ASCI strengthens guidelines for brand extension advertising of restricted categories

The Advertising Standards Council of India (ASCI) has reinforced its guidelines pertaining to the ‘Qualification of Brand Extension-products and services’ within restricted categories such as liquor and tobacco. These updates, outlined in Chapter III Clause 3.6 (a) of the ASCI code, come in response to the surge in mega-budget celebrity campaigns during high-profile sporting events in the country.

ASCI’s existing guidelines already addressed brand extension criteria, but recent modifications aim to bolster these regulations. Notably, the focus is on establishing more stringent criteria for advertising spends, particularly concerning turnover and mega-budget celebrity campaigns.

Key Features of the New Code for Brand Extensions

1. Proportional Advertising Budgets

ASCI now mandates that the advertising budget for genuine brand extensions of restricted master brands must align with the extension’s sales turnover. The proportions for ad budgets are capped at 200 percent in the first two years, followed by 100 percent in the third year, 50 percent in the fourth year, and 30 percent thereafter. This ensures a balanced approach to advertising investment in line with the extension’s sales performance over time.

2. Treatment of Variants

Variants launched under the brand extension won’t be considered as fresh extensions. The original date of the first brand extension will be applied for clarity and consistency.

3. Certification by CA Firms 

To guarantee compliance, all evidence supporting brand extension qualifications for advertising must be certified by a reputed and independent CA firm.

4. Ensuring Genuine Compliance

If a brand extension under restricted categories fails to meet the updated qualifications, ASCI will not recognize it as a genuine extension but as a surrogate created to advertise a restricted category. These updates reflect ASCI’s commitment to maintaining advertising integrity, upholding ethical standards, and protecting consumers from misleading practices.

Manisha Kapoor, CEO and Secretary General of ASCI, emphasized the necessity of these additions to the Brand Extension Guidelines. In a statement, she noted, “As part of our ongoing commitment to consumer protection and ethical advertising, ASCI has introduced these new additions to the Brand Extension Guidelines. These measures are essential to prevent the misuse of brand extensions as surrogates for advertising in restricted categories. We believe that these guidelines will strengthen the integrity of advertising in the industry.”

ASCI’s proactive stance is poised to shape a more responsible and transparent landscape for brand extensions, ensuring that advertising aligns with ethical standards and consumer well-being in India.