I will not comment on this latest article in Advertising Age, just copy-paste it as is:
Beer-Ad Ban Hits Russia as Nation Boosts Sobriety
With Most Public Spaces Off-Limits in Crackdown, Brewers and Agencies Plot Digital-Marketing Strategies
Although Russia’s identity will always be linked to vodka, it is also the world’s fourth-largest beer market, thanks to an influx of global brewers and a culture in which beer is often drunk on the street like soda.
But marketers must now deal with hurdles resulting from a tough new law aimed at curtailing alcohol abuse. Starting in July, beer ads will be prohibited on television. And as of 2013, beer cannot be sold in Russian airports, bus stops, railway stations and certain other public places.
Russian beer brands
The pending TV ban has created a short-term ad boom as marketers flood the airwaves in one last push to build brand awareness, according to industry insiders.
At the same time, brewers and their agencies are plotting longer- term moves to digital advertising, which will still be allowed. (Print ads will also be permitted, although current law bans alcohol ads on the first and last pages of newspapers and magazines.)
“Advertising agencies understand that a new era has come and that this is our future,” Olga Tsoukanova, managing director for Lowe Adventa, Moscow, said in an email interview. The agency oversees several brands owned by Sun InBev, the Russian unit of Anheuser-Busch InBev.
Alcohol abuse is a longtime problem in Russia, where more than half of all deaths of people aged 15 to 54 are caused by alcohol, according to international medical journal The Lancet.
The latest crackdown is a priority for President Dmitry Medvedev, who signed the law last July as part of an initiative to cut annual per-capita alcohol consumption from 18 liters to five to eight liters by 2020.
Mr. Medvedev is so closely identified with his anti-booze policies that his supporters have made it a rallying cry.
For instance, in an event staged in a square in central Moscow last August, two leggy women calling themselves the “Medvedev Girls” urged men to dump their beers in a bucket, according to published reports. The two stripped down to bikinis, drawing hordes of photographers and priceless press coverage. (Mr. Medvedev, who hopes to switch roles with ally Prime Minister Vladimir Putin in the March election, has bigger fish to fry as protesters claim that the recent parliamentary elections were fraudulent.)
In the meantime, marketers — more accustomed to using sexy women to sell beer rather than discard it — say the law is misguided.
As binge drinking becomes a bigger problem worldwide, “the discussion around alcohol … abuse is a perfectly legitimate one to have,” said Stephan Loerke, managing director of the World Federation of Advertisers, whose members include AB InBev, SABMiller and Heineken. But “we all know through past experience that alcohol-advertising bans just don’t deliver.”
Mr. Loerke pointed to France, which banned alcohol ads on TV in 1991. The law remains in place, despite a government report in 1999 that found it ineffective in reducing high-risk drinking patterns, according to a WFA translation of the report.
A French anti-alcoholism group, APNAA, said in a 2004 report that “the effectiveness of advertising on sales and consumption [is] weak.” But the group supports the ban as part of overall prevention efforts, noting the law “has been efficient in correcting excesses in the form and content of advertising messages.”
In Russia, beer will lose its classification as a “foodstuff.” That had allowed brewers more marketing freedom than spirits producers, who have for years been banned from advertising on TV, except on pay channels. (The new law forbids any alcohol advertising on pay channels.)
Beer’s privileged status made it widely available, fostering what Euromonitor Russian analyst Vladislav Savinov has described as an “on-the-go beer-consumption culture.” That attitude undoubtedly helped to spur growth and attract international brewers to the country, which in the Soviet era was dominated by a state-controlled beer brand.
Russian beer sales grew fourfold between 1997 and 2007, according to Euromonitor. Volume declined in 2010, a result of the excise tax’s tripling in 2009, Mr. Savinov said.
Opinions are mixed on how the law will affect the market. Denmark-based Carlsberg would seem to have the most to lose as the top player in Russia, with 36.6% of the market; its Baltika is the country’s No. 1 beer brand, with a nearly 16% share, according to Euromonitor. AB InBev is the No. 2 brewer, with almost 15% of the market across its brands.
AB InBev has bet big on Russia, launching Budweiser there in 2010 and recently signing on as official beer sponsor for the 2018 FIFA World Cup, which the country will host. While existing law bans beer advertising and sales in Russian stadiums, the brewer and FIFA hope to get an exemption.
If the stadium ad ban is not lifted, AB InBev is prepared to use “alternative channels of communication, i.e. digital and PR channels,” Sun InBev spokeswoman Natalya Leonova said in an email.
According to some observers, the TV-ad ban will give major players an advantage over new ones, letting established brands essentially lock in market share, as the ads are required to build brand awareness.
The restrictions “will not have a negative impact on the beer market size, because [advertising] does not increase beer consumption in Russia” but rather “forms consumers’ loyalty to the brands,” Mr. Savinov said.
TV’s power is already diminished as a result of restrictions on using people or animals in ads, which forces marketers to rely more on symbolism and music. Beer ads are also not allowed before 10 p.m., which has created a second prime time, “beer prime time,” with “hundreds of strange, people-less beer ads,” said Alexander Yendovin, digital director for Optimum Media’s OMD Group, Moscow.
Point-of-sale marketing will become critical when TV ads disappear in July, Russian marketing experts agree. “There will be wars for place on the shelves, especially in the value segment,” said Ms. Tsoukanova at Lowe Adventa.
Most digital ads will be aimed at awareness, including those on brewer-run sites, Vladimir Tkachev, chairman-CEO of Leo Burnett Eastern Europe, Moscow—Baltika’s agency—said in an email. “We also believe that social media will start to play a significant role in beer advertising.”
But marketers face obstacles online as well, because Russia’s most popular social site, Vkontakte, does not accept beer ads. Facebook, which has far less penetration, will be used but “can only work as an image driver for the opinion leaders for premium brands,” Mr. Tkachev said.