As part of the MARQUES Regulatory Team’s focus on brand restrictions, Maria del Carmen Alvarado and Daniela Supo discuss some recent case studies in Peru.

Trade marks are far more than just logos or symbols – they are the essence of a brand’s identity, a bridge between consumers and the products they trust. In Peru, as in many parts of the world, this vital connection is being reshaped by stringent regulations aimed at promoting public health.

However, these brand restrictions, while well-intentioned, come with a cost: they challenge the very foundation of trade mark rights by curtailing how companies can express their uniqueness and value. As industries such as tobacco, pharmaceuticals, and food products grapple with increasing limitations on their use of trade marks, it raises a critical question: How far can regulation go before it starts eroding the power of brands to compete and thrive in the marketplace?

This analysis delves into the impact of Peru's brand restrictions, examining the fine line between public interest and the protection of intellectual property rights.

General considerations on brand restrictions

Brand restrictions encompass regulatory measures that limit the use of trade marks, including plain packaging, prohibitions on specific brand elements, and mandatory health warnings.

Although these measures are often introduced to promote public health, they also significantly restrict the ability of businesses to differentiate their products and communicate their brand values to consumers.

Empirical evidence from around the world suggests that the effectiveness of such restrictions is mixed. For instance, Australia’s plain packaging law for tobacco, which aimed to reduce smoking rates by removing brand identity from cigarette packs, has led to unintended consequences such as a rise in counterfeit products.

Similarly, in Peru, the introduction of brand restrictions has created new challenges for businesses, particularly in sectors such as tobacco, pharmaceuticals, and food.

Case study: processed foods and beverages

Peru’s Law on the Promotion of Healthy Nutrition for Children and Adolescents (Law No. 30021) introduces a series of restrictions on food advertising aimed at minors, particularly targeting processed food and non-alcoholic beverages high in sugar, fat or salt, with the goal of promoting healthier eating habits among individuals under 16 years old.

Specifically, Article 8 of the law prohibits advertisements that use visuals, characters, or messages likely to attract children under 16 or imply benefits such as enhanced strength, popularity or superiority.

For example, the use of colourful or animated characters often seen in children’s food packaging is restricted if they convey such messages. Additionally, advertisements that create misleading associations, such as suggesting that the consumption of a product provides health or social benefits, are also prohibited.

Prohibition on characters and visuals

The law explicitly prohibits the use of animated characters, both real and fictional, in advertising aimed at children under 16 if these elements suggest strength, popularity or superiority. Companies that incorporate such characters into their trade marks are significantly restricted in how they can market their products.

In Resolution No. 104-2019/CCD-INDECOPI (25 June 2019), the advertising of a powdered beverage featuring an animated character dressed as a superhero and holding the prepared product with a caption at the top stating "activate your power" was sanctioned.

The Commission for the Supervision of Unfair Competition (CCD) ruled that the imagery and wording promoted the acquisition of strength as a benefit of consuming the product. The Commission noted that the superhero was depicted making a hand gesture symbolizing strength, which suggested that the product, “Kiwigén” was the source of power and energy.

Use of fruit images

Another important restriction under the Healthy Food Law pertains to the use of fruit images on processed food products that do not contain those natural ingredients. This regulation directly affects trade marks that incorporate such elements, forcing businesses to reconsider their branding strategies.

In Resolution No. 101-2019/CCD-INDECOPI, a company was fined for using a personified pineapple on the packaging of a beverage that did not contain pineapple as an ingredient.

Despite the company's argument that the image was a registered trade mark, the competent authority ruled that using the fruit in a misleading way violated the provisions of the law, particularly Article 8(m), which prohibits the use of images that falsely suggest the presence of natural ingredients.

The authority further established that the fact that the pineapple image was a registered trade mark did not exempt the company from complying with advertising regulations.

Celebrity and athlete endorsements

In addition to restrictions on characters and visuals, Peru’s Healthy Food Law limits the use of real-life figures such as celebrities and athletes in advertising aimed at children. The law seeks to prevent the association of unhealthy products with positive attributes such as athletic performance or social popularity.

In Resolution No. 112-2019/CCD-INDECOPI, a beverage company was fined for using the image of a well-known Peruvian soccer player in its advertising. The use of the athlete, combined with the product's positioning as a sports drink, was seen as promoting the idea that consuming the beverage would improve athletic performance, which is prohibited under Article 8(e) of the law.

Advertising warnings

Peru’s Healthy Food Law also mandates the inclusion of "high in" labels on food packaging for products that exceed the permissible levels of sugar, fat and sodium. These labels are intended to inform consumers about the potential health risks associated with consuming these products.

However, this requirement limits the space available for branding and marketing, as it obliges companies to allocate a significant portion of their packaging to these warnings.

This regulation echoes similar measures implemented in countries such as Chile, where "high in" labels have become mandatory for certain food products. In Peru, the requirement to include these warnings has prompted businesses to rethink their packaging design and how they present their brands to consumers.

Conclusions

The imposition of brand restrictions in Peru highlights the ongoing challenge of balancing public health objectives with the rights of trade mark holders. While these regulations aim to protect vulnerable consumers, particularly children, from unhealthy products, they also limit businesses’ ability to fully utilize their trade marks in differentiating their offerings and conveying their unique value propositions to the market.

Although Peru’s approach is somewhat less restrictive compared to countries such as Chile and Mexico, it still creates significant hurdles for companies, especially in the processed foods and beverages sector. The limitations on the use of characters, visual elements, and specific marketing strategies that are crucial for building brand recognition and consumer loyalty present serious challenges. These constraints can undermine a brand’s ability to effectively communicate with its target audience, especially younger consumers.

Moreover, the broader economic implications of these restrictions cannot be overlooked. Innovation may be stifled, as companies are forced to operate within narrower marketing frameworks, limiting their capacity to differentiate their products and engage consumers.

This is particularly challenging for small and medium-sized enterprises (SMEs), which often rely on creative branding strategies to remain competitive. SMEs may find it more difficult to comply with these regulations while maintaining their market presence and competitive edge.

It is vital that policymakers continually evaluate the impact of these restrictions and explore less burdensome alternatives that could achieve the same public health outcomes.

Striking the right balance is essential. Overly restrictive measures can dampen innovation, reduce competition, and diminish the inherent value of trade marks.

As Peru continues to implement and refine its brand restrictions, it is crucial to ensure that these measures remain proportionate, evidence-based, and considerate of their broader economic consequences, fostering both consumer protection and a competitive, innovative marketplace.

Maria del Carmen Alvarado and Daniela Supo are lawyers with Rodrigo, Elias & Medrano Abogados in Peru. Maria is also a member of the MARQUES Regulatory Team. 

Pictures provided by the authors