Get All Access for $5/mo

ASCI Fortifies Guidelines For Qualification of Brand Extension of Restricted Categories The Advertising Standards Council of India (ASCI) has updated its guidelines for 'Qualification of Brand Extension-products and services' under the restricted category prohibited from advertising by law.

By Kabir Singh Bhandari

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Photo by Julian Hochgesang on Unsplash

The Advertising Standards Council of India (ASCI) has updated its guidelines for 'Qualification of Brand Extension-products and services' under the restricted category prohibited from advertising by law. These modifications have been detailed in Chapter III Clause 3.6 (a) of the ASCI code, and specifically target brand extensions associated with restricted categories such as liquor and tobacco.

While ASCI had in place specific guidelines for brand extension, which were modified a few months back, it was felt necessary to further strengthen these in view of mega-budget celebrity campaigns during high-profile sporting events in India. ASCI's current guidelines provide for brand extensions to cross certain thresholds of business, investment or distribution criteria for them to be considered genuine extensions. ASCI has now added specific criteria also for advertising spends in relation to turnover of the said extension.

Key features of the new code for brand extensions:

  1. Advertising spends have to be in proportion to sales turnover of extension: ASCI has mandated that the advertising budget for genuine brand extensions of restricted master brands has to be commensurate with the extension's sales turnover. The proportions for the ad budgets are capped at 200 percent (ie. not more than 200 percent) of the turnover in the first two years of launch of the extension, followed by 100 percent (ie. not more than 100 percent) of revenue in the third year, 50 percent in the fourth year, and 30 percent thereafter. The advertising budget includes media expenditure across all forms of media in the previous 12 months, payments to celebrities for brand endorsements on an annualised basis, and the annual average money spent on advertising production for the brand extension in the previous three years.

This measure will ensure a balanced approach to advertising investment in alignment with the extension's sales performance over time.

  1. Treatment of Variants Under Brand Extension: For clarity, any variants launched under the brand extension will not be considered as a fresh extension. The original date of the first brand extension will apply.
  2. Certification by Reputed CA Firms: To ensure genuine compliance, all evidence supporting the brand extension's qualifications for advertising must be certified by a reputed and independent CA firm.
  3. If a brand extension of a parent brand that is under one of the restricted categories don't meet the updated qualifications, ASCI will not consider it to be a genuine extension, but a surrogate created to advertise a restricted category. ASCI's updates will contribute to maintaining the integrity of advertising in India, upholding ethical standards, and protecting consumers from misleading practices.

Throwing more light on the amendment to the fresh changes to the Brand Extension Guidelines, Manisha Kapoor, CEO and Secretary General, ASCI, said, "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."

Kabir Singh Bhandari

Former Senior Assistant Editor

News and Trends

FinX and FirstClub Raise Early-Stage Funding

The startups listed below have disclosed investment rounds.

News and Trends

Talent, Digital Infra, Policy, and Startups Driving India's GCC Ecosystem

By leveraging its demographic dividend and evolving policies, India is uniquely positioned to become the preferred choice for global enterprises seeking scalability, resilience, and a future-ready operational base.

News and Trends

Kalaari Capital's CXXO Initiative Sheds Light on Women Entrepreneurs' Struggles

The report highlights key findings on the gender funding gap, unconscious biases, and the resilience of women entrepreneurs.

Growth Strategies

Indian Graduates' Employability Rate Reaches 54.81 per cent: Report

By addressing regional disparities, fostering gender diversity, and equipping graduates with both technical and soft skills, stakeholders can harness the full potential of the nation's workforce.

News and Trends

Uber Launches Moto Women in Bengaluru, Connecting Female Riders with Female Drivers

Uber Moto Women aims to ensure safety with real-time trip sharing, anonymised contact details, and RideCheck monitoring for irregularities. It also offers 24x7 priority support via Uber's Safety Helpline for women riders and drivers.

Entrepreneurs

Skills for the New Age Wedding Entrepreneur

These key skills are essentials for wedding entrepreneurs today, but when supplemented by refined taste that lends itself well to curating ideas for every budget, they make for an exceptional bouquet of services