The Ukrainian parliament plans to ban alcohol and tobacco advertising as part of a wide ranging reform that could half growth in the country's advertising market next year. In a new bill still to go to vote, parliament proposes a complete ban on tobacco and alcohol advertising across all media and the abolition of any form of advertising in cinemas. Tobacco advertising is already banned on TV and radio and a number of other restrictions apply to the sector including:
- Alcohol advertising can only be broadcast from 11pm to 6am.
- Neither alcohol or tobacco advertising are permitted on front and back pages of print media, inside print media directed at persons under the age of 18, or indoors and on transport media.
- Tobacco and alcohol advertisements must not contain images of consumption, cannot depict persons under 18 and must include a health warning.
- This health warning must cover at least 15 per cent total surface used. Exterior advertising of alcohol and tobacco must not be placed within 300m from schools.
The big threat to industy growth here comes from changes to the rules around alcohol and tobacco, not cinema. Although the ban of cinema advertising is the most comprehensive restriction in the bill, its impacts on the overall advertising industry will be negligible. The cinema share of the total net advertising market was 0.44 per cent in 2012.
In contrast, alcohol advertising is one of the key advertising sectors in the Ukraine. This is despite the already heavy restrictions. In 2011, alcohol was the fourth largest product category for Ukrainian advertising in terms of spend. Gross advertising spend on alcohol grew 51 per cent year-on-year to UAH538m ($66m). Although tobacco is not in the top 10 of advertising spend categories, it is important outside broadcast media.
On the assumptin that the law will come into force on 1 January 2014, we expect a material impact on Ukrainian net advertising. Without the regulatory changes, we forecast the market will grow by 11.7 per cent. Should the law come into force in its current form, our analysis of advertising sector spend suggests that Ukrainian advertising growth would slow down to 6.3 per cent in 2014.