What marketers can expect from lawmakers in 2011

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With 2011 almost upon us, Marketing Week flags up the consultations, regulatory changes, voluntary agreements, white papers and law changes marketers need to look out for in the new year.

Advertising Regulation

What: The Committee of Advertising Practice’s code for non-broadcast advertising will be extended to companies’ marketing communications online.

When: 1 March.

Why it matters: Websites will have to comply with rules on misleading adverts and social responsibility, as well as codes governing the protection of children. Sanctions include the removal, with the agreement of search engines, of ads that link to the page hosting the non-compliant marketing communication.

What: The Department for Education has asked Mothers’ Union to carry out a review into the “commercialisation and sexualisation” of children.

When: The review commenced earlier this month. Mothers’ Union will deliver its recommendations in May 2011.

Why it matters: Prime Minister David Cameron is committed to ending “irresponsible” marketing to children. The review will cover existing regulation, self-regulation and codes of regulation.

Food and drink

What: The Government’s “Responsibility Deal” with the food and drink industry. A public/private agreement on the approach to food, alcohol, physical activity and behaviour change from discussions between minsters, charities and companies including Unilever, Diageo, PepsiCo and the Advertising Association.

When: Details of the deal are expected in the first quarter.

Why it matters: Agreements on the further reformulation of food to reduce salt, better information for consumers about food, and socially responsible retail marketing are expected.

Retail

What: VAT will increase from 17.5% to 20%.

When: 4 January.

Why it matters: The possibility of a rise in prices at point of sale could depress demand for products and services.

What: The Office of Fair Trading has vowed to “”actively monitor” price promotions with “targeted action” promised after a report found evidence of misleading practice.

When: Ongoing.

Why it matters: Brands could be forced to change strategies and even face fines if they are found guilty of misleading the public.

Alcohol

What: Duty on beers with an ABV above 7.5% will be subject to an additional duty, while duty on beers with a 2.8% ABV or below will be reduced.

When: Further details are expected in the Chancellor’s spring budget.

Why it matters: The Government hopes that by raising duty on “super strength” lagers, demand will be suppressed. Conversely, it is hoped that sales of cheaper low and no alcohol beers will improve.

What: A ban on below cost selling. The result of a joint consultation between HM Treasury and the Home Office earlier this year will define and prohibit the sale of below cost alcohol, with a price below the cost of duty plus VAT definition favoured by some.

When: A law change is expected in the Autumn.

Why it matters: Ending “deep discounting” is a key public health initiative for the Government. Curbing retailers’ ability to sell alcohol as cheaply as they have been will impact their and marketers’ pricing strategies.

Utilities

What: Energy watchdog Ofgem is reviewing energy suppliers’ pricing strategies after finding that recent hikes by three of the six biggest suppliers bolstered profit margins by 38%.

When: The review will be complete in March.

Why it matters: A negative report by Ofgem would worsen the already negative perception the public has of energy suppliers. Companies could also be forced to absorb increasing wholesale prices.

What: The Postal Services Bill, which contains proposals to privatise the Royal Mail.

When: The Bill is passing through Parliament with amendments likely. It is unclear when it will pass into law.

Why it matters: The Government argues that an injection of private capital is essential to allow Royal Mail to survive and compete. A private or part-private Royal Mail would see increased competition in the postal services sector and could lead to cheaper direct mail services and increased options for marketers.

Tobacco

What: The Government is currently considering the introduction of plain packaging for cigarettes, while options to further restrict the display of tobacco on shops are also being considered. The sale of tobacco in vending machines is also to be banned.

When: The Department of Health’s “tobacco control plan” is expected early in the new year and will outline thinking on packaging and display. The vending machine ban will be effective from 1 October.

Why it matters: Restrictions on the packaging, sale and distribution of cigarettes will further restrict the already limited marketing options available to tobacco companies.

Media

What: The House of Lords Communications Committee has launched an inquiry into the regulation of television advertising covering how ITV sells its on-air advertising, known as Contract Rights Renewal (CRR).

When: The Committee is expected to recommend changes in the first quarter.

Why it matters: The Committee is investigating the implications of removing or reducing CRR and whether the current level of television regulation is sufficient. Any recommendation to scrap CRR could persuade the Government to change the rules, something ITV argues is essential to future revenue generation.

What: Ofcom is assessing whether NewsCorp’s bid to buy the 61% of BSkyB it does not already own will adversely affect media plurality.

When: A recommendation will be handed to Culture, media and sport secretary early this year.

Why it matters: Rivals are concerned that NewsCorp, which already owns UK newspapers The Times, The Sunday Times, The News of the World and The Sun, would become too dominant in the marketplace, particularly in the advertising market.

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