If, like me, you were glued to your television sets watching India and Australia slugging it out in the test series over the last one month, you couldn’t have missed seeing the plethora of ads for music CDs from brands such as Blenders Pride, Jacob's Creek, 100 Pipers, Absolut and Chivas. While most of us get our music now from streaming sources, there is a special feeling to these collectibles. Except that none of these companies are really in the music business. When I last checked, they make whiskies, wines or vodkas.
It's the age-old workaround for companies forced into this chicanery by regulation which prohibits the advertising of liquor in India, but not its consumption. The surprise is that they are airing despite a September 15 advisory by the Information & Broadcast ministry stating that surrogate advertisements such as these are to be previewed and certified by the Central Board of Film Certification to ascertain whether they are suitable for unrestricted public exhibition, and are in accordance with stipulated conditions. The problem, of course, is that as an advisory it isn’t legally binding.
Late last year, the Advertising Standards Council of India (ASCI) said it had registered cases against liquor brands for possible 'surrogate advertising' during the Indian Premier League (IPL) tournament in the United Arab Emirates. But again as a voluntary organisation, the ASCI can only press for self-regulation in advertising with little power to enforce it.
Given this strange conundrum, maybe we should just shed this hypocrisy and accept that some adults do drink and reaching them is a legitimate part of a company’s brief. Sure, there are dry states such as Bihar and Gujarat, but others such as Karnataka, Andhra Pradesh, Telangana, Tamil Nadu and Kerala as well Punjab, or even the national capital, allow free sale and purchase of alcohol.
What's more, after the COVID-19-induced lockdown it should be evident that revenues from these sales constitute a sizable share of most states' tax collections. Which is why bars and liquor vends were among the first few commercial establishments to be given permission to open. The long queues outside the stores even despite the steep hike in prices, were testimony to the huge suppressed demand. In fact, most liquor dealers are reporting an increase in sales even though most pubs are not yet open to full capacity.
For the last 25 years, India has had a ban on advertising liquor products. In this period their sales have zoomed with India now the highest consumer of whisky in the world. The Cable Television Networks (Regulation) Act, 1995 prohibited the direct or indirect advertising of ‘cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants’ though in 2009, the I&B ministry allowed advertisements of products even if they shared a brand name with a liquor or tobacco product so long as it wasn’t a manifestation of the prohibited product. That’s about the only part of the rule the advertisements seem to follow.
Clearly the ban hasn’t achieved the desired result. What it has done is to create a whole genre of surrogate advertising of the kind that we have been seeing. Companies have promoted such products as bottled water, soda and fruit juices as substitutes, but the effect is the same since the brand extensions promote exactly the lifestyle that the original product seeks.
Alcohol does have its dark side and it is legitimate for the State to try and regulate its consumption. But ultimately, unless it is banned, prohibiting its advertising achieves little. It might be far better to focus on promoting safe and moderate drinking.
Thanks to the steep excise duty on alcohol, it accounts for 10-15 percent of the tax revenues of most states barring the two that have active prohibition. It seems a bit rich for the government to collect these proceeds with one hand even as the other bans their promotion.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
