The conundrum of liquor brands on digital advertising

A bunch of liquor brands, which had extensively advertised during the Indian Premier League (IPL) last year, were recently restricted from promotional activities on the digital space.

The digital space allows liquor brands to express themselves with fewer regulations as compared to television.

The Advertising Standards Council (ASCI) last year had investigated a bunch of complaints against eight such brands during the IPL and had taken suo moto cognizance against 14 such brands. Out of the 14, two brands agreed to withdraw their ads and 12 brands have been restricted from advertising on the platforms.

We ask experts how companies can navigate advertising through strict regulations. 

Anupam Bokey

According to Anupam Bokey, CMO, Allied Blenders and Distillers, most good companies are very sensitive towards following laws and regulations.  “I don’t think any misinformation is getting passed on, and you normally do not see communication provoking you to consume more. Most big companies that are communicating are doing it responsibly. In many places, responsible consumption is highlighted. I think they have been very careful and are aware of their messaging.”

Bokey said the Advertising Standards Council of India (ASCI) has laid down certain rules for surrogate advertising or for using a product category to communicate the virtues of your brand. A brand needs to have a turnover of more than a crore in one state or national turnover of over five crore. “These are very clear guidelines and for ABD, whether it’s Officer’s Choice or Sterling Reserve, we do much more than the required threshold in terms of sales. We usually use packaged drinking water, which is a very natural extension of the brand.”

“All brands must follow this rigorously. However, we also have brands that talk about fashion and music CDs. I’m not very sure whether they have the requisite sales mandated by ASCI. If you’re not able to adhere to the laid-down rules or self-regulation, it certainly should be strictly imposed. Some brands are making efforts and thinking about category extensions that meet the required numbers. There should be a level playing field so that someone who does not have all this evidence is not allowed to advertise. It’s okay to be strict about it. Yes, there are limitations of surrogate advertising but at the same time, if some rules are laid down, they should be adhered to. If you use surrogate just to get around the rules, then it is not right,” Bokey said.

Ramesh Narayan

According to Ramesh Narayan, Founder of Canco Advertising, brands must not try to circumvent the law as it harms its reputation. “Rules and regulations in India are very clear. Liquor advertising was banned back in 1988 and despite that, brands have been trying to get their ads somehow. On many digital platforms, they are openly advertising because it is allowed. They should use that to the full extent. But I have always said that if it is not allowed by the law, it speaks poorly of the brand to try and circumvent the law,” he said.

Narayan said while he understands the industry’s point of view, the companies must also understand that they are consumer-first and advertisers-second. He said that even in the absence of advertising, alcohol sales have never gone down.

“My only appeal to these manufacturers is that in the long run, they have to realise that they are consumer-first and advertisers only after that. If you begin to look at things from the point of view of the consumer, then you don’t need to debate about such things. India is still very liberal. In Europe, they are already talking about plain paper packaging for cigarettes, which means you will get cigarettes without the name of the brand. India is still liberal and EU countries are a lot more health-conscious. While I respect the fact that they are selling a legal product, my appeal to all the advertisers is that they understand why the laws were instituted in the first place,” Narayan said.

Advertising veteran Ajay Gahlaut said the discussions around surrogate advertising of alcohol end up only being peripheral discussions for the consumer. He said such things don’t affect the sales or the image of a brand.

“The more number of times these things come under the scanner, the more difficult it gets for them to promote their brands. At the end of the day, it is a hugely profitable source of excise even for the states and the government.”

“Brands have been doing it (advertising) within the framework. They have their brands to build and they have to use whatever is legally available to them. They have been doing it so far and they have been doing it cleverly and extremely well. The brands I have worked with for so many years have been able to build very strong brands, which has allowed them to charge a premium for their product,” he added.

What challenges are advertisers facing?

According to Bokey, while it is important to advertise under the framework of the law, brands are also in a position to invest in marketing and establish their proposition.

“Alcohol is one of the biggest contributors to state revenue in terms of excise duty collection. During the pandemic, a lot of states imposed additional excise duty because industrial activity was slow. This made alcohol very expensive in many states, and consumers were not in a situation to purchase, especially with the economic downturn. They were not in a position to afford the higher prices. We have seen a lot of down-grading happening to cheaper liquor or alternatives, which can even pose a health hazard to consumers because they are not finely crafted. The large established brands, though, are very clear about their quality standards. In such a situation, it becomes a pricing and value game. While it is okay to raise prices, the states also need to see that the brands are in a position to invest reasonable marketing monies and establish their proposition and functionality,” Bokey said.

Speaking about the challenges that surrogate advertising faces, Bokey said one can communicate the emotional proposition of the brand but you cannot communicate its functionality or superiority. “The consumer is not very informed about the differences between good quality alcohol and cheaper alcohol. This certainly poses a challenge to established brands and good meaning brands such as ABD,” he said.

Can brands invest more in point-of-view marketing?

In an earlier conversation with BestMediaInfo.com, Manisha Kapoor, General Secretary, ASCI, had said tighter guidelines can be expected soon for the digital space.

Asked where brands can invest in such a situation, Bokey said, “It is important for the consumer to be informed before making the choice. Leave aside alcohol, for any brand or any category, you should be fair in communicating what your product stands for and the distinctive features of your brand. If you are not able to communicate all this, the consumer is also missing out and they might make the wrong choice. I feel these rules are there for a reason. Yes, there are limitations for TV advertising but digital is at least an avenue where the consumer can be well-briefed about the product. Certainly, it is an avenue from a brand’s perspective to communicate.”

“TV certainly gives you good visibility but it has limitations and restrictions like you cannot talk about the product. Digital comes in handy by allowing that but for anything you want to engage on digital, most good companies will have an age filter so that it is reeved by only those media vehicles where these filters can be used. I don’t think there is anything wrong with that. When states expect higher revenue in terms of duty collection, then the brands should also get permission to communicate rightfully. If you don’t do that, then I think it does not create a level playing field and brands that have been built by creating superior quality blends will certainly get short-changed in the process.”

Narayan said, “I have always said human ingenuity always finds a way around almost everything. Even the most watertight and airtight compartment can be penetrated, so we will always find a way around it. I feel that as of now, they are always allowed to showcase their products in restaurants and bars. There is minimum wastage over there because your entire audiences are present there. They can step up in all those places in which it is still allowed. I don’t think they should be looking at ways to surrogate or circumvent the law as I believe it’s not right.”

Indicating a similar trend, Gahlaut said, “It might follow what happened with cigarettes as it is completely banned. The only advertising medium they have is on the pack and they are allowed point-of-view sale with very strict guidelines. Depending on the severity of the restrictions, they will have to comply with the legal decisions taken.”

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