Cola Ads, the Next Target
Financial Express
August 11, 2006

NEW DELHI, AUG 10: The government is deliberating a ban on soft drinks advertisement. Replying to supplementaries in the Rajya Sabha on the cola issue, health minister Anbumani Ramadoss said, "We are talking to the information and broadcasting ministry, on whether there is a provision on banning advertisements of soft drinks." At present, advertising products like liquor, cigarettes and prescription drugs is banned.

If cola ads are banned, it will seriously hamper Pepsi and Coca Cola, whose sales have dipped significantly. The pesticides controversy has hit the companies at a time when the summer season is over. It is primarily advertising and marketing which drives sales this part of the year. For the advertisement industry though, the ban may not mean much. Coca Cola and Pepsi chip in just about Rs 100-150 crore a year to the Rs 15,940 crore ad business.

When contacted, the CEO of an ad firm handling a cola account, said, "This is almost like equating colas with liquor and tobacco." As things stand now, cola ad spends were expected go down with the two companies wanting to lie low after the controversy, a senior ad executive added.

Since the controversy erupted, Coke and Pepsi have been on a media blitzkrieg explaining their adherence to global standards. The move to ban ads could take the fizz out of cola sales that have dipped close to 60% in some areas.

The minister also said the government was working on a standard formula for testing pesticide content in beverages. It has appointed a four-man committee under ICMR chairman NK Ganguly to advise the Central Committee for Food Standards. This committee was likely submit its report in two weeks. Currently, the BIS standards for carbonated beverages are voluntary.

Ramadoss said states could undertake independent testing for pesticide residue in soft drinks. Several states including Karnataka and Kerala have clamped down on cola sales.

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