The character licensing market could be facing tough times if threats of advertising restrictions become a reality.

Having opposed Ofcom's three proposals on advertising to children, which are all based around time restrictions on advertisements, a coalition of industry bodies submitted what they claim is a tougher proposal, including a ban on licensed cartoon characters and celebrities in advertisements targeting children, and another on branded food and drink commercials during children's programmes on terrestrial TV.

Some are unimpressed with the proposals, particularly those relating to characters. "There are threats of restrictions on advertising in this sector to children, but it is not just licensed characters that should be looked at," says Andrew Levy, managing director of Licensingpages, a company that provides information for the licensing and brand industry.

"Haribo and Milky Bar, and many own-label brands, should be under the spotlight. It is also important to remember that children do get to see advertising for supposedly adult brands, such as Mars, Kit Kat and Galaxy."

Accused of not using character licensing in a responsible way, companies have been quick to emphasise that, while it is important that kids eat confectionery responsibly, their products should be seen as a treat. More often than not, this message is now written on their packaging, alongside health and nutrition advice. "Character products tend to be added value and come with keepsakes. They are about treating and gifting," says a spokesman for Bon Bon Buddies. "The confectionery is merely a small part of the product proposition. There should be a sensible and responsible approach to kids' confectionery products across the whole category, not just by isolating character licensing as a scapegoat."

With their treat credentials, Easter and Christmas continue to be key selling periods for confectionery featuring character licenses. Yet the everyday market also offers an opportunity, according to children's confectionery specialist Kinnerton. "While the business is very seasonal, there is a healthy everyday business around our character chocolate bars and lollies," says Rachel Wyatt, divisional director for marketing. She also says there is a gap in the market for both girls and boys from 11 years old into their teens, when character licensing gives way to pop, fashion and sports.

When it comes to popularity of characters, those with universal appeal, including Scooby-Doo and The Simpsons, realise the best results. But those with the nostalgia factor, such as Dennis the Menace, Looney Tunes and Tom & Jerry, also perform well, says Carl Richardson, MD of Mr Lucky Bags.

However, choosing the strongest characters is not an easy task, with the only constant in licensing being change, according to Richardson. "There will always be brands and characters you miss. Spotting the surefire winner is not easy. However, apart from the huge movies next year, such as SpiderMan 3 and Shrek the Third, Viva Piñata looks to be interesting property for the future."

Bon Bon Buddies says the Pixar movie Cars was an exciting movie franchise and has been a successful product licence for the company. Next year it will be working on Disney's cartoon chef Ratatouille and Pirates of the Caribbean III, while predicting the new The Simpsons movie will be one to watch, while Bratz and Doctor Who will also be key licences. For the end of this year the company is concentrating on its Scooby-Doo branded products. New for Hallowe'en is a range of Scooby-Doo sweets, featuring jelly skulls and crossbones, as well as Shaggy & Scooby chocolate lollies.n

Topics