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Tobacco ad ban to cost Rs 250 cr

23-April-2004
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Tobacco ad ban to cost Rs 250 cr

With the blanket ban on tobacco advertising through all media coming into effect from May 1, the advertising industry is set to lose nearly Rs 250 crore. Tobacco companies too are now banking on aggressive customer contact programmes to get access to their buyers.

“We support the ban and such pressures are not new for the industry. We will have to look at the point of sales promotion and go for innovative inserts in cigarette packs,” said a Godfrey Phillips India (GPI) spokesperson.

GPI, the second largest cigarette manufacturer in the country, spent roughly Rs 20 crore on advertising in 2003-04. Market leader ITC refused to comment on the issue, but the ad industry estimates that it will lose business worth Rs 80-90 crore this year when ITC pulls out its ads.

International cigarette giant Phillip Morris which started marketing the Marlboro brand directly in the country earlier this year, has gone on an outdoor advertising overdrive to make the most of the remaining few weeks before the ban takes effect.

“We deal with such regulations in various markets internationally. But the good thing is that this regulation is uniform and there is a level playing field,” said Ajit Sahgal, GM Philip Morris (India).

But Ashok Aggarwal, president DS Group, the largest chewing tobacco company in India said that it will be very difficult to monitor surrogate advertising.

The DS Group’s turnover from its leading tobacco brands like Baba and Tulsi was close to Rs 400 crore last fiscal and it spent Rs 20 crore on advertising. “It is easy for companies to launch non-tobacco variants with the same brandname and continue advertising. The government should ban all such promotions,” he said.

“The worst affected will be the outdoor advertising companies as tobacco products relied heavily on this medium. Some companies spend as much as 45-50 per cent of their ad budgets on outdoors,” said CVL Srinivas, managing director, Maxus.

He added that tobacco companies are sure to come up with innovative marketing plans to counter the ban on both regular and surrogate advertising.

“Outdoor tobacco advertising accounts for nearly Rs 45 crore or more than 20 per cent of the entire tobacco advertising,” said an executive from Madison Outdoor Media Services.

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