Navigating The Grey Zone: Advertising Alcohol On Digital Screens In India

The Real-World Challenge

Imagine a rapidly expanding digital advertising platform being approached with an enticing proposal: to promote a prominent beverage brand. The twist? The brand is associated with alcohol, and in India, alcohol advertising operates within one of the most strictly regulated and contentious legal frameworks.

For the platform, the pressing question was both straightforward and intimidating: "Are we able to legally promote this without encountering issues?"

This is a challenge that numerous digital media companies and advertisers are increasingly confronting as consumer engagement swiftly transitions to digital displays in shopping malls, airports, and even residential complexes.

The Legal Landscape

1. Article 47 of the Indian Constitution mandates the State to deter the use of intoxicating beverages and highlights the government's responsibility to strive for a decrease in alcohol consumption, presenting it as a Directive Principle of State Policy with significant consequences for public health and social welfare.
2. The Cable Television Networks (Regulation) Act of 1995 clearly forbids the direct promotion of alcoholic drinks on cable television networks, establishing a standard for restrictions that have shaped advertising practices across various media. This legislation embodies the policy objective of curbing the glamorization of alcohol, and although it is specific to cable, its principles are often applied by regulators when evaluating compliance on other broadcasting and digital platforms.
3. The ASCI Code permits only surrogate advertising. This indicates that although direct promotion of alcoholic beverages is not allowed, brands are permitted to advertise alternative products like bottled water, soda, or music CDs under the same brand, as long as these products are authentic, marketed independently, and available commercially. Furthermore, the ASCI Code emphasizes that such advertising must not inadvertently promote or glorify alcohol consumption, and any efforts to disguise liquor promotion through deceptive surrogates may lead to regulatory penalties.
4. The Consumer Protection Act of 2019 establishes a framework of strict liability for advertisers engaged in misleading, false, or indirect promotions of products related to alcohol. This Act confers upon consumer protection authorities the authority to conduct investigations, impose sanctions, and require the retraction of such advertisements. Furthermore, it categorically designates surrogate or disguised advertisements for alcohol as unfair trade practices, thereby subjecting both advertisers and publishers to potential financial penalties and damage to their reputations.
5. The Information Technology Act of 2000 imposes liability upon platforms that host impermissible content, thereby establishing an obligation for digital intermediaries to exercise due diligence in the oversight and removal of unlawful materials. This Act, further augmented by the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules of 2021, mandates that platforms engage in proactive content moderation, respond expeditiously to regulatory takedown notifications, and maintain systems designed to avert the distribution of advertisements that violate existing prohibitions, including those pertaining to alcoholic beverages.

Our Approach: From Risk to Roadmap

1. Regulatory measures: The ASCI or state excise authorities may commence inquiries, issue show-cause notices, levy fines, or require the retraction of advertisements deemed misleading, non-compliant, or in breach of surrogate advertising regulations. This type of intervention could also result in increased examination of the platform's comprehensive advertising practices.
2. Consumer backlash: Resident Welfare Associations or building managers may voice objections that range from worries about exposing minors to alcohol-related branding, to concerns about morality, public disturbances, or potential reputational damage to the community. Such opposition could result in complaints, requests for removal, strained interactions with property managers, or even coordinated campaigns against the platform that threaten its operations and goodwill.
3. Liability: Allowing non-compliant content could subject the platform to a broad array of repercussions, such as financial fines, operation suspensions, harm to its reputation, and even criminal liability in specific jurisdictions. Platforms might be obligated to remove offending advertisements immediately upon receiving notice, and neglecting to act promptly could lead to the forfeiture of safe-harbour protections under the IT Act.

Ways to create a compliance-first advertising strategy that allows growth while avoiding legal pitfalls

1. Robust contracts: Advertisers must be contractually obligated to: (i) affirm complete adherence to all applicable national and state laws regulating alcohol and surrogate advertising, (ii) furnish documentary evidence of necessary permits, excise approvals, or licenses when required, (iii) protect the platform from regulatory actions, third-party claims, or community objections resulting from non-compliance, (iv) guarantee that the surrogate products are authentic, independently marketed, and commercially accessible with verifiable sales data, and (v) routinely update the platform with compliance certificates to maintain ongoing adherence. This ensures that the platform is not solely depending on good faith but possesses enforceable contractual safeguards.
2. Termination Clauses: Insert clear termination clauses empowering the platform to immediately withdraw ads if violations arise, including regulatory notices, community objections, or breach of contractual warranties, and providing for financial recovery or penalties against the advertiser where necessary.
3. Content approval: Instituting a comprehensive pre-publication review process that extends beyond a basic check, necessitating advertisers to supply documentary evidence that the surrogate product is authentic, commercially available, and legally compliant. This procedure should incorporate a compliance checklist, internal legal review, and, when needed, third-party verification. The objective is to guarantee that no covert alcohol advertisement bypasses scrutiny, thereby shielding the platform from regulatory penalties or reputational harm.
4. Community engagement: Extending beyond mere approvals, this entails actively engaging with RWAs, commercial building management, and local community stakeholders to clarify the essence of surrogate advertising, address potential objections, and obtain documented permissions. It also encompasses creating a transparent communication channel for addressing concerns, organizing briefings to elucidate compliance measures, and ensuring that the placement of advertisements honours community sensitivities to avert disruptions and foster trust.

Key Takeaways for the Industry

1. Surrogate advertising should not be perceived as a loophole; rather, it serves as an instrument of compliance. It operates as a legally sanctioned avenue solely when the surrogate product is authentic, commercially accessible in the marketplace, supported by legitimate business activities, and promoted in a manner that distinctly differentiates it from the affiliated alcohol brand. Responsible marketing practices, transparent disclosures, and strict adherence to ASCI guidelines are imperative to ensure that surrogate advertising remains a protective compliance strategy rather than a precarious workaround.
2. Digital platforms do not function as passive intermediaries. They are legally mandated to operate with due diligence by instituting mechanisms such as pre-screening of advertisements, content moderation systems, and efficient takedown procedures. Neglecting these obligations exposes them to potential liability under the IT Act and its 2021 Rules, which may result in financial penalties, regulatory scrutiny, or the forfeiture of safe-harbour protections.
3. The consent of the community is of paramount importance. Even if an advertisement adheres to all statutory and regulatory stipulations, opposition from residents, Resident Welfare Associations (RWAs), or local municipal bodies can impede, disrupt, or completely obstruct operations. Consequently, community acceptance becomes a practical imperative: platforms must actively foster trust, transparently communicate compliance initiatives, and obtain documented endorsement from local stakeholders to ensure the seamless and sustained execution of advertising campaigns.

Conclusion

As the realm of online promotion in India keeps growing, authorities in charge are ramping up their examination of the nature and approach of ads. While surrogate alcohol advertisements may persist in the immediate future, the level of oversight is increasing due to more frequent evaluations, a stricter interpretation of the Advertising Standards Council of India (ASCI) guidelines, and the potential implementation of new regulations by state excise departments. Entities that integrate compliance into their foundational operations today will not only evade punitive measures but also cultivate enduring trust from regulatory bodies, communities, and audiences, thus positioning themselves as responsible leaders within an industry where credibility and adherence to regulations are critical for survival. What initially appeared to be a precarious endeavor for a singular platform has ultimately evolved into a paradigm for how digital enterprises can align their growth strategies with legal compliance. In the intricate realm of alcohol advertising, the genuine competitive advantage is not derived from circumventing regulations but rather from mastering them, developing systems, practices, and reputations that facilitate sustainable growth while adhering to regulatory, communal, and ethical standards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.