Friday, December 8, 2006
By Michael Ramirez and Joshua Hauserman
Most people are aware of the Thai Food and Drug Administration's (FDA)'s intent to enforce a total ban on alcohol advertising in the kingdom. The ban, which was originally scheduled to take force on Dec 3, has been the subject of considerable debate regarding its scope and the FDA's legitimacy to institute such restrictions.
This debate, including the Council of State's recent opinion challenging the FDA's authority to implement the ban, resulted late last week in an FDA decision to postpone implementation of the ban for 30 days pending formal review by the Council of State. Regardless of what decision the Council of State makes, it is likely that Thailand will see this or a similar act banning alcohol advertising in the near future, and perhaps as early as January 2007.
While much of the discussion focuses on how this will affect major liquor producers and advertisers, there has been little analysis of the impact on other business sectors, such as restaurants, convenience stores and entertainment operators. This is partly the result of the broad draft of the advertising ban, which has been criticised for lacking clarity. By providing a basic analysis of how we believe the proposed law will affect these operators, we hope to assist in planning for its inevitable arrival.
Clear prohibitions: Retail stores will be allowed to display alcoholic products on their shelves. When the ban takes effect, however, these stores will no longer be allowed to display alcohol at or near the cashier's counter. Instead, product must be stocked on shelves having no greater prominence than other products.
Further, displays of alcohol must not be visible outside the establishment in which alcohol is sold. Consequently, measures must be taken to avoid the alcohol being viewed by the public, such as by installing tinted or frosted windows.
It will be possible, however, to publicly represent alcohol products using colour, provided the brand or logo is not displayed. Therefore, uniforms worn by salespersons in colours associated with a particular brand will be allowed, as will bar decorations, but the brand name or logo must not be used. One example of use of colour without a brand or logo is the Bangkok "Greenspace" beer garden, sponsored by Heineken.
Those business operators seeking to advertise using print or electronic media may do so, but such advertisements may not contain alcohol brand names or logos. In addition, the proposed ban prohibits the use of alcohol-related words such as liquor, brewery and winery.
It is also clear from the draft ban that any person in violation of the ban may be prosecuted without advance warning and subject to punishment of imprisonment of up to three months and/or a fine of 30,000 baht. It is our expectation, however, that actual enforcement will be less aggressive, particularly in the ban's initial phases.
Legal uncertainties: While advertising strategies of alcohol producers are at the forefront of the debate, there has been little effort to adequately explain to other affected business operators how they may safely advertise their alcohol products. For example, it is uncertain whether external advertisements for reduced price drinks will be allowed if they do not refer to specific brands.
The rules are also ambiguous on whether the ban extends to advertisements inside restaurants and bars if they cannot be seen from outside. We expect that such advertising will be permitted, provided that they do not risk observation by those outside the affected businesses. However, restaurants are more likely to face restrictions than bars, since they are also frequented by the non-drinking public, including children.
It also remains to be seen whether the ban will be interpreted as applying to the signage of an establishment if its name includes a word associated with alcohol, such as "Beer," "Spirits" or "Wine," as this is technically descriptive alcohol advertising.
Compliance recommendations: Since the alcohol advertising ban prohibits the use of certain alcohol-related words in commercials, i.e. "liquor", "brewery" and "winery", it is advisable not to use descriptive words in advertisements, regardless of the specific focus of the advertisement. We would also advise removing any liquor advertisements that may be visible by the public outside the establishments. Special consideration should be taken where minors may be exposed to such advertising. It may also be wise to consider changing the name of your establishment if it includes obvious alcohol-related words.
Conclusion: Although the new law was passed in principle by the cabinet, it did advise certain amendments. The advised amendments include a grace period allowing business operators time to plan for and adapt to implementation of the law. Details will become clearer over the coming weeks, but we suggest that specific advertising strategies be discussed with legal counsel to prepare for the inevitable restrictions on advertising, whichever form they may take.
The author are Michael Ramirez, consultant, and Joshua Hauserman, intern, of the Dispute Resolution Department, Tilleke & Gibbins International Ltd.