28 November, 2015
On January 22, 2015, the Notification of the Alcoholic Beverages Control, Re: Rules, Procedures, and Conditions for Labels of Alcoholic Beverages was published in the Royal Thai Government Gazette. It sets out controversial labeling and message restrictions for alcoholic beverages that could result in major losses for the alcohol industry. The Notification has been challenged before Thailand’s Administrative Court, but pending the outcome of that case, it has come into effect on April 22, 2015.
The basis of the Notification is the Alcoholic Beverage Control Act (2008) and its subsequent Ministerial Regula- tion (2010), under which alcoholic beverages cannot be advertised in any way which boasts of efficacies, benefits, or qualities, or induces one to drink.
In January 2014, the Ministry of Public Health (MoPH) notified the WTO Committee on Sanitary and Phytosani- tary Measures of proposed labeling requirements for alcoholic beverages. The draft Notification prohibited use of various types of messages on alcoholic beverage labels and packages, including any message “which misleads consum- ers on the content of products” and any message “using the picture of a cartoon.”
The MoPH issued a revised draft Notification in August 2014. This draft Notification combined the labeling restric- tions with measures mandating graphic health warnings on alcoholic beverage packaging. Thailand would be the first country in the world to do so. It had earlier introduced the concept of graphic health warnings on alcoholic beverage packaging in 2010, but this was notified to the WTO Tech- nical Barriers to Trade Committee in 2010 and the issue went silent.
In December 2014, the MoPH signed the final version of the Notification without the graphic health warning provi- sions, but with revised versions of the labeling and message restrictions, including prohibitions on “a message which materially misleads consumers on the content of products” and “a message using cartoon images, except images which are trademarks of alcoholic beverages which have been legitimately registered prior to enforcement of this Notifi- cation.”
Alcoholic beverages have long been branded and marketed with labels, containers, and packaging containing important messages depicted graphically which have been registered as trademarks and/or service marks. The Minis- try will likely argue that many such future trademarks unregistered before April 22, 2015, violate the requirements in the Notification, and therefore operators would be prohibited from displaying such trademarks on their prod- ucts in Thailand. This would disallow rights holders to use
their trademarks in accordance with their registration and would put those marks at risk of cancellation based on non-use.
With the Notification now in effect, the MoPH appears to be moving once more toward the reintroduction of requirements for graphic health warnings on alcoholic beverage packaging. The MoPH has now twice, in 2010 and 2014, proposed the introduction of graphic health warnings akin to those already in place for tobacco products.
In a novel move, the MoPH has launched a public competition to design new graphic health warnings for alcoholic beverage packaging. The competition requires that entries:
- may use any graphic design technique, including paint- ing, photography, etc.;
- must warn the public of the harms and consequences of alcoholic beverage consumption;
- must aim to deter children, teenagers, and the public to refrain from consuming alcoholic beverages;
- must contain “warning phases;” and
- must comply with all relevant IP laws and must be new and not previously submitted in any other contest or published in any magazine, website, etc.
Contest participants must agree to transfer all IP rights related to the submission to the Thai Alcohol Control Com- mittee. Prizes are on offer to the winning designs of THB 2,000 to THB 50,000 (approximately USD 56 to USD 1,398), and the deadline to submit was August 31, 2015. The MoPH’s competition is a clear attempt to drum up support for the imposition of graphic health warnings and raise significant awareness of the issue.
However, the delegation of this part of the regulatory process to the general public is bound to call into question whether any resultant notification or regulation is based upon internationally-recognized principles of evidence-based policymaking, and can therefore be demonstrated to be an effective and proportionate measure to tackle genuine public health and social harms associated with alcoholic beverages.
The blanket imposition of large graphic health warnings on all alcoholic beverage products is also likely to meet opposition from alcoholic beverage manufacturers and importers on the basis that it unreasonably restricts their right to use their lawfully-registered trademarks to market their legal products to adult consumers.
In addition, there has recently been a crackdown on celebrity endorsements—Thai celebrities have endorsed certain alcoholic beverages by uploading photos of them consuming and complimenting the products via social media. The Thai Alcohol Control Committee has summoned several celebrities, taken statements, and moved to conduct further investigations into whether the photos are merely coincidental or part of a planned product endorsement scheme, which could result in criminal sanctions for both the celebrities and the beer companies.
Ministerial Notifications are subject to legal challenge in Thailand’s Administrative Court, which has the power to overturn or amend unlawful acts by administrative agencies or state officials. Upon application, the Court may issue an injunctive order suspending execution of the measure pending the outcome of the legal challenge. Therefore, the controversial labeling and message restrictions for alcoholic beverages could be challenged.
For further information, please contact:
Alan Adcock, Partner, Tilleke & Gibbins
alan.a@tilleke.com
