Advertising industry wary of new CAA ruling

The country’s advertising industry is wary about the practicality of the new rule issued by the Consumer Affairs Authority (CAA) that all advertisements should carry prices of products and services.

By Shezna Shums



Some of the business and advertising leaders mentioned to the Daily FT that they are currently having discussions on how to address this issue and whether fresh representations should be made to the Ministry of Co-operatives and Internal Trade under whose purview comes the CAA.

Chairman, CAA, Rumy Marzook emphasised that all advertisements in the newspapers, TV or radio and others with effect from 1 February have to communicate the retail price of the product they are selling.

“This is to benefit the consumers, because if the price is not mentioned in the advertisement the consumer will either have to go to the shop or telephone the shop to find out the prices of the items to be sold, this increases their expenses. This step was taken in order to save such expenses,” explained Marzook.

He also stated that implementation of this will take place next month and by the following weeks all advertisements will have to carry the retail price of the item advertised for sale.

However International Advertising Association (IAA) Sri Lanka President Renuka Marshall told the Daily FT that this decision is good in principle, but it may seem impractical.

The difficulty of implementing this gazette notification will be largely seen in the electronic, TV and radio commercials she said, adding that this will make it difficult when it comes to price changes because it may require a re-production of the electronic commercials. “This will increase costs,” she said.

Explaining that “even in the case of the print medium carrying the retail price of the items may change the look of the advertisement and give it a ‘catalog feel’.”

While in the case of some products and services that vary according to consumer requests the prices too may vary and this would cause problems where advertising is concerned.

Marshall added that leaders in the industry are presently holding discussions to check how they are going to handle this new notification.

Accredited Advertising Agencies Association (4As) President Keith Wijesuriya said that as a rule previous press advertisements do convey the prices of items on sale.

But he did point out several issues that will follow this decision especially the additional cost of re producing the currently aired commercials to now include the cost of the product.

Another concern is on how to adjust the radio commercials as this type of advertisement is paid by the ‘air time’, and to readjust the commercial within the specific air time will be a problem.

In the case of the TV advertisement, Wijesuriya said that a flash at the end may be added to include the price of the product, however continues to emphasise that no proper conclusion has been thought of regarding the radio advertisements.

“This issue can be overcome and for the future advertisements, we can take this notification into consideration during the creative work of the advertisement, but with regard to the present advertisements, we will have to go back to the production stages to change them to include this factor,” he said.

He highlighted that the specifications be given in detail, regarding this new notification whether a minimum price range can be given when it is an advertisement of a range of similar products in size or the same product in different quantities advertised in the same advertisement.

The Sri Lanka Institute of Marketing, President, Rohan Somawansa applauds this decision but says that although this is a good move there may be problems in its implementation.

“From the consumer’s point of view, this decision is good as the person can see the retail price in the advertisement and then, if their disposable income allows it, they may carry out the purchase,” he explained.

However, he too added that there may be some practical problems in implementing this decision.

He added that in marketing the four main components are the product, price, communication and distribution.

What the Gazzette says

As per the Gazette Notification the Consumer Affairs Authority acting under section 10(1)  of the Consumer Affairs Authority Act, do hereby direct that all manufactures, importers, distributors and traders in every advertisement in respect of the sale of any article or articles published in newspapers, films, television, video, audio, internet or any other print, electric or electronic media shall specifically mention the retail price of such article or articles for sale in such advertisement.

If different models, sizes, types or grades of any article are specified in such advertisement every such manufactures, importers, distributors and traders should specify the retail price of each such model, size, type or grade of any such article specified in such advertisement.