

Sales of Beer Companies

(in Rs million)

Company 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

United Breweries 1761.6 1833.4 3035.9 2840.3 2632.2 4315.8


Balaji Hotels & Enterprises - 342.1 690.2 588.9 331.5 708.9

Mohan Meakin 406.8 426.8 421.3 568.0 551.5 674.0

Skol Breweries 433.9 501.2 699.5 753.4 669.5 598.5

Mysore Breweries 394.3 393.1 408.4 561.2 532.1 532.1

Lilasons Industries - - - - 501.4 493.9

Charminar Breweries (Erst.) 9.0 189.4 395.5 423.8 454.1

Foster‟s India - - 1.6 1.6 345.8 432.7

Mount Shivalik Breweries 294.1 293.2 293.2 387.8 405.9 388.1

Aurangabad Breweries 223.3 327.7 387.5 364.0 364.0

Mount Shivalik Inds. 65.0 65.0 225.1 328.5 276.0 355.6

Artos Breweries - - - 276.5 219.5 352.1

Sica Breweries (Erst) 169.4 253.9 304.8 312.1 332.9 332.9

Central Distillery & Breweries 52.7 105.1 141.5 - 254.0 314.2

Shaw Wallace & Co. - - - 69.5 292.5 288.1

Som Distilleries & Breweries 123.5 169.6 244.1 274.1 282.4 282.4

Mohan Rocky Springwater Breweries 191.0 191.0 - 190.0 123.6 250.3

East Coast Breweries & Distilleries - 91.0 124.2 210.4 146.1 247.7

Hindustan Breweries & Distilleries 326.0 289.5 380.8 343.3 232.2 241.8

Source: CMIE

Marketshares of Beer Companies

(in %)

Company 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

United Breweries 25.38 24.21 32.16 23.92 21.35 28.84


Balaji Hotels & Enterprises 4.52 7.31 4.96 2.69 4.74

Mohan Meakin 5.86 5.64 4.46 4.78 4.47 4.50

Skol Breweries 6.25 6.62 7.41 6.34 5.43 4.00

Mysore Breweries 5.68 5.19 5.09 4.73 4.32 3.56

Lilasons Industries 4.07 3.30

Charminar Breweries (Erst.) 0.13 2.01 3.33 3.44 3.03

Foster‟S India 0.02 0.01 2.81 2.89

Mount Shivalik Breweries 4.24 3.87 3.11 3.27 3.29 2.59

Source: CMIE

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Exhibit III

Cable TV Act 1995: 2000 Amendments Related to Liquor Ads

The Cable TV Networks (Regulation) Amendment Bill 2000 came into effect on 8th September

2000. The Union Minister of Information & Broadcasting, Mr. Arun Jaitley, made this

announcement.

Liquor and Tobacco Ads:

Liquor & Tobacco advertisements are now banned on all channels transmitted or retransmitted

in India. Earlier, only channels uplinked from India had to adhere to this code. As a result,

Doordarshan and a handful of other channels that uplinked from India through VSNL were

prohibited from accepting Liquor & Tobacco ads. Earlier, these constraints did not apply to

leading channels such as Zee TV, Sony TV and STAR because they uplinked from outside the

country, even though their primary target audience was in India. Some of these channels

received up to 30% of their ad revenues from Liquor & Tobacco advertisements. The

government now seeks to provide a level playing field for all channels, including Doordarshan.

Surrogate Advertisements:

In the past, liquor advertisers have often resorted to surrogate advertisements where the brand

name of a product normally associated with Liquor is advertised as another product e.g.

Kingfisher Mineral Water or a soda that is named after a whisky. Surrogate advertisements can

also indirectly advertise or promote a product without actually displaying the product. The I&B

ministry has taken a serious view of this and the new amendment prohibits all advertising that

„directly or indirectly‟ promotes the production, sale or consumption of tobacco, cigarettes and

alcohol.

Source: www.scatmag.com

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Exhibit IV

Surrogate Television Advertisements - I

(Apple Juice Using the Aristocrat Brand)

A young man gets a much-awaited

call in his office. Whatever the caller

had to say, gives him a reason

to celebrate.

At the party thrown in the honor

of his success that night, he spots

his attractive colleague in the

crowd. Sipping his drink...

...he strolls towards her. Their eyes

lock and they inch closer. This is followed by

the line....

...Whatever the occasion. Always

ACP (Aristocrat Premium

Apple Juice.)

Source: www.agencyfaqs.com

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Exhibit V

Surrogate Television Advertisements – II

(Mineral Water Using the Green Label Brand)

Shot of engineers

busy at a new railway

site.

An anxious villager

asks, „The train won‟t

reach our village?‟

Looking at the terrain

the chief reluctantly

says it‟s not possible.

A young engineer is

optimistic that the

tracks can be laid by

drilling...

...through a cave.

This is followed by

the brand‟s jingle in

Hindi. His idea gets

approved and

applauded as...

...it works the way he

planned. The jingle

continues as the men

take a break from

their hard work.

Finally the much

awaited train

arrives at the village.

The proud chief

asks his youngman,

„What‟s the program

for the evening?‟

He is pleased to say,

„My label is Green

label.‟ The

advertisement then

states, „New Gilbey‟s

Green Label. Rich

and smooth.‟

The villagers carry

their hero on their

shoulders and dance

in joy. The jingle

continues.

Source: www.agencyfaqs.com

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Additional Readings & References:

1. Anuradha Raman, DD's Still High On Liquor Ad Revenue, Indian Express, September 30, 2000.

2. Ban on Liquor Ads: Boon or Doom?, www.indiainfoline.com, October 6, 2000.

3. Nivedita Mookerji, TV Channels Feel the Pinch of Loss of Liquor Ad Revenues,

Financial Express, December 27, 2000.

4. Mookerji Nivedita, Liquor Companies Resort to ‘Socially-Responsible’ Ads, Financial

Express, January 6, 2001.

5. Raman Anuradha, I&B Sleuths are Monitoring Surrogate Ads for Objectionable

Matter, Indian Express, January 7, 2001.

6. Raksha Hegde & Reeba Zachariah, Controlled Liquor Ads Could Hit Channels,

Companies, www.rediff.com, May 2001.

7. Bhaskaran K Kavita, Liquor Majors Rework Marketing, Brand Promotion Strategies,

www.expressindia.com, October 5, 2001.

8. Mookerji Nivedita and Gombar Vandana, Surrogate Ad Game: The Ball Is Now In Sports

Ministry’s Court, Financial Express, October 25, 2001.

9. Govt Tames Advertising’s Crude Dudes, Financial Express, June 20, 2002.

10. Clamp-down on Surrogate Ads Likely, Economic Times, July 4, 2002.

11. Should Surrogate Advertisements Be Banned?, Economic Times, July 23, 2002.

12. Kaushik Neha and Subramanian Nithya, Liquor Cos Ask Channels to Take Off Surrogate

Ads, The Hindu Business Line, August 9, 2002.

13. Govt Puts the Lid on Surrogate Ads, Economic Times, August 10, 2002.

14. Dey Sudipto, Surrogate Ads: Broadcasters for Self Regulation, Economic Times,

August 13, 2002.

15. www.scatmag.com

surrogate advertsing

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