India plans tougher liquor ad rules, fine on celebrity endorsements-sponsorships

India, which bans direct advertising of liquor, is set to announce sweeping rules that will bar even surrogate ads and sponsoring of events, which could force firms such as Carlsberg, Pernod Ricard, and Diageo to redraw marketing campaigns.

Such “surrogate ads” often get around the ban by ostensibly showing less desirable items instead, such as water, music CDs or glassware garbed in logos and hues linked to their key product, and often promoted by popular Bollywood film stars.

Now they could bring fines for companies and bans for celebrities endorsing tobacco and liquor ads deemed misleading, according to the top civil servant for consumer affairs and draft rules being reported for the first time by a news agency.

“You can’t take a circuitous way to promote products,” the official said, adding that final rules were expected to be issued within a month. “If we find ads to be surrogate and misleading, then even those who are endorsing (products), including celebrities, will be held responsible.”

The new rules call for “prohibition against engaging in the surrogate advertisement”, which extends to sponsorships and ads for products viewed as “brand extensions” that share the characteristics of an alcohol brand, the draft said.

Penalties under the new rules rely on consumer law, opening manufacturers and endorsers to fines of up to 5 million rupees ($60,000), while promoters risk endorsement bans running from one to three years.

The new draft rules prohibit the marketing of items such as soda or music CDs employing a “similar label, design, pattern, logo” to that of alcohol products, explicitly targeting efforts to get around current bans.

The new rules follow warnings to some liquor companies, such as Pernod, and some domestic tobacco firms to halt misleading ads, a senior government source said, speaking on condition of anonymity. India is not against brand extension ads, the official added, but wants them to properly depict the product being showcased, rather than giving consumers the impression that the ad is for a liquor brand.