Surrogate Advertising

Why in News?

Maharashtra's Food and Drug Administration (FDA) issued show-cause notices to actors Shah Rukh Khan, Ajay Devgn and Tiger Shroff over their endorsement of Vimal Elaichi.
The FDA is examining whether the advertisement amounts to surrogate advertising for Vimal Pan Masala, whose tobacco/nicotine-containing variants are prohibited in Maharashtra.
This is reportedly the first instance of the Maharashtra FDA examining a case specifically from the perspective of surrogate advertising.

Surrogate advertising promotes a prohibited or restricted product indirectly through another permitted product carrying a similar brand name, logo, packaging or visual identity.
It is commonly associated with products such as tobacco, pan masala and alcohol that face advertising restrictions.
The objective is to maintain the prohibited product's brand visibility among consumers despite restrictions on its direct advertising.
Maharashtra has prohibited gutkha and pan masala containing tobacco or nicotine since 2012 under Section 30(2)(a) of the Food Safety and Standards Act, 2006. The prohibition is renewed annually.
The FDA has invoked:

Section 24 of the FSS Act, which restricts misleading or deceptive food advertisements.
Section 53, which provides a penalty of up to ₹10 lakh for anyone party to the publication of a misleading advertisement.
Food Safety and Standards (Advertising and Claims) Regulations, 2018.

Under Section 10 of the Consumer Protection Act, 2019, the Central Consumer Protection Authority (CCPA) was established to deal with consumer protection and misleading advertisements.
Section 2(28) of the Consumer Protection Act defines a misleading advertisement to include false descriptions or guarantees, unfair trade-practice implications or concealment of material information.
The CCPA's 2022 guidelines specifically recognise surrogate advertising as advertising a permitted product to indirectly promote a prohibited product.

The actors have been given 15 days to submit written explanations.
They have been asked to discontinue participation in the advertisement and remove it from their social-media handles.
They must provide endorsement contracts, campaign briefs, product information and payment details.
They must disclose the due diligence conducted before endorsing the product and establish whether Vimal Elaichi is independently marketed or functions as a brand extension of Vimal Pan Masala.
They must also disclose any material connection with the advertiser or brand owner as required under the CCPA Guidelines, 2022.
Under Section 21 of the Consumer Protection Act, 2019:

First violation: penalty up to ₹10 lakh.
Subsequent violations: penalty up to ₹50 lakh.
Endorsers can be prohibited from making endorsements for up to 1 year for a first violation and up to 3 years for subsequent violations.

In 2018, the Directorate General of Health Services issued show-cause notices to Vishnu Pouch Packaging Pvt Ltd, alleging indirect tobacco advertising.
In January 2024, the Delhi High Court dismissed the DGHS appeals and allowed the company to advertise its tobacco-free product, observing that businesses have a fundamental right to carry on lawful business involving tobacco-free pan masala.
The Vimal Elaichi case highlights the difficulty of distinguishing genuine advertising of a permitted product from indirect promotion of a prohibited product.
It also raises the issue of celebrity accountability and due diligence before endorsing products whose branding may be associated with prohibited goods.