False Advertising & Corporate Governance

While there is so much focus on good governance, is it not strange that  this never seems to cover the outright lies and exaggerations in their advertising?

Two brand new statutes—the Companies Bill 2012 and an ordinance to amend the SEBI (Securities & Exchange Board of India) Act are supposed to usher in better governance, accountability, transparency and, of course, higher social responsibility among Indian companies. Why is good governance and ethical behaviour only about financial disclosures? Why is it never about the blatantly false and misleading advertising messages that companies beam daily to their largest stakeholder—millions of consumers?

As we go to print, Hindustan Unilever (HUL) is at war with Colgate over a claim that its Pepsodent Germicheck is ‘130% behtar’ than Colgate, when it comes to killing germs. Oh really? Had HUL made such a precise claim about its sales numbers, it would be true, of course. But, when it comes to the products it hawks, it is almost the norm for HUL—as well as the biggest names in the business such as Colgate, P&G, L’Oreal, Garnier, Marico and many others to make preposterous claims about benefits or features that are patently false, unworkable or impossible to prove. Often, these are supported by selective quotes from irrelevant, unreliable or old studies.

Unfair and Unlovely
Actor Nandita Das’s star power has drawn media attention to ‘Dark is Beautiful’. As a member of the complaints committee of the Advertising Standards Council of India (ASCI), I fully support the claim that the advertisements for fairness creams end up corroding the self-worth of people by their pitch that fairness determines a person’s appeal, attractiveness and value in society. What is worse, the promise of fairness is itself false. Women have used Fair & Lovely for almost 30 years; they should have become really fair by now, have they?

None of the fairness products has qualms about throwing fake numbers. Consider Vaseline Fair White Lotion. The advertisement said “4 out of 5 Indian women use Vaseline Healthy White because it makes their skin fair instantly.” Is that credible? How many women have even heard about this product? And, it goes on to claim it will make them ‘instantly fairer’? There is more. The advertisement went on to say, “It has minerals that make the skin 4 times fairer instantly.” Safe to say this is a whopping lie, delivered with a blend of marketing élan and scientific precision!

Funnily, even consumers of HUL and scores of other cosmetic majors, hawking fairness products, do not hold them to their promise. They probably live in hope so long as the creams and lotions smell and feel good, have moisturising properties or take away some tan. Fortnight after fortnight, the complaints committee at ASCI upholds complaints against manufacturers of fairness creams, but they simply drop the particular advertisement and bounce back with another campaign that makes a similar set of false claims.

Unfortunately, there aren’t enough complaints. Maybe Women of Worth (WoW), the group that has launched the campaign, should have a more focused drive to file complaints against advertising that links fairer skins to the ability to attract men or succeed in a job interview. Or publicly challenge companies to prove their claims.

If that weren’t enough to make women insecure, the personal-care industry has begun to create similar insecurities among men too. Wouldn’t good governance advocates and independent directors on these companies be outraged if such claims were made about corporate performance?

In the past few weeks, you wouldn’t have noticed a glowing Sonakshi Sinha gliding across a bright yellow spray of turmeric powder. The product is FEM ‘herbal’ bleach from Dabur touting the ‘goodness of turmeric’.  Well, turmeric has many antiseptic and anti-inflammatory properties and curcumin helps fight cancer cells. But it does not bleach. In fact, there is nothing herbal about FEM, it is a regular bleach and ‘herbal’ is added to the brand name! But by attaching herbal to a brand name and adding a pinch of haldi to the bleach, Dabur has been allowed to launch a variant of bleach, making wildly exaggerated claims.  

Remember Deepika Padukone who liked to prance around recommending a ‘champi’ with Marico’s Parachute hair oil? Well, she has apparently moved up to Parachute Advansed Tender Coconut Hair Oil for her ‘hair massage’—no champi for Deepika anymore. But tender coconut oil? Really? The product is 80% mineral oil (itself a misleading term because the ‘oil’ is usually paraffin) and 20% vegetable oil, of which some portion may be tender coconut oil. Who are they kidding? But then, the product itself passes the low threshold of the Bureau of Indian Standards (BIS) and can claim adherence to the ‘laws of the land’. Incidentally, doctors like Prof BM Hedge tell us that pure, virgin coconut oil provides a slew of amazing benefits which are falsely conveyed by images of oil extracted from bright green, tender coconuts.

Deliberately weak government regulations permit all companies to make false claims and nothing has changed since the 1990s, when HUL was embroiled in controversy over RIN detergent bar claiming the ‘nimbu shakti’ with powerful visuals of lemons, when all it contained was lemon fragrance.

Cosmetics and personal-care products only pick your pocket by holding out hope and promise through perfumed lotions and beautiful advertisements. What about the lies beamed at mothers, persuading them to buy sugar-loaded products packed with synthetic flavours and additives that promise the goodness of ‘real fruit’? Or those claiming to make children smarter, taller and more intelligent, when the only real benefit comes from the milk in which these high-sugar powders are mixed? Often, these advertisements quote dodgy ‘research studies’.

In one massive advertising campaign, GlaxoSmithKline tried to promote Rota virus vaccine by creating a fake fear psychosis among parents and attempting to make it one of the mandatory vaccines for children. In that particular case, it was a doctor who complained; but, in almost every instance involving top MNCs, it is competitors and not consumers, researchers or experts who expose the lies in the advertising message. Generally, all that happens is that complaints are upheld and the advertisement is dropped; often, they cannot be upheld because the companies widely exaggerate generic benefits of certain foods making it hard to label them as outright lies. But, by then, the damage is usually done.

White goods companies are notorious in claiming power saving. Many of them are unable to back the claim when complaints are filed and quietly withdraw or modify the advertisements. Some insert ‘supers’ or clarificatory text at the bottom of the moving picture to technically comply with ASCI rules, knowing full well that viewers rarely focus on static text if the moving image is engrossing enough. Powerful and evocative advertising, carpet-bombed across channels in concentrated bursts, is remembered long after it is withdrawn following complaints.

For the purpose of this article, I am not even talking about many dubious products promising to help you grow hair or lose weight, control blood sugar, cure diabetes, etc, which are beamed in half-hour ‘infomercials’ by hiring well-known actors to anchor and endorse them. Many of those fall squarely under The Drug & Magic Remedies (Objectionable Advertisements) Act or they need to be hauled up by the Food & Drug Authority or the newly formed regulator FSSAI.

Just look at the collective mischief done by listed firms which rank high on any list of well-governed companies and have powerful boards. Do the boards of these companies ever think of the falsehoods peddled daily by their core products? Isn’t this a part of good governance and corporate social responsibility too?

Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at [email protected]

nagesh kini
9 years ago
Sucheta may be it'd be a good idea to have a pan-India inter-disciplinary group comprising the likes of dedicated and enlightened out-of-the-box thinkers to debate and deliberate on deceptive ads - from medical and health field like Dr. BM Hegde, Walther from the Ad World , Law Malcom Bapu, CAs, Cost Accountants and CS like Savithri, bankers, insurers, et al. who have no conflicts of interests.
A. Pereira
9 years ago
Suchetaji, each time I see any advertisement on TV, my blood boils at the lies. Since you are fond of banking space, have you noticed SBI's advertisement claiming to be so low in housing loan instalments that the entire family could go on holidays? Banks, of all, have a greater responsibility to be ethical, else we will face situations faced by global banking around the year 2008.
sivaraman anant narayan
9 years ago
Wonder if class action under the amended Co's Act will enable NGOs to file suits against such misleading ads. One good class action and one stinging court fine, preferably on a big MNC will stem the tide; for awhile atleast! But the best bet in the ultimate analysis would be customer awareness and resistance to such products.
9 years ago
Yes this should be part of CSR. So many advt are false Like "Doodh ka calcium vest nahi hota". Children one day will tell their parents that " you have not given me boost in my chieldhood" now I am not good that studies..... its all your fault.."
Sameer Bahadur
9 years ago
Sad day to note that activist Narendra Dabholkar, who was campaigning for passing an anti-superstition and black magic bill in Maharashtra, was shot dead in Pune today morning. Modern day companies are no better than the old-fashioned crooks, they are just better in using the legal framework to survive.
Sameer, Pune
Rajeev Juneja
9 years ago
Suchetaji: a very good article.

Well all I can say is that each one of us should try and make people near us and around us aware of these gimmicks which these MNCs play. And keep writing collectively to them that we are not jokers who are willing to swallow hook line and sinker what these guys advertise. Perhaps the change may come in slowly.
Mahesh S Bhatt
9 years ago
Well another frauds which advertisements play is prizes which we never know whether they are genuinely given in the Marketing campaign game plan.Win God Coin/Win tickets to Malaysia/Car/Cash back what not...etc are never substanciated but sold vigoursly.In Middle East they use to give an ad with award winners which I have yet to see in India.Oh My Darling Yeh Hai India Yah pe sab chalta hai.

Another thing on quality we follow ISO /Euro/American but our standards are always suspect.Agmark etc are not to be seen.Coke pesticide case was hushed up.Nokia battery blast case was closed mentioning duplicate batteries.

Rgd Mahesh
9 years ago
Excellent article. Well researched a must read for all.
Keep up the good work.
Samir Roy
9 years ago
a good article albeit late in its publication. the ASCI and BIS are slaves of the law of the land that is being abused very much. it is time for consumer courts to rev up their duties and take suo moto action to educate lawyers on such matters to avoid losing generations of Indian people to stupid consumerism.
9 years ago
Bang on.. Off late we are seeing a lot of Pepsondent Vs Colgate. Why can't we sue them in our country? If it was US it we could sue them for millions of $$$
R S Murthy
9 years ago
Because they advertise, we need not buy? If people want to become gullible seeing the actress or cricketers let them be. It is not the fault of the advertisements. People have become lazy and want to use these products instead of age old traditional items. If people stop drinking Boost or Horlicks, what the companies will do. They shut their counters.
Anil Agashe
9 years ago
HUL makes millions by making fools of millions! Users are to be blamed big time for believing ads and using these products. Cultural stupidities that women need to be fair has a big role to play. Regulation is unlikely to help unless products are banned outright and that is not likely to happen.
Ashish Kaul
9 years ago
With multi-brand retail a realty in India we need to have a strong regulatory and governance to direct and govern both BTL and ATL. We need not go far, some of the countries in our neighbourhood like Emirates, Kuwait and KSA have some of the strongest and stringent laws in the world governing products. Even advertisements need approval from ministries besides efficacy certificates proving that the product has what it claims on the label and can actually do what it claims. India has produced some of the best liars in advertising but has the weakest laws in modern trade and FMCG products & services.
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