Centre hits pause on surrogate ad norms fearing legal blowback

“There is a concern that any vague or overly broad provisions could face legal scrutiny over interpretation issues and their impact on legitimate brand extensions and commercial speech,” said the first of the two persons cited above.

The deadlock brings out the core of the issue: state governments heavily reliant on alcohol excise revenues are unlikely to aggressively enforce advertising restrictions on a sector that Crisil Ratings estimated at ₹5.3 trillion in FY26.

Mint first reported on 14 March 2024 about the government’s plan to draft stricter guidelines to curb surrogate advertisements.

Queries sent to the consumer affairs ministry on the issue remained unanswered till press time. Queries emailed to Pernod Ricard India, United Breweries, Carlsberg India, and Radico Khaitan also remained unanswered.

Public health advocates say that alcohol makers exploit a loophole, using look-alike branding on soda, packaged water and music events to keep their labels in front of consumers, while, technically, complying with advertising restrictions.

According to this person, the penalties and findings emerging after the completion of hearings are expected to provide greater clarity on the scope for further action against surrogate advertising practices.

Creating a false or misleading advertisement detrimental to consumers can lead to imprisonment for up to two years and a fine of up to ₹10 lakh, with subsequent offences potentially resulting in imprisonment for up to five years and a fine of up to ₹50 lakh, as per Section 89 of the Consumer Protection Act.

Legal experts said that the Consumer Protection Act gives the CCPA broad powers to act against misleading advertisements, but does not specifically define surrogate advertising, creating a major legal grey area.

“Alcobev companies often promote legally permissible products such as soda, packaged water and music events under the same brand identity as their liquor labels, making enforcement difficult. In the absence of a clear statutory provision, any separate guideline could face legal scrutiny over interpretation and regulatory overreach,” said Vijay Kumar, partner, Fox Mandal, a law firm.

Ruchira Jaitly, chief marketing officer of Diageo India, told Mint: “For alcoholic beverage companies, the challenge remains building trust in quality, responsibly curated offerings at scale amid growing industry proliferation. It is important to distinguish between surrogate advertising and legitimate brand extensions that leverage trademarks for incremental revenue streams.”

Both Indian and multinational liquor companies are prioritising responsible drinking messaging, while OTT has already displaced mainstream advertising, said Poonam Chandel, former managing director of Neuworld Spirits and Cobra Beer. She said that any regulatory tightening must equally target surrogate advertising by pan masala and cigarette makers.

“There also needs to be a larger debate on why alcohol advertising continues to remain restricted when state governments are heavily reliant on excise revenues,” Chandel added.

Advertising Standards Council of India (ASCI) chief executive officer Manisha Kapoor said companies have largely operated within the boundaries permitted by law.

Kapoor, whose organisation has attempted to draw a distinction between legitimate brand extensions and surrogate advertisements, said, “The real debate, however, lies in the nuance: where a permissible brand extension ends and surrogate advertising begins.”

The industry body has backed a self-regulatory approach, arguing that distinguishing between legitimate brand extensions and surrogate advertising remains complex.

Vinod Giri, director general of the Brewers Association of India (BAI), an industry body for India’s beer sector, said he understands the need to tighten oversight of surrogate advertising, “but the challenge lies in distinguishing between a genuine business diversification and plain, simple liquor promotion in violation of laws.”

Giri was also part of the March 2024 committee that examined surrogate advertising norms. The draft guidelines, slated for public consultation last year, are yet to be prepared as the government grapples with concerns over their legal validity.

Surrogate advertising deepens alcohol brand recall, particularly among young consumers, even when officially tied to non-alcohol products, said Dr Anand Vishal, professor in the department of medicine at the Atal Bihari Vajpayee Institute of Medical Sciences and Dr Ram Manohar Lohia Hospital. He called for regulations that balance industry interests with public health goals.