India is set to implement new regulations that will prohibit surrogate advertising and event sponsorships by liquor companies, a move that could significantly impact marketing strategies for firms like Carlsberg, Pernod Ricard, and Diageo. These surrogate ads often promote unrelated products such as water or glassware, using branding closely associated with the liquor.

Nidhi Khare, the top civil servant for consumer affairs, explained that the new rules aim to close loopholes that allow indirect promotion of liquor. Celebrities endorsing these misleading ads could also face penalties. Khare emphasized that companies cannot use indirect methods to advertise their products, with final rules expected within a month.

The new regulations will ban surrogate ads and sponsorships for products that are essentially extensions of alcohol brands. Violations could result in fines of up to 5 million rupees ($60,000) and bans on endorsements for one to three years.

For instance, Carlsberg’s Tuborg water and Diageo’s Black and White ginger ale ads have used branding similar to their alcohol products. Such marketing tactics are targeted by the new rules.

India’s alcohol market, worth an estimated $45 billion annually, is attractive due to the country’s growing affluence. Major players like United Breweries, Diageo, and Pernod Ricard hold significant market shares.

The International Spirits and Wines Association of India, representing major liquor brands, is in discussions with the government and supports the advertising of genuine brand extensions.

The World Health Organization has noted that comprehensive bans on alcohol advertising are effective in promoting public health. India's new rules are inspired by global practices, such as those in Norway, which have successfully reduced alcohol consumption through stringent advertising bans.

The new regulations will target ads for products like soda or music CDs that use similar branding to liquor products, aiming to prevent indirect advertising. Recent warnings to liquor companies and domestic tobacco firms about misleading ads indicate a stricter enforcement approach.

India’s goal is not to eliminate brand extension ads but to ensure they accurately represent the product being promoted, without misleading consumers into thinking the ad is for a liquor brand.

For example, a Pernod video featuring Bollywood star Alia Bhatt, ostensibly for Blenders Pride glassware, closely mimics the branding of the whisky but does not show any actual glassware. Such ads will be prohibited under the new rules.

This significant shift in advertising regulations underscores India’s commitment to reducing misleading liquor promotions and enhancing public health measures.