Whose responsibility is it to regulate sales promos ? The answer should be simple. But it is not. The National Lottery Regulatory Commission (NLRC)is locked in a battle against the Advertising Practitioners Council of Nigeria (APCON) and the Consumer Protection Council (CPC), writes ADEDEJI ADEMIGBUJI
Who should regulate sales promotion run by over 500 advertisers in Nigeria? Advertising Practitioners Council of Nigeria (APCON); Consumer Protection Council (CPC) or the National Lottery Regulatory Commission (NLRC)? Are sales promotions an lotteries the same? These are questions that are generating a bad blood against the NLRC, which is forcing advertisers and marketing organisations to pay for vetting of their sales promotional activities.
Observers say this amounts to subjecting advertisers to additional regulation. The CPC and APCON, through its Advertising Standard Panel (ASP), perform a similar role.
The lottery business is believed to be a special intervention fund available to governments as an alternative to raising taxes when there are perceived infrastructural deficits. Funds realised from lotteries are expended in providing infrastructure in critical health, education, transportation and power sectors. With capacity to fetch Nigeria N350bn annually, experts say it is not the same as sales promo.
According to a doctoral student in Marketing at University of Lagos, Kenneth Nwogwu, sales promo is a marketing tool to reward loyal customers.
“Sales promo has different tool of which lottery is one. But the lottery in sales promo is a reward system for loyal customers but it is not the same with the lottery the NLRC should regulate. Sales promo is meant to address a marketing or sales decline to achieve a short term objective and you do not need to buy a ticket to participate in it like the national lottery or other lottery that is not coming on the grounds of marketing a product or reward loyal customers,” he said.
The role of the NLRC in sales promotional regulation is being contested on the ground that the Nigerian Advertising, Laws, Rules and Regulations through Act No 55 of 1988, Act No. 93 o 1992, Act No. 116 of 1993 among others had already empowered “APCON to regulate advertising and sales promotion in all its aspects and ramification.” Also, industry observers believe that the Act 1992 No. 66 that established the CPC also empowered the commission to handle consumers complaints arising from consumption of products and sales, including promo.
The President of Advertisers Association of Nigeria and General Manager Consumer Marketing, MTN Nigeria, Mr. Kola Oyeyemi told The Nation that the NLRC has no business meddling in the affairs of CPC and APCON. He said everyone in the industry has been quiet over the issue because they were afraid that fighting a government agency might come with an axe on them.
“If you look at what has happened so far, what APCON seems to regulate is advertising and sales promotion, vet the consumer sales promo to ensure that the claims are true and the execution is credible and the prizes are given to customers and consumers. APCON is also to ensure that the mechanics are transparent and the participants are rewarded. What I know CPC does is similar, except the vetting of the communication or the messaging of the sales promo. That already is duplication but for NLRC, it’s meant to regulate lottery and not consumer promo,” he said.
The Dean, Lagos State University-Adebola Adegunwa School of Communication, Prof Lai Oso, told The Nation that on the regulation of sales promotion, APCON’s main concern is vetting the communication of sales promo to ensure that claims made are genuine, adding that the CPC protects consumers when complaints arise. The NLRC, he said, is only meant to regulate national lotteries.
“APCON is concerned with the communication of sales promo and its messages. As a result, it regulates to ensure that those promises are genuine. Lottery commission should not concern itself with that but lottery only,” he said.
The legal tangle
A lawyer, who works with Rickey Tarfa and Co, Gbolahan Gbadamosi, in his article on the issue, said the law that established the lottery commission was borrowed from other jurisdictions. According to him, in England, a statute of 1698 provided that lotteries were illegal unless specifically authorised by a statute. A 1934 Act was further liberalised in 1956 and in 1976 small lotteries were legalised. Its operation became national in the United Kingdom and the Isle of Man. It was operated by Camelot Group to whom the licence was granted in 1994 and 2007. The lottery was regulated by the National Lottery Commission and was established by the then British Prime Minister, John Major, in 1994. To take maximum advantage of what lottery should be and how it should be operated, when London won the bid to host the 2012 Summer Olympics, Olympic Lottery scratch cards were launched on July 27, 2005 under the brand name “Go for Gold”.
He said: “From the UK and the US, it is clear that lotteries were established by the government to either raise funds for a specific project or to augment state revenues or to support educational system. In whichever way, tickets were offered as part of lotteries to enable interested parties participate therein.”
National Lotteries Act
The National Lotteries Act, 2005 brought to life the National Lottery Regulatory Commission as signed into law by former President Olusegun Obasanjo on March 30, 2005. Section 57 of the NLA defines “lottery or lotteries” to include “any game, scheme, arrangement, system, plan, promotional competition or device for the distribution of prizes by lot or chance, or as a result of the exercise of skill and chance or based on the outcome of sporting events, or any other game, scheme, arrangement, system, plan, competition or device, which the President may, by notice in the gazette, declare to be lottery and which shall be operated, according to a licence.
Gbadamosi explained: “A community reading of sections 17, 18, 19, 21, 23 and 25 of the Act are on the operation of the national lottery, especially Section 19 (1) which reads that, “The President may grant licence to any person or corporate body to operate a national lottery or any lottery, by whatever name called.
“Are the operators of the National Lottery Act implementing the provisions of the statute? The immediate answer is in the negative. What was the NLA created to elicit? What is the state of the National Lottery Trust Fund created by the National Lottery Regulatory Commission? It now seems that the NLRC has almost completely deviated from its mandate of birthing and engendering a viable lottery industry to pursue easy forays in other spheres which are outside its remit. One immediate case in point to illustrate this is the creative stretch of the NLRC towards ‘regulating’ consumer sales promotions of private sector businesses especially in telecommunications, banking, manufacturing, broadcasting, etc. To all intents and purposes, CSPs by definition are a variety of short-term promotional techniques to encourage customers or consumers to respond in some way. A sales promotion is a typical marketing technique that adds values to a product in order to achieve specific marketing goals. In these categories of CSP are some of the companies that engage in short-term promotions which operations are not within the contemplation of the drafters of the National Lottery Act.”
He went on: “It is argued that the act of the NLRC in issuing letters alleging ‘breaches’ of the provisions of the NLA to some companies that engage in short-term promotions is illegal as can be gleaned from section 29 of the Act (Sales of Tickets). This section requires that it is mandatory that a ticket of any lottery under the Act shall be sold on behalf of a licensed company through personal applications postage or electronic transmission. It is my humble submission that companies conducting CSPs do not sell tickets, it is only additional value or incentive for patronising a particular product. The consumer is definitely not engaging in a lottery game as defined by statute because he or she already gets value for his money in terms of the product he or she has paid for.”
The Deputy Director, Public Relations, CPC, Abiodun Obimuyiwa, said the council is empowered to validate promotions to make sure they are not organised to swindle consumers.
A former CEO/Registrar of APCON, Prof Joseph Bel-Molokwu, said the NLRC is a victim of the duplication of function that is common in the public sector.
“We have seen NAFDAC and SON clash over roles and most of the roles have a thin line dividing them. What I advocate is collaboration. We have had conflict before between CPC and APCON. It is a question of collaboration. All I see is regulators jostling for territories to raise revenue. National Lottery should come under APCON’s Advertising Standard Panel as a representative where we have NAFDAC, CPC and others in other to enhance collaborated effort where there is a thin line function,” he said.
When The Nation called the head of the commission, Lagos Zone, Mr. Fidelis Ajibogun, he refused to comment but referred the reporter to the commission’s website for the contact of the legal department.
However, at a news conference held recently in Abuja, the Chairman of the Commission’s board, Damian Doddo, said the commission has contributed very well to the national economy since its establishment.
“In 2013, the commission remitted the sum of N712, 832,222.00 to the Trust Fund and already, more than N537, 306,618.00 has been remitted in the first half of 2014, hence, the total amount so far remitted to the Trust Fund is in excess of four billion naira,” he noted.
According to Doddo, this feat was made possible, because, “the National Lottery Act of 2005 requirement is that, for any game or promotional lottery, 50 per cent of the proceeds should go for prizes, while 20 per cent goes to the National Lottery Trust Fund for the administration of good projects that directly affect the lives of the citizens.”
He added that the commission was consistent and up-to-date in making the necessary remittances to the Fund.
The Nation learnt that the commission is lobbying the National Assembly to include sales promotion in its mandate, but stakeholders believe that the intrusion of the commission into promos must have been necessitated by the collapse of the National Sports Lottery, the platform the commission was designed to regulate. However, concern stakeholders advised the government to revive the National Sports Lottery to create platform of operation for NLRC. Citing the success in Lagos State, industry players told The Nation that Federal Government should create an enabling environment for lottery to operate.
