The Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the consumer affairs ministry stating that “for brand extensions permitted under law to advertise, companies should have unfettered right to advertise provided there is no misrepresentation or miscommunication suggesting the product to be something else.”
CIABC’s members include Allied Blenders & Distillers, Amrut Distilleries, Devans Modern Breweries, Globus Spirits, Jagatjit Industries, Mohan Meakin, Radico Khaitan and Sula Vineyards.
The CIABC’s letter follows a government directive to alcohol makers asking companies to submit a list of products sold as surrogate extensions in fifteen days besides seeking revenue from brand extensions, ET reported. According to the letter signed by Vinod Giri, director general of CIABC, and addressed to Anupam Mishra, joint secretary at ministry of consumer affairs, food and public distribution: “The regulatory focus on alcohol should be on creating quality brands, encouraging responsible behaviour, and reducing health risks.”
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The letter added, “Brand extensions are legitimate endeavours, and due to historical restrictions, companies have de-risked by creating parallel businesses. Since creating a new brand name is a very expensive proposition, companies tend to extend the same brand name which is familiar to consumers even if it is in a different product category since such familiarity lends credibility.”
In a recent interview, consumer Affairs Secretary Rohit Kumar Singh addressed the concerns of misleading advertisements and surrogate ads. Singh discussed surrogate ads for alcohol and said that industries like alcohol and tobacco try to circumvent the advertising regulation, he said pointing to extensions of a brand.
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Singh said, “So we say no, you have to give us details of sales. CCPA, which I chair now, has just issued an order about a week back that they have to give us the value of the advertising on the extended brand, that is what is the actual revenue they get from the sales because any normal business practice will have you advertise in proportion to the revenues of that product. So if it is out of proportion, that means the surrogate advertising is being indulged in and that’s an unfair trading practice.”