The APEC (Asia-Pacific Economic Cooperation) Policy Support unit recently published a groundbreaking report on ‘Voluntary Standards and Regulatory Approaches in Advertising in APEC Economies’. The report is the first assessment of the state of advertising regulations in APEC economies and lays the basis for future development of best practice advertising regulation. It also recognises that advertising is an important driver of economic growth, both in terms of the products and services being marketed and the advertising sector itself.

The report is significant for the food and beverage industry in Asia, whose products are amongst the most heavily regulated. FIA has long demonstrated its commitment to working on multi-sector platforms to ensure the adoption of a responsible approach to advertising and marketing of food and beverage products to children throughout Asia.

The APEC report is likely to guide the reform of advertising regulation in the Asia-Pacific region. Six of the top 10 contributors to global adspend growth between 2013 and 2016 will be APEC economies (USA, China, Indonesia, Japan, Korea and Russia). The report predicted that APEC economies’ share of adspend amongst the top 10 economies will increase from 81% in 2013 to 84% by 2016.

A key finding of the APEC report is the wide variation in standards in the APEC economies. The report recognises that advertising regulation that is not best practice can be a barrier to trade and reduce competitiveness.

“The Advertising Standards Bureau of Australia has been driving APEC to support reforms to advertising standards and systems for more than three years. We strongly believe that differences in advertising standards and complaint systems across trading economies increase the cost of doing business, create unequal operating environments for businesses in different economies and, particularly without a transparent system for resolving complaints, have the potential to generate confusion as well as distrust,” said Fiona Jolly, CEO of Australia’s Advertising Standards Bureau.

Variation is particularly evident in the practice of self-regulation. Although sixteen economies practice self-regulation, five are either without self-regulation or are in the process of implementing some form of self-regulation. In economies where self-regulatory organisations (SROs) exist, there are differences on their level of adherence to what the paper took as international best practice benchmarks.

Shortcomings in some self-regulatory models in APEC economies include the exclusion of consumers from code drafting, the lacking of solid analytical impact assessment for new codes, and low levels of procedural transparency in many SROs. The report found that monitoring practices are underdeveloped so SROs are known to rely disproportionately on consumer complaints. Furthermore, many have no legally binding sanctions, and complaints juries are often overly represented by industry members.

Glen Wiggs, Director of the Foundation for Advertising Research, said “The results are not surprising and reveal a wide disparity of standards ranging from countries with sophisticated self-regulatory regimes and others with none at all. What the survey does do is identify where resources should be allocated to raise the standards in the entire region”.

The APEC report has three recommendations that would give the highest marginal benefit. These include sharing of best practices for both general and sectoral advertising regulations between economies. Special attention may be put on regulating the internet advertising considering its exponential use as an advertising medium. APEC’s position as a multi-lateral forum in the Asia-Pacific region may be a good platform to address the cross-border nature of internet advertising.

A second recommendation is to initiate dialogues on sectoral advertising regulations where there are common interests in regulating specific sectors to generate better understanding among member economies on the rationale behind the regulation. In particular, dialogues may also include discussions on how some restrictions are acting as technical barriers to trade. Specifically for advertising, the negative impact of such restrictions may actually be more severe because besides being an industry in its own right, advertising promotes growth of other sectors.

A third recommendation, which lends itself well to industry support and involvement, is that organisation of capacity-building workshops to assist economies in improving the capability of their SROs, particularly in the areas of efficient compliance and monitoring; more effective consumer and industry awareness; and an increase in efficient and resourced administration.

The report is a promising indication of the direction APEC intends to take in reforming advertising regulation in the Asia-Pacific region. Companies and industry associations have been requesting that APEC support alignment of regulatory frameworks since 2012. It would seem that these calls are being recognised by APEC, in this encouraging step forward.

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