Courts new battleground for FMCG companies

Written by Surabhi Agarwal | New Delhi, Jul 30 | Updated: Jul 31 2008, 06:04am hrs
Are FMCG majors spending more time battling their rivals in the courtroom than on the real battleground Rising number of disputes related to FMCG advertisements, taken either to courts or industry watchdog Asci (Advertising Standards Council of India), point towards this trend. Out of the total complaints that Asci upheld between January and March 2008, 25% were related to FMCG.

In fact, in the last six months intra-industry complaints (by rivals) has increased said Alan Collaco, secretary general, Asci. While the chunk of the complaints comes from consumers, 10-12% are intra-industry. "There has been a marginal increase in such cases. It's a big bad world and rivals scrutinise each other's ads very carefully. Every loophole is taken advantage of," he said.

For instance, Hindustan Unilever Ltd's (HUL) list of ad-related disputes has recorded five instances so far this year. While one case was filed last year, four other ads have been objected to by its rivals P&G, Reckitt Benckiser, etc in 2008. The FMCG giant was also slapped a penalty of Rs 5 lakh over a claim by Reckitt Benckiser that HUL had demeaned Dettol in its ad of Lifebuoy.

Cases on HUL products -- Knorr and Domex were also filed by Nestle (Maggi) and Reckitt (Harpic). While the final hearing on the first is yet to happen, the claim on the other was rejected.

P&G also dragged ads of -- Fair and Lovely and Pond's Flawless White to Asci, both HUL products. A decision on these cases is due in August. On being asked why HUL is repeatedly attracting controversies, a company spokesperson said, "We have well established internal processes to rigorously examine and test all the claims being made. Many times the creative execution (advertisement) of the claims and benefits are the subject matter of the challenge and not the claim itself." According to industry sources HUL itself has filed three cases against P&G, Reckitt and Anchor.

R Balakrishnan, chairman, Lowe (one of the two agencies that handles HUL products) said that this is a battle and showing a competitor's products without being too obvious is fair as it helps drawing a comparison. "Abroad, comparisons between rivals are allowed in ads. However, in India they are back in fashion as ads tend to be more focused on value additions these days," said Priti Nair, an ex-Lowe hand who has worked on several HUL brands.

The fact is that a lot of FMCG advertising works on claims, which if unsubstantiated make the basis of a complaint by a consumer or a rival. "HUL tends to behave like a big bully, so all players are affected by its moves. It is also the biggest advertiser on Indian television, that explains a lot," said MG Parameswaran, executive director, Draftfcb Ulka.