This article was originally published in The Economic Times (Corporate Counsel section), a leading business daily in India, on June 14, 2003.
Tobacco advertising does more than offer a nicotine high; it promises a sophisticated lifestyle that stems merely from holding a cigarette. In India, the advertising industry has been largely self-regulated. To circumvent the regulations, advertisers have frequently used methods such as "surrogate advertising" to promote such products.
WHAT IS SURROGATE ADVERTISING?
Surrogate advertising is the promotion of a product, through indirect and devious means. Typically, an advertiser would use the trademark/brand of a product for which promotions are restricted/prohibited to promote a product the advertisement of which is permitted. For instance, it is not unusual to find a brand associated with cigarettes to be used to advertise a competition/event. The advertising of socially harmful products such as tobacco and alcohol, has been sought to be restricted by Indian lawmakers. Such prohibitions were, however, previously limited to forms of media such as terrestrial television and radio which were easier to regulate. With technological advances such as satellite television and the Internet, advertisers have been finding ways to circumvent restrictions to achieve their goals.
THE WAR AGAINST NICOTINE
In 2001, judicial activism fuelled by public outrage against tobacco propelled the Supreme Court to direct the central government, all state governments and union territories to ban smoking in public spaces. Circa 2003 marked a landmark in the worldwide fight against tobacco, heralding the first international treaty, Convention on Tobacco Control (CTC), which was negotiated by the WHO and unanimously adopted by its 191 members. Led by the WHO, governments of several countries and non-government organisations, the CTC is the latest initiative against the global struggle to ban the consumption of tobacco and tobacco-related products.
THE CIGARETTES AND OTHER TOBACCO PRODUCTS (PROHIBITION OF ADVERTISEMENT AND REGULATION OF TRADE AND COMMERCE, PRODUCTION, SUPPLY AND DISTRIBUTION) ACT, 2003, (‘THE ACT’)
In India, the need for legislation to stop advertising and regulation of production, supply and distribution of cigarettes and tobacco products was recommended by the Parliamentary Committee on Subordinate Legislation. The Rajya Sabha passed the bill on April 9, 2003, while the Lok Sabha did the same on April 30, 2003. The Act is pending notification and is still not in force. The Act has repealed the Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975.
The underlying purpose of the Act is to ban advertising of cigarettes and other tobacco products, and to prohibit sponsorship of sports and cultural events either directly or indirectly. In effect, there is a blanket ban on the advertising of such products.
For cigarettes, the Act is applicable within India, while it extends to Goa, Punjab, Uttar Pradesh, West Bengal, and all the Union territories for other tobacco products. Other states may adopt the Act by passing a resolution in the manner prescribed by the Constitution of India.
The term ‘tobacco products’ has been broadly defined to include cigarettes, cigars, cheroots, beedis, cigarette tobacco, pipe tobacco and hookah tobacco, chewing tobacco, snuff, pan masala or any chewing material having tobacco as one of its ingredients (with whatever name called), gutka and tooth powder containing tobacco.
The term advertisement as defined in the Act includes any visible representation by notice, circular, label, wrapper or other document, and also includes any announcement made orally or by any means of producing or transmitting light, sound, smoke or gas.
RELEVANT PROVISIONS OF THE ACT
Section 4 (1) of the Act provides that no person engaged in, or purported to be engaged in the production, supply or distribution of cigarettes or any other tobacco products would advertise and no person having control over a medium would cause to be advertised, cigarettes or any other tobacco products through that medium and no person shall take part in any advertisement which directly or indirectly suggests or promotes the use or consumption of cigarettes or any other tobacco products.
Section 4(2) of the Act provides that no person, for any direct or indirect pecuniary benefit, shall display, cause to display, or permit or authorise to display any advertisement of cigarettes or any other tobacco product or sell or cause to sell, or permit or authorise to sell a film or video tape containing advertisement of cigarettes or any other tobacco product or distribute, cause to distribute, or permit or authorise to distribute to the public any leaflet, hand-bill or document which is or which contains an advertisement of cigarettes or any other tobacco product or erect, exhibit, fix or retain upon or over any land, building, wall, hoarding, frame, post or structure or upon or in any vehicle or shall display in any manner whatsoever in any place any advertisement of cigarettes or any other tobacco product.
However, there is a proviso to the above section that states that the Act would not apply to an advertisement of cigarettes or any other tobacco product in or on a package containing cigarettes or any other tobacco product or advertisement of cigarettes or any other tobacco product, which is displayed at the entrance or inside a warehouse or a shop where cigarettes and any other tobacco products are offered for distribution or sale.
Section 4(3) of the Act states that no person would under a contract or otherwise promote or agree to promote the use or consumption of cigarettes or any other tobacco product or any trademark or brand name of cigarettes or any other tobacco product in exchange for a sponsorship, gift, prize or scholarship given or agreed to be given by another person.
Under section 22 of the Act, punishment for advertisement of tobacco products, upon first conviction, is that a person would face imprisonment for a term which may extend to three years or with fine which may extend to one lakh rupees and in case of second or subsequent conviction, with imprisonment which may extend to three years, or with fine which may extend to two lakh rupees, or with both. Further, all the advertisements and advertisement material would be forfeited by the authorities. In the case of offences by companies, the Act also prescribes that directors/managers of the company would be held liable.
On a preliminary reading, it appears that the Act contemplates a complete ban on advertising these products through any media in any manner whatsoever. The Act also prohibits sponsorship of events by persons engaged in the business of cigarette or tobacco products. Whether the relevant provisions of the Act can be considered to be reasonable will be determined once the Act comes into force.
ALL SMOKE, NO FIRE!
All over the world, cigarette companies are rapidly diversifying and creating situations that enable them to escape the purview of similar provisions under their domestic laws. If a trademark and brand name is used for cigarettes or any tobacco products, as well as for any other non-tobacco product, or an event, the association of brands will continue to be possible. It appears that the government’s intent does not extend to prohibiting production, distribution and sale of tobacco products. It also does not appear the intent to limit the use of trademarks/brands in respect of cigarettes and tobacco products only to these products. Thus, the Act may not be able to curtail surrogate advertising.
While the Act is well intended and in keeping with the international trend, it is yet to be seen how it will be implemented and enforced. Or will the effect be as fleeting and momentary as a puff of cigarette smoke.
Courtesy: DSK Legal
The views expressed in this article are those of the authors and do not represent the views of the firm. This article does not purport to be professional advice, nor a complete or comprehensive study on the subject. It is recommended that professional advice be sought before taking any action pursuant to any matter contained in this article.