Promotions Under The Garb Of Surrogacy Or Genuine Brand Extension? - Explained

To primarily target misleading advertisements, Central Consumer Protection Authority (“CCPA”) notified the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisement, 2022 (“Guidelines”), which lays down criteria for advertisements. Since the Rules regulated advertisements aired on private satellite television channels only, the Guidelines were introduced with a motive to regulate advertisements aired across all media i.e., online, print and television.

Promotion of consumption of liquor, tobacco, and other intoxicants has been prohibited for decades. However, promotion of these restricted products continued under the garb of surrogate advertising. Surrogacy is a mere substitution of non-restricted products with restricted products, to promote the latter. Remember the iconic jingle “Ooh La Lala Le O”? which is today synonymous with Kingfisher, the King of Good Times. While this commercial promoted ‘Kingfisher Packaged Drinking Water’, a layman would associate the same with the brand ‘Kingfisher’ associated with beers. The bottled water (masked product) was substituted with beer, with an intention to generate a brand recall in the minds of public.

Another aspect of surrogate advertising is ‘brand extension’. Brand extension is the use of brand names/logos that is used for the prohibited products, and which can also be used for non-prohibited products, provided the criteria are met. Under the garb of brand extensions, the brands circumvented the prohibition on surrogacy, and it was now imperative to distinguish between a masked product and a genuine brand extension.

While the Rules prohibit surrogate advertising, it allows promotion of unrestricted products using the same brand name/logo, used for prohibited products, provided, the non-restricted product does not make any references to or contain any nuances of the prohibited product and is offered in large quantities at several outlets. Further, such advertisements should not use specific colors, layouts, or presentations associated with prohibited products, and the projected advertising cost for the unrestricted products should not be disproportionate to the actual sales turn-over of that product.

The Guidelines, however, do not recognize brand extension. It only provides for a vague exception, wherein, a brand used for prohibited goods/products, services could be used for other goods provided, the Guidelines are not violated. It is unclear if inclusion of this exception was with the intention to permit brand extensions. Taking the above example, if Kingfisher promoted ‘bottled water’ meets the criteria laid down above i.e., if it is a product genuinely being sold by the brand and not just a masked product, the same will be considered as a brand extension. Not only did Kingfisher promote bottled water and sodas, the real buzz was created with the inauguration of ‘Kingfisher Airlines’. While there are polarizing views on the airline being a product of surrogate advertising or brand extension, some in the advertising industry considered Mr. Mallya as a real surrogate in the liquor category.

Recently, the Government issued notices to various liquor brands over surrogate advertising which added to the confusion. The liquor brands which claim to be advertising their non-restricted products under brand extensions reached out to the Government to provide a clear and concise definition of ‘surrogate advertising’ and ‘brand extensions’. We will have to wait until specific criteria have been established for brand extensions, which will be applicable to advertisements across all media.

Product brand extension is a strategy to expand the portfolio of a company and take advantage of an established name in the market. With the Government being more dynamic in this space, it will be interesting to see how companies defend their advertising as brand extensions. Clarifications on definitions of ‘surrogate advertising’ and ‘brand extensions’ would also be key as to how brands are able to advertise going forward.

Author: Jinal Shah (Associate) Pioneer Legal. Views are personal.