Brand extension permitted under law: CIABC

Vinod Giri, the Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), has communicated with the Central Consumer Protection Authority (CCPA) asserting that according to the law, brand extensions are permissible for advertising purposes. He emphasised that companies should possess an unrestricted right to advertise, provided there is no misrepresentation or misleading communication implying the product to be something else.

Giri's response follows the CCPA's directive to alcoholic beverage companies operating in India to ensure adherence to advertising standards. Additionally, the CCPA requested a comprehensive list of products sold under a particular brand, a practice known as brand extension, within the past three years. In response to this, the CCPA issued a directive to alcoholic beverage companies to comply with the request.

In its directive, CCPA asked companies to submit a list of products sold as surrogate extensions in a set deadline besides seeking revenue from brand extensions including water, soda, music fests, payments to celebs, etc.

The CIABC letter reads, "The regulatory focus on alcohol should be on creating quality brands, encouraging responsible behaviour, and reducing health risks." "Brand extensions are legitimate endeavours, and due to historical restrictions, companies have de-risked by creating parallel businesses. Since creating a new brand name is a very expensive proposition, companies tend to extend the same brand name which is familiar to consumers even if it is in a different product category since such familiarity lends credibility," CIABC noted further.