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12 September 2018

National council announces recommendations on TV and radio sponsorship rules for alcohol brands

In this legal alert, we look at the regulator’s recent recommendations on TV and radio sponsorship regarding the use of trademarks that define an alcohol brand’s identity.

Background

Alcohol advertising is heavily regulated in Ukraine. Save for very few exemptions, most of provisions of the Ukrainian Advertising Law (“Ads Law“) applicable to advertising of alcoholic beverages/trademarks are of a prohibitive nature and do not contain express permission(s) allowing particular advertising and promotions activities.

One of the exemptions for the alcohol industry is sponsorship. In particular, in TV and radio broadcasting, materials of other mass media, shows and other pieces of entertainment created and held with sponsor participation, it shall be prohibited to submit any information of a promotional nature about the sponsor and/or its products except for its name or denomination and trademark for goods and/or services. In addition, for sponsoring TV shows it is generally permitted to feature the name / trade name / trademark of an alcoholic beverages producer (sponsor), but with no sound or voice-over.

Beginning in 2007 or so, the discussed exemption on the denomination of alcohol related trademark(s) within sponsorship (“Exemption“) is interpreted in a quite enlarged legal sense. In particular, in case all key frames of an advertising spot regarding an alcoholic beverage is trademarked or at least trademark applications were filed for the same frames, then it is sufficient to apply the Exemption and thus place the whole advertising spot as is (be it 1-3 seconds or 30+ seconds) within the sponsorship framework. An additional bonus of this interpretation for sponsors is that, as long as it is placed within sponsorship, there is no need to comply with heavy restrictions stipulated by Article 22 of the Ads Law for the advertising of alcoholic beverages, including placing the standard warning “SIGNIFICANT CONSUMPTION OF ALCOHOL IS DANGEROUS FOR YOUR HEALTH”.

Amid low enforcement activity by the authorities, the described interpretation proliferated and further extended to other categories of goods including, for example, over-the-counter medicines and medical devices.

Recommendations

On 31 August 2018, the National Television and Radio Broadcasting Council of Ukraine (“Council“) – whose authority covers the enforcement of advertising laws when it comes to television and radio broadcasting companies – issued Recommendations on Sponsorship with the Use of Trademarks which are Used to Define an Alcohol Brand’s Identity (“Recommendations“). The issued Recommendations can significantly influence the further practice of applying the Exemption, provide more discipline when applying the Exemption, and diminish the described practice of the enlarged interpretation of the existing Exemption.

According to the Recommendations, information about trademarks, which define the alcohol brand’s identity (“Trademark Information”) and which appear in the sponsorship context in TV and radio broadcasts, should comply with the following requirements:

1. Trademark Information should not be identical to advertising spots with respect to alcoholic beverages featuring the same trademark(s), namely, it should not be the same as footage featured in the advertising.

2. Trademark Information, irrespective of whether it relates to registered trademarks or filed trademark applications, should not contain statements or images which are used solely in connection with alcoholic beverages, namely:

(i)    the use of generic names of alcoholic beverages (vodka, wine, champagne, etc.) and/or feature the packaging of alcoholic beverages (be it with label or without) in full or partially in the audio and/or video sequences and/or the video’s closing caption;

(ii)   full or partial presenting or featuring the technological process of production of alcoholic beverages, as well as equipment that is used for such production (cleaning methods, conditioning period, fermentation casks, butts, etc.);

(iii)  featuring the process of alcohol consumption, as well as tools for consumption (glasses, corkscrews etc.), sound imitation of the opening the bottles, pouring and clinking;

(iv)  presenting or featuring the organoleptic properties of alcoholic beverages, namely, taste, smell, and strength.

3. Trademark Information should not encourage the consumption of alcoholic beverages and should not contain the words “try”, “drink”, “taste”, as well as toasts such as “Cheers!”, “Here’s to…!”, etc.

4. Trademark Information should not:

(i) contain names as well as pseudonymous of celebrities or direct or indirect endorsement of alcohol consumption by celebrities;

(ii)   contain statements that alcohol has curative qualities or can be a stimulator or a depressant;

(iii)  encourage alcohol consumption or discourage refraining from alcohol consumption;

(iv)  contain statements that alcohol consumption has no negative impact on health and/or physical conditions;

(v)  create the impression that most people consume alcoholic beverages;

(vi)  encourage excessive alcohol consumption or represent abstinence or moderation with regard to alcohol consumption negatively;

 (vii)  create the impression that alcohol consumption contributes to success in sport, society, sexual activities or other spheres of living.

The Recommendations set out that it is the obligation of any TV and broadcasting organization to verify whether the trademarks of the sponsor comply with the Recommendations. If the trademarks of the sponsor do not comply with the Recommendations, the TV and broadcasting organization must refuse to accept such trademark(s) for broadcast.

It is expected that the Recommendations will enter into force on 01 October 2018.

For more information, please contact Oleksandr Padalka or Oleg Klymchuk.

Information contained in this legal alert is for general information purposes only. It does not constitute legal or other professional advice and should not serve as a substitute for specific professional advice tailored to particular circumstances.

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