The Hindu Business Line : Liquor cos put ad campaigns on hold

While a slew of companies have even put their plans to bring in premium brands to the country on hold, waiting for a breather from the Government, some others have found a temporary solution – increasing their below the line activities to continue to grab consumers’ attention.

Analysts and industry watchers believe that the ban on surrogate advertising could cost the broadcasting industry as much as Rs 200-250 crore a year. New ads have been put on hold.

Biggest losers

“Consumers will be the biggest losers as they will be stuck with the same repertoire of brands. Companies are going strong on below the line activities to enhance brand presence. However, all new launches will have to wait. This means that what is available internationally, would take a while to be made available in India,” said Mr Mahesh Madhavan, President and Chief Executive Officer of Bacardi-Martini India.

He said the company, which was exploring introducing premium brands such as Eristoff and Vermouth in India, is putting its brand extension in “the freezer till there is clearer notification on the advertising issue”.

Ad spend

Kingfisher Mineral Water, McDowell’s No 1 Soda, and Bacardi Blast were amongst the biggest advertisers on television. According to media buyers, an average liquor brand’s spend across platforms is as much as Rs 45 crore, and as long as a surrogate brand has a strong business proposition, it should be allowed to advertise.

According to Mr Harish Moolchandani, CEO and Country Head of Beam Global Spirits and Wine, “If a company can sell liquor, than why prevent it from being advertised. At the end of the day, we are selling products that are just like any other FMCG products.” Mr Moolchandani’s company is focusing more on in-shop promotions in cities like Kolkata, Bangalore and Mumbai.

“We are also undertaking a lot of event-based campaigns. Since there is very little clarity on the notification, at least 70 per cent of our marketing budget is spent on BTL activities,” he added.

According to the Global Status on Alcohol (World Health Organisation, 1999), although India has one of the lowest per capita alcohol consumption rates in the world, it is rapidly on the increase.

Consumption

The alcohol industry generates an estimated Rs 16,000 crore a year. Last year, Indians consumed 60 million cases of whisky. That made India the world’s largest whisky market by volume, pushing the US, which consumed 40 million cases, to the second place.

But if the black market in liquor were to be taken into account, India probably overtook the US quite some time ago.