Surrogate advertisement rules stuck in a legal grey zone

There is little clarity yet on a timeline for the guidelines even after one-and-a-half years of a government panel first meeting to fix these gaps from which surrogate promotions scrape through

The consumer law does not define surrogate advertising or treat indirect promotion of prohibited products such as alcohol and tobacco as a standalone offence, limiting the government's ability to issue binding rules.

“The consumer affairs ministry is examining whether the guidelines can be rolled out through executive action, while the department of consumer affairs is of the view that the current law allows intervention only when an advertisement is misleading with respect to the product being promoted, limiting the scope for such guidelines,” said the first of the two people cited above.

In most such cases, the advertised product, such as packaged water, soda, music CDs or merchandise, is legally sold and not misleading in isolation, even if it uses the same brand name, logo or colours as a prohibited product. This makes enforcement difficult and legally fragile.

“There have been gaps in the framework to control brand extension by liquor manufacturers. This is because drawing the line between what is surrogate and what is a genuine new venture is very difficult,” said Vinod Giri, director general of the Brewers Association of India (BAI), an industry body for India’s beer sector.

“The best course is to get industry aligned on a strong self-regulatory framework. The government should consider issuing a voluntary advisory for companies to regulate surrogate advertisements, as there are instances where liquor makers create separate entities or use similar brand names to run other sub-businesses in non-restricted space,” said Giri, a member of the committee formed in March 2024 to regulate surrogate ads.

“Such practices are difficult to regulate under the existing norms of the Central Consumer Protection Authority. Voluntary, self-regulatory advisories, on the other hand, are generally well-respected by companies,” Giri said.

Queries related to the issue sent to the consumer affairs ministry on 27 December remained unanswered until press time.

Mint had first reported on 14 March 2024 that a committee formed by the Central Consumer Protection Authority (CCPA) had held a meeting on surrogate advertisements, with discussions focused on ensuring that promotional activities are genuine and that companies do not misuse legal provisions meant for brand extension.

Later, on 30 July, Mint reported that a draft report on surrogate advertising had been finalized after consultations with all stakeholders and it was expected to be rolled out within a few days. The draft report had said alcohol manufacturers advertising products such as glass tumblers, playing cards, music CDs and similar items to implicitly promote their alcohol brands would need to halt such surrogate advertisements, unless they could consistently demonstrate that these products had their independent markets. The draft norms have not been rolled out yet.

The second person aware of the matter said the CCPA's powers are derived from the Consumer Protection Act, under which the authority can impose penalties for misleading advertisements, but it must demonstrate deception or false claims directly linked to the advertised good or service. Brand recall or indirect association, which lies at the core of surrogate advertising, does not clearly meet this legal test under the existing law, the person added.

In FY25, total penalties imposed by the authority for misleading advertisements crossed ₹1 crore, driven largely by action against coaching institutes and digital platforms, while the reported fines have already exceeded ₹1.1 crore so far this calendar year, with more cases still under examination.

According to a report in The Times of India, the CCPA has issued notices to 13 companies, including leading alcohol, tobacco and pan masala manufacturers, over surrogate advertisements. As of now, no penalty has been imposed.

“The guidelines will come. We are exploring other options to make them foolproof, so that they are legally binding and can stand scrutiny in courts, just as we did while framing the guidelines for IAS coaching institutes,” said the second person in the know.

“As a physician and an endocrinologist, I regularly see the serious health problems caused by alcohol and tobacco use. The most common and severe harms include liver disease, cancers, heart disease, stroke, and metabolic disorders such as diabetes,” 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.

Stressing that a broader and stricter public health approach is urgently needed, he said there are other ways for ‘soft’ advertising too. “While surrogate advertising is often discussed, these products are promoted through many other routes as well, including event sponsorships, influencer content and lifestyle branding," Dr Vishal said. "Of particular concern are ‘soft’ advertisements on electronic and digital media, which subtly link these brands with glamour and success. Such messaging lowers awareness of harm and encourages use, especially among young people.”

“A key hurdle is fragmented regulation. Advertising of alcohol and tobacco is primarily governed by sectoral laws such as the Cigarettes and Other Tobacco Products Act and state excise rules, while industry oversight largely rests with the Advertising Standards Council of India’s voluntary code,” said Ashim Sanyal, chief executive officer of Consumer Voice. "The Consumer Protection Act does not give the Centre explicit powers to override or unify these regimes through guidelines alone.”

“The delay in issuing formal guidelines on surrogate advertising showcases the difficulty of regulating an industry that is governed by both central advisories and state excise laws, while marketing increasingly happens on national digital platforms,” said Avneet Singh, founder and chief executive at Medusa Beverages, an Indian beer company.

“At the same time, the industry has become far more organised and scaled. Several Indian beer and spirits companies today operate across 15–20 states, sell close to a million cases annually, and are backed by institutional capital. This shift makes regulatory clarity more urgent than ever,” Singh said.

“To curb surrogate advertising effectively, the focus has to move from form to intent. Brand extensions should be evaluated on actual commercial activity, not just registration," he said. "Clear digital guidelines, mandatory disclosures, and stronger platform accountability will be essential to ensure consumer protection while allowing compliant companies to compete on a level-playing field.”

In India, surrogate advertising is indirect promotion of products whose direct advertising is prohibited by law, most commonly alcohol, tobacco and related products, by advertising legally-permitted ‘brand extensions’ that carry the same brand name, logo, colours or imagery. Common surrogate products include music albums, CDs, glassware, soda and mineral water.

Alcohol makers also sponsor music concerts, cultural festivals and award shows to target the youth, who are potential consumers.

As per Section 89 of the Consumer Protection Act, 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.

India’s alcoholic beverage (alcobev) industry is projected to record 8-10% revenue growth in FY26, reaching $61.97 billion, according to a May 2025 report by Crisil Ratings.