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Government stubs out tobacco advertising

Ardi Kolah examines the forthcoming tobacco advertising, promotion and sponsorship ban in the UK and looks at the marketing challenges that lie ahead for the tobacco industry

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Advertising as well as promotions and sponsorship of events by tobacco companies become unlawful in the UK as at 00:01 on Friday February 14, 2003.

The Independent Television Commission's Code of Advertising Standards and Practice already prohibits the advertising of all tobacco products on TV, so this recent move effectively extends it to all other media. By implication it makes redundant the Cigarette Code, which has been the tobacco industry's self-regulatory code governing the way it advertised and promoted its products.

The government's choice of Valentine's Day to commemorate this historic step is perhaps its way of saying there are no hard feelings towards a lawful industry that contributes billions to the Exchequer in taxes every year.

But this has nothing to do with Cupid. Let's face it. There're no votes in smoke.

Forget freedom to choose. This could be the beginning of the end of an industry that has become demonised. The government has in effect taken away the oxygen of publicity for tobacco.

Tobacco Advertising and Promotion Act 2002

This is the key piece of UK-wide legislation and was given the Royal Assent on November 7, 2002. The ban on tobacco advertising and promotion is widely defined under the 2002 Act as "a prohibition on any advertisement that has the purpose or effect of promoting a tobacco product".

This includes any form of advertising in any of the following media:

  • print

  • broadcast

  • billboards

  • internet

  • direct mail

  • product placement

    The 2002 Act also bans:

  • promotions

  • free gifts

  • coupons

  • sponsorships

    The legislation will be fully implemented by July 31 2005, when tobacco sponsorship of international sports such as Formula 1 and World Snooker are also banned.

    At first look, the 2002 Act appears very comprehensive, but on closer inspection there's still room for manoeuvre.

    Under the 2002 Act, there's also a raft of further regulations:

  • Tobacco Advertising and Promotion (Point of Sale) Regulations

  • Tobacco Advertising and Promotion (Brand Stretching) Regulations

  • Tobacco Advertising and Promotion (Sponsorship) Transitional Regulations.

    These regulations deal with transitional arrangements for sponsorship, the particular arrangements for 'brand-sharing' and for advertising at point of sale.

    There has been consultation on the draft regulations outlining the government's intentions but only the sponsorship regulations have been published so far. The other regulations are subject to scrutiny by the European Union (under the Technical Standards Directive), which will cause a delay of up to six months before they come into force in the UK.

    Double whammy

    A EU directive was agreed on December 2 2002 and supplements the 2002 Act.

    This EU directive deals with four types of cross-border advertising:

  • internet

  • radio

  • printed publications

  • international sponsorships.

    This EU directive comes into effect on July 31 2005 and has forced the UK government to bring forward its ban on tobacco sponsorship of Formula 1 from October 2006 to July 2005 -- effectively two Grand Prix seasons.

    In 1997, the UK government attempted to have Formula 1 made exempt from the EU ban and quickly became engulfed in the "Berniegate" controversy over a £1m donation to the Labour party from the Formula 1 supremo Bernie Ecclestone, which was subsequently returned.

    The UK eventually accepted a compromise of October 2006 after pressure from other EU states but further moves brought this date forward to July 31 2005.

    The EU directive now faces a legal challenge from the German government, which alleges it goes too far in banning advertisements in printed publications that do not cross borders (for example, tobacco advertising in German local newspapers).

    Television advertising was already banned under the Television Without Frontiers Directive 89/552/EEC.

    Timetable

  • Promotions and old direct mail -- May 14 2003: Promotions such as gift coupons, will be banned from May 14. Direct mail promotions initiated before October 8 1999 also have until this later date.

  • Domestic tobacco sponsorships -- July 30 2003: Transitional regulations published by the government will outlaw tobacco sponsorship for cultural and sporting events from July 30. This does not apply to "corporate" sponsorship, which does not aim to promote a product.

  • Point of sale -- October to December 2003 (expected): Regulations detailing the restrictions on point of sale advertising are in preparation. These regulations will cover advertising in shops, on vending machines and on websites. In consultation, the government proposes that these come into force "no less than five months after Royal Assent" of the bill -- ie, later than April 7 2003, but the final date has not yet been published. The draft regulations need to be submitted to the European Commission for approval, and this can take up to six months. Allowing some time between the laying of the regulations and the entry into force, it is possible the point of sale restriction will not be applied until the end of 2003.

  • Brand stretching -- December 2004 (expected): The government will issue further regulations regarding indirect tobacco advertising (also known as brand-sharing). Until published, the dates are uncertain. The draft regulations (published in August 2002) proposed an additional period for the phasing out of indirect advertising of 18 months after the regulations are laid before parliament. It is not clear when the regulations will be laid. Again it is possible that it will take until September 2003 to lay regulations, so these provisions may not come into effect until the end of 2004 or later if the government allows the full 18 months.

  • International sponsorships -- July 31 2005: (Formula 1, world snooker) will be banned from July 31 2005, in line with the new EU directive agreed on December 2 2002.
  • Room for manoeuvre?

    Despite the noose tightening around the neck of tobacco marketers, there is still room for manoeuvre if you look hard enough:

  • advertising in publications within the tobacco trade

  • advertisements in publications for which the UK is not the principal market (except in-flight magazines)

  • advertisements that are not for cigarettes or hand-rolling tobacco within specialist tobacconists, where over 50% of the sales are cigars, snuff, pipe tobacco and smoking accessories

  • responses to individual requests from members of the public (this is the only direct mail that is allowed)

  • brand stretching -- the brand name can be used if it is made sufficiently distinct from the tobacco brand

  • advertising at point of sale -- in shops, on vending machines, and on internet sites selling cigarettes, although this will be strictly limited and defined in regulations

  • advertising that has been created from imaginative use of display of tobacco products -- this could be regulated but no regulations have as yet been published

  • it is a defence for the tobacco manufacturer to claim it did not know or could not foresee the effect would be to promote tobacco.

    Future litigation?

    Although the above may appear to give some level of comfort to tobacco marketers, there is likely to be litigation surrounding the controversial activity of brand stretching, according to anti-tobacco pressure group ASH.

    It is certainly unclear where the boundary between a tobacco ad and a genuine non-tobacco ad will be. The legal burden of proof is on the authorities to show, beyond reasonable doubt, that a given ad has the purpose or effect of promoting tobacco.

    This will test the ability of the courts to make such fine distinctions on the evidence when the whole purpose of brand stretching is, of course, to introduce an element of ambiguity and identity/reputation transfer to non-tobacco products that could assist in helping sales of tobacco products indirectly.

    Tobacco marketers are free, however, to use their ingenuity to create eye catching point-of-sale advertising and we could expect to see more investment from the tobacco industry in confectionery-tobacco-newsagents and independents as they switch advertising budgets into retail operations.

    Displays for tobacco products could become a new art form.

    Internet advertising

    The 2002 Act deals with the internet in Section 2, the general prohibition of advertising in particular at Section 2(3) and Section 2(4).

    Section 2(3): Distributing a tobacco advertisement includes transmitting it in electronic form, participating in doing so, and providing the means of transmission.

    Section 2(4): It is not an offence under subsection (1) for a person who does not carry on business in the United Kingdom to publish or cause to be published a tobacco advertisement by means of a website which is accessed in the United Kingdom; and, in that case, devising the advertisement or causing it to be devised is not an offence under subsection (2).

    This legal double-negative means that it will be illegal to advertise tobacco on the internet and allow it to be accessed in the UK if you are carrying on a business in the UK, but not so if you are outside the UK.

    So tobacco marketers, start packing now... you have been warned.

    Ardi Kolah is author of 'Essential Law for Marketers' (Butterworth Heinemann, £25.00). Read the review of the book on Brand Republic and order your copy online here.

    If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.

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