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. Last Updated: 07/27/2016

Court Bans Alcohol Ads on Billboards

A Moscow arbitration court last week banned the advertisement of alcohol on billboards, putting an end to a drawn-out struggle between the government and ad agencies — essentially eliminating an estimated $15-million-a-year industry.

With last week's ruling, the court handed the Anti-Monopoly Ministry the victory it had been seeking since November 1999, when a new law came into effect on the production and sale of alcohol.

However, the new law, which permits alcohol advertisements only in specified trade magazines and inside shops and restaurants where alcohol is sold, continued to be violated by ad agencies, who used a variety of loopholes while legal challenges played out in the courts.

A number of companies, one after another, went down to defeat by arguing that billboard ads for alcohol should be regulated not by the law on the turnover and distribution of ethyl alcohol, but by the law on advertising.

But while the Anti-Monopoly Ministry was winning cases against well-known Moscow agencies like APR-City, St. Petersburg firm OMM was racking up victories in local and regional courts with a different argument:

OMM contended that in accordance with the law on the turnover and distribution of alcohol, advertising agencies were not "distributors of alcohol production."

Both the local St. Petersburg arbitration court and the federal arbitration court of the northwestern district ruled in favor of OMM, dismissing the Anti-Monopoly Ministry's main argument that billboard advertising agencies should be responsible for the placement of ads.

With every other ad agency already defeated, all eyes turned to Tuesday's appeal in the high arbitration court, which has the final say in such matters.

Banning alcohol ads on billboards essentially closes a $15-million-a-year industry.

It didn't take long for the saga to end.

In less than an hour, OMM's string of luck finally ran out as the court's presidium ruled in favor of the ministry, ending the struggle by advertisers for the right to promote alcohol on city streets.

"They held out to the end but now the question has been resolved for good," said Sergei Puzyrevsky, head of the ministry's department charged with monitoring adherence to the law on advertising.

"No doubts [about how to correctly interpret the law] remain," Puzyrevsky said.

OMM general director Alexei Mezhev declined to comment ahead of the Tuesday hearing "so as not to jinx" himself.

Mezhev could not be reached for comment after Tuesday's ruling.

The high court's decision complicates the position not only of OMM, which controls roughly one-third of the St. Petersburg billboard market, according to monitoring agency Espar-Analyst, but also that of other agencies.

A number of Moscow firms, including Big Board and Rosvero, decided late last year to abandon alcohol advertising altogether — a list will now grow.

"We can't do anything more, we will give up," said Maxim Tkachev, chairman of APR-City, one of Moscow's three largest advertising firms.

"As of now, all alcohol advertisements will completely disappear from the company's billboards," Tkachev said.