Aside from the fact that for once Europe is lessening restrictions rather than tying us up in proverbial red tape, the rejection of these proposals is a bit King Canute-like.
Private Eye had a scathing piece last week on companies supplying props to the BBC. The article put the spotlight on a couple of product placement agencies and highlighted some bragging on their websites about successful - and entirely within current legislation - placement in BBC programming.
The BBC spokesman was quoted as saying that discounted props should only be used "where there is a clear editorial justification". However, as the BBC is under constant scrutiny to slash production budgets, it seems unlikely that this kind of placement is going to diminish.
If the practice is already happening, then culture secretary Andy Burnham's claim that product placement might "contaminate" British TV programmes doesn't really work.
Addressing the Convergence Think Tank earlier this month, Burnham said: "If Jim Royle gets out of his chair for a KitKat, I want to think 'he fancies a KitKat' - not 'KitKat my arse!'.
"If I thought it was because someone has paid for him to eat one, it would change the way I felt about the programme."
Anyway, thinking about it, has product placement in any movie you've ever watched made you feel that the movie was contaminated, unless that placement was ridiculously clumsy?
Clearly, this is not an area that should be opened up commercially without any restrictions, but it seems a very old paradigm to continue to pretend that the consumer will be tainted, or the quality of the show diminished in some way, if appropriate product placement is allowed.
In fact, there are even situations where the consumer might welcome product placement. Viewers to a teen soap in the US were pleased to find that they could buy all the clothes from the show at one specific retailer - an arrangement that was organised by the media agency as part of its communications strategy.
Furthermore, I am sure there are arguments that the revenue from product placement would actually ensure better programming on TV, as a way of augmenting production budgets when economic pressure is driving them downwards.
Finally, let's remember that, although Burnham mentioned looking at the possibility, no one has yet outlawed product placement for programmes that are made to be viewed online.