India to introduce new rules to close loopholes that circumvent its alcohol advertising ban, says Reuters

India is set to introduce stringent regulations that will expand its ban on direct alcohol advertising, according to a Reuters report. The new rules will pose a significant challenge to liquor firms such as Carlsberg, Pernod Ricard, and Diageo in their marketing strategies.

The regulations will introduce restrictions on surrogate advertising in which companies promote unrelated products such as water or glassware, and even zero-alcohol beer, using branding linked to their alcoholic products. For example, Carlsberg has promoted its Tuborg drinking water in India with advertising that closely resembles its beer promotions; while Diageo has used imagery from its Black & White scotch brand to market ginger ale.

Significant penalties will also be imposed on companies that engage in such practices, and on celebrities who endorse such adverts. The rules specify fines of up to INR5 million (USD60,000) for non-compliance ,and possible endorsement bans of up to three years for violators.

Event sponsorships will also be restricted by the rules.

The impending changes represent a major challenge for global alcohol producers operating in India, the world’s eighth-largest alcohol market by volume, with annual revenues estimated at USD45 billion by Euromonitor.

India has become a crucial market for companies like United Breweries, which holds more than a quarter of the market share by volume, as well as for Diageo and Pernod Ricard, which together control about 20% of the market.