Mumbai: Consumer goods companies have begun registering more complaints with regulatory bodies and courts in a bid to counterclaims made by rivals in advertisements as competition intensifies across categories in a weak economy.
The Advertising Standards Council of India (ASCI) has seen a sevenfold rise in the number of complaints it received in fiscal 2013 over fiscal 2012, said Alan Collaco, secretary general of the self-regulatory body for advertising content.
In fiscal 2013, companies raised objections to 784 advertisements, of which 640 were upheld by ASCI. Out of these, the companies concerned withdrew the contentious advertisements in 90% cases. In fiscal 2012, 176 advertisements were brought to the notice of ASCI, out of which it upheld the objections in 103 cases. Companies complied in 80% of the cases by withdrawing the contentious ads.
ASCI launched its National Advertising Monitoring Service (NAMS) in May 2012 “because of the huge increase in the number of misleading advertisements”, said Collaco, adding it has monitored close to 500,000 advertisements in the past year.
Some consumer goods companies have gone to court.
For instance, on 8 February, Saffola oil maker Marico Ltd moved the Delhi high court, challenging advertisements by Adani Wilmar Ltd’s Fortune rice bran oil that claimed 100% rice bran oil was “the healthiest oil in the world”. On Monday Marico withdrew its plea.
Marico, in its petition, had objected to the ad on two counts—one, 100% rice bran oil is not the healthiest choice for reducing cholesterol and second, the ad “disparaged” brands such as Saffola by claiming superiority over other cooking oils.
Similarly, in February, Hindustan Unilever Ltd—the maker of Surf, Lux and Knorr--launched an advertisement for its Vim dish-wash taking potshots at Reckitt Benckiser India’s extension of its antiseptic and disinfectant brand Dettol into dish-washing with Dettol Healthy Kitchen Gel.
Reckitt Benckiser’s Dettol dish-washing liquid ad showed Vim up front and appeared to disparage the HUL product. In its advertisement, HUL asked, “A harsh antiseptic or the power of 100 lemons. Which one would you choose to clean your child’s tiffin?”
HUL dragged Reckitt Benckiser to the Calcutta high court, which has ruled that the latter needs to modify its ads and remove the visual of quantum of germs killed by use of the two competing products, though the ads can continue to compare Dettol Healthy Kitchen Gel with Vim.
In March, the two also bickered over the germ kill or protection efficacy of Dettol and Lifebuoy, which belongs to HUL. In the first week of March, ASCI asked Adani Wilmer to withdraw the Fortune oil ad and the company complied. However, on 18 April, the Delhi high court dismissed Marico’s petition. It said, among other things, that the “advertiser must be given enough room to play around in the grey areas”.
“Marico plans to appeal,” said a spokesperson, on the grounds that “100% rice bran oil is not the healthiest for reducing cholesterol and this has been scientifically proven”.
Angshu Mallick, chief operating officer, Adani Wilmar, countered that by saying: “We have never said anything wrong. We stand by the fact of rice bran is the world’s healthiest oil.”
Spats over advertising used to be common between beverage companies as evidenced by the cola wars but complaints from across the consumer segment are now on the rise as many firms have also started launching premium products and variants that claim to provide added health and wellness benefits. “Advertisers are becoming bold as they target customers of a rival product. This is because competition is increasing,” said Anuradha Salhotra, managing partner at Gurgaon-based law firm Lall Lahiri and Salhotra, which represented Marico in the Delhi high court.
In February, for instance, when GlaxoSmithKline Consumer Healthcare Ltd launched Parodontax toothpaste targeted at consumers with bleeding gums, Colgate-Palmolive (India) Ltd responded with full-page print advertisements of its own Colgate variant product being the best.
“Health and wellness products, or products promising some benefits gain higher acceptance and do well,” said Pankaj Gupta, practice head, consumer and retail, Tata Strategic Management Group. He added the health, wellness and premiumization trend is seeing high growth in the Rs.1.45 trillion packaged food market.
Even as the companies fight it out, consumers are left wondering who they should believe. “India is just awakening to the concept of consumer centricity and, in the past few years, there are mechanisms like ASCI and consumer forums that are helping the industry to self-regulate,” said Safir Anand, senior partner and head of trademarks, contractual and commercial IP (intellectual property), at law firm Anand and Anand. “However, the Indian consumer is not as aware compared to advanced countries like the UK and the US.”
Prathap Suthan, chief creative officer and managing partner of independent advertising agency Bang In the Middle, said Indian consumers need to wise up and not believe everything that they read or see.
“We are such a gullible lot. It also is important to note that we don’t have very active and very strong consumer bodies that can publicly flay brands,” Suthan said. “I am not even sure if there are government bodies that actually brings things into public conversation. And since might is right, and silence works in favour of lies, we continue to be at the receiving end.”
False and misleading claims are common elsewhere in the world too. TerraChoice, a Canadian research firm, sent its researchers to retailers in the US, Canada, UK and Australia. Their finding—only 25 out of 1,000 products or services had not made claims that are either demonstrably false or risk misleading intended audiences.
“This was in 2010,” said Kiran Khalap, co-founder, Chlorophyll Brand and Communications Consultancy Pvt. Ltd. He added brands should focus on the new needs of the customer rather than the old claims of competitors to influence consumers.