Major changes are looming before Ukrainian media and marketing business, as Ukrainian parliament is considering a ban on advertising of alcohol, tobacco and pharmaceuticals. Current ruling parliamentary coalition in its formation agreement concluded on 21 November 2014 (the "Coalition Agreement") has foreseen future prohibition of advertising of pharmaceuticals, tobacco and alcoholic beverages. It should be noted, that Coalition Agreement is a framework agreement between political parties that stipulates course of actions, which they have agreed to follow.
1. Advertising of pharmaceuticals
Section 4.4. of the Coalition Agreement states that execution of rational policies regarding pharmaceuticals on macro- and micro-levels requires ban on their advertising. If enacted strictly, this will be one of the heaviest blows on pharmaceutical marketing in Ukraine, as, in general, advertising of medicinal products is already heavily regulated, as well as direct to consumer advertising of prescription drugs is restricted.
The aforementioned ban has caused widespread disturbance among Ukrainian media and advertisers. Several influential executives of Ukrainian mass media, TV channels and industry trade groups have spoken against such ban, as, according to their estimations, market share of pharmaceutical advertising is ranging from 15 up to 27 percent and brings from 15 up to 40 percent of income to the mass media in Ukraine and further restrictions will adversely affect the advertising market.
2. Advertising of tobacco and alcoholic beverages
Prohibition of tobacco and alcoholic beverages advertising for the purpose of promotion of healthy lifestyle is stipulated in Section 5.1. of the Coalition Agreement.
It is worth noting, that the prolific beer advertising market can be affected as well. Law of Ukraine "On Amendments to The Tax Code of Ukraine and Some Other Legislative Acts Concerning Tax Reform" dated 28 December 2014 changes the legal status of beer to alcohol beverage. As the consequence, beers with alcohol volume of 0.5 per cent and higher will be considered as such. The aforementioned amendments will come into force on 1 July 2015.
As for the ban on advertising of pharmaceuticals, the Measure Plan of the Ministry of Health of Ukraine "On Implementation of the Action Plan of Cabinet of Ministers of Ukraine and Coalition Agreement in 2015" (the "Measure Plan") stipulates creation of the working group on amendment of Ukrainian advertising laws, in particular, laws regarding advertising of pharmaceuticals, in the first quarter of 2015.
Although the abovementioned initiative has already met significant resistance from media business, there is a viewpoint that some Ukrainian pharmaceutical companies could benefit from such a situation. As a result its implementation will depend on the outcome of public discussions and confrontation of lobbying groups.
Prohibition of tobacco and alcoholic beverages advertising can be enacted in the course of the program "Healthcare-2020," and the National Action Plan on its implementation will be drafted in the first quarter of 2015, according to the Measure Plan.
As the consequence, there is no solid date of implementation of aforementioned prohibitions, and some degree of uncertainty regarding the possibility and the time of their enactment exists.
Originally published by GALA Gazette.
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