IAA | Excessive Regulation and the Future of Brands
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Excessive Regulation and the Future of Brands

Introduction

Around the world there has been a sharp increase in the number of extreme restrictions placed on consumer goods – everything from food and drinks to alcoholic beverages and pharmaceutical products. Governments have adopted a nanny-statist approach with a “slippery slope” of regulation now culminating, in a situation where the intellectual property rights of brands are under threat. This document explores examples that demonstrate how this trend is gathering momentum.

Case Studies

‘Sin’ Taxes

Belgium

In January 2016 the Belgian government introduced a sugar tax on soft drinks. The tax, set at €0.068 per litre, applies to all non-alcoholic drinks and water containing added sugar or other sweeteners or flavourings. Since the tax was introduced, proceeds from the levy have tripled to €175 million per year – more than is raised from excise duties on wine. 

United Kingdom

In April 2018 the Soft Drinks Industry Levy came into effect in the UK. Under the terms of the levy, drinks containing 8g of sugar per 100 millilitres are taxed 24p per litre, while those with between 5g and 8g of sugar are taxed 18p per litre. The UK government has claimed that following the announcement of the levy and before its implementation ‘over 50% of manufacturers’ reformulated their drinks.

Alcohol Advertising and Labelling

Lithuania

In Lithuania, there is a blanket ban on all alcohol advertising including billboards, TV, radio, the printed press and the internet. Additionally the sale of alcohol is restricted from 10am to 8pm on weekdays and Saturdays and between 10am to 3pm on Sundays. Print distributors are having to resort to extreme measures to comply with the law including tearing or covering pages out of international publications.

Thailand

In 2015 the Thai government introduced controversial labelling and messaging restrictions for alcohol. The law prohibits any messages which “mislead consumers on the content of products” or use cartoon images. Additionally, labels have a graphic warning label that covers at least one quarter of the label.

South Korea

In November 2018, The South Korean Ministry of Health and Welfare set out a range of measures aimed at curbing the appeal and consumption of alcohol, including a number of restrictions on alcohol advertising. The measures include a blanket ban on alcohol advertisements on various media platforms, including television and radio channels, between 7.00 a.m. and 10.00 p.m. The ban will include any advertisements which include scenes or images of models consuming alcohol or gulping sound effects.


Fast Food Advertising and Labelling

Chile

Thailand

In 2015 the Thai government introduced controversial labelling and messaging restrictions for alcohol. The law prohibits any messages which “mislead consumers on the content of products” or use cartoon images. Additionally, labels have a graphic warning label that covers at least one quarter of the label.

In 2012 the Chilean government introduced a new food labelling law that prevents food companies from advertising to children, placing toys in their products and requires all food producers to remove all child friendly advertising . The law has led to the removal of iconic mascots from packaging, such as Kellogg’s Tony the Tiger; Pringles’ smiling moustache face; and Santa Claus.

United Kingdom

From February 2019 Transport for London (TfL) introduced new regulations banning advertisements for ‘junk food’ across London’s transport network. Three quarters of TfL’s own ‘cultural maps’ introduced in early-2019 were subsequently found to ‘promote obesity’ and had to be changed at a total cost to the taxpayer of £16,155.


Potential Regulations

United Kingdom

In May 2018 the UK Parliament’s Health Committee called for a ban on the use of cartoon characters or TV and film characters to promote high fat, salt and sugar (HFSS) products and to remove them from the ends of aisles and checkouts. The Institute for Public Policy Research (IPPR) has called for all confectionary, crisps and sugary drinks to tobacco-style have plain packaging.  In October 2019 the UK’s chief medical officer published a report calling for a ban on eating and drinking on public transport; bans on promoting and advertising fast food; and increased tax on HFSS products.  

International

An international group of doctors from The World Hypertension League are calling for urgent action to tackle excess salt consumption through tobacco style health warnings on salt shakers.


Conclusion and outlook

The proliferation of excessive regulation brings with it an increasing threat to the brand owners, intellectual property (IP) and creative industry. The implications of this are enormous. To arrest the trend of an increasingly excessive regulatory approach, brand owners and creative sector have a key role to play in defending brands and IP by actively participating in the policymaking process. It is incumbent upon businesses and creative industry to work with government to achieve practical solutions which educate consumers and enable them to make informed choices.


This requires a concerted and coordinated effort. The brands owners and creative industries should work proactively with government to shape regulations that would protect brands and freedom of consumers’ choices.


 


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