What do the Bootleggers, Baptists, and... have in common?

The upcoming 🔞 Ban on the sale of Energy Drinks to children in Russia.

The concept of "Bootleggers and Baptists" has long been associated with the alcohol market. It originated during the Prohibition era in the United States and centered around the idea that:

"Both sides benefit from the ban on the sale of alcohol on Sunday - the church (Baptists) and alcohol producers (bootleggers)."

During the days of the ban, alcohol sales actually increased, and competition decreased.

🧟‍♂️ However, this concept extended beyond the "gray" market and was later adopted by the "white" tobacco industry on a global scale 🌎

Currently, five tobacco companies hold 80% of the world market.

❓So why is it profitable to limit sales and advertising?

1️⃣ To create significant 🛑 barriers for new players (new player = risk of losing market share):

⛔️ Obtaining licenses for production and turnover becomes necessary.

⛔️ Advertising is prohibited, making it challenging to introduce new brands without promotional campaigns.

⛔️ Tobacco companies have full control over the supply chain, with their own infrastructure and minimal involvement of "independent" distributors.

2️⃣ To maximize profits from the existing market share.

Advertising restrictions have the following effects:

⛔️ Reducing advertising costs.

⛔️ Eliminating the risk of losing market share due to highly successful competitor campaigns, thus avoiding retaliatory actions and marketing budget wars.

⛔️ Preventing price wars that could lead to profit decline (the proportion of discounted goods sold increases every year, with some categories reaching a 90%/10% ratio).

The ban on selling energy drinks to children will result in a potential market loss of up to 20%. 👀

In my opinion, it would be better to raise the age threshold to 21 for both alcohol and cigarettes, as is done in the USA 🇺🇸

However, this same ⛔️ ban will also mitigate risks associated with 🚸 "youth" startups and products endorsed by "teenage" bloggers like Logan Paul and Olajide "KSI" Olatunji with their PRIME brand.

The main objective ⚠️ is to regulate the sale of "Energy drinks" alongside 🍸 "alcohol" and 🚬 "cigarettes." Thus, this ⛔️ ban will inevitably be followed by 💥 "advertising restrictions" and, potentially, even a 💥 ban on sales in certain locations, such as places like schools and in the vicinity of social relevant spots "

Sun Aug-11-2024 11:21

Armen Nelson