A looming UK tobacco ad ban and gruesome pictures on cigarette packs feature in these recent developments in Canada, Luxembourg and the UK.
Who: British American Tobacco, Imperial Tobacco, the European Court of Justice, the Quebec Superior Court and the UK Government.
When: August and September 2002
Where: Luxembourg, Canada and the UK
It looks like the end game for tobacco marketers in the developed world. In Canada, tobacco firms are awaiting the outcome of a last ditch challenge in the Quebec Superior Court against anti-smoking laws which mean that 50% of the surface area of cigarette packs must be taken up with graphic images of the effects on the body of smoking such as lung tumours and diseased gums.
In Europe, two leading tobacco manufacturers suffered a set-back when the Advocate General to the European Court of Justice expressed an opinion on the tobacco makers' legal challenge to Directive 2001/37/EC. This obliges cigarette makers in the EU to cover 30% of the surface area of cigarette packs with warnings such as "Smoking Kills". The Directive also imposes limits on the levels of tar, nicotine and carbon monoxide in cigarettes and bans terms such as 'lite' and 'mild'. All these new rules are to be applied whether or not the products in question are to be sold in Europe or exported beyond. The manufacturers challenged the Directive on the basis that it was ultra vires owing to its being based on health considerations and not being conducive to improving the function of the EU's single market.
The Advocate General's opinion, which is normally followed the Court itself, in its final judgment a while later, rejects the challenge. This is primarily on the grounds that the EU does have the power to harmonise the market and stop trade barriers being created by different sets of tobacco labelling rules in different EU countries. The Directive was signed off in May 2001 and also gave European Union governments the option of requiring graphic photographs illustrating smoking related health risks on the packs, in the same way as the Canadian legislation. The ECJ decision is expected later this year.
Separately, the UK Government having adopted a Private Member's Bill banning tobacco advertising now seems intent on seeing that Bill become law by October 2002, with the ban itself in force by the beginning of 2003. The 'Tobacco Advertising and Promotion Bill' does not define the term 'advertisement', so it is clearly intended to have very wide ambit including digital and marketing communications and so-called 'brand sharing' whereby non-tobacco products use the tobacco branding of a particular tobacco product as a means of promoting that tobacco product or vice versa.
In the area of brand sharing, it is proposed to issue separate regulations so that brand owners will know where they stand. The regulations will apparently make it clear that they will only come into play where the purpose or effect of what is going on is to promote a tobacco product. They will also set out the limited circumstances in which brand sharing will be legally permissible.
In the direct marketing arena, the bill indicates that it will be permissible to send tobacco advertising material to consumers kept on a database by the brand owner, but only on the basis that each consumer on that database must individually have requested that information on each every occasion that it is sent. In other words, a request for information cannot be considered as a request for general further information at any point in the future.
In a retail context, the intention is to allow advertising of tobacco products around the till area, typically on a gantry in a corner shop or in a kiosk in a supermarket, but to ban the advertising material elsewhere on the premises, for example, in window displays. Again, it appears to be the plan that there will be more detailed regulations in this area, designed to prevent this saving being taken advantage of to widen the scope of permitted advertising.
Another area for possible ingenuity on the part of tobacco brand owners is a saving for 'specialist tobacconists'. These may continue to advertise specialist products (other than cigarettes or hand-rolling tobacco) within and on the outside of their premises. Again, more detailed regulations are promised in this area to prevent abuse, but 'specialist tobacconists' are defined as 'retailers who specialise in non-cigarette and hand-rolling products – specifically, cigars, snuff, pipes, pipe tobacco and smoking accessories. Furthermore, the sale of these goods must account for the principal part of the specialist's income, so that those who merely sell cigars, pipe tobacco and smoking accessories as a sideline will not qualify.
Separate provisions prohibit sponsorship agreements if the purpose or effect of what is done is to promote a tobacco product. There is no reference to the widely publicised carve-out agreed to some time ago by the UK Government in respect of Formula One sponsorship, but another saving that does appear is to the effect that tobacco brand owners may continue to subsidise any form of event or activity so long as the company's products are not given any promotion in return.
For example, it is not intended to prevent a tobacco company supporting a theatrical production and being acknowledged for so doing, provided that the acknowledgement mentions solely the name of the company and not any of its products and does not involve any special treatment of the tobacco company over and above other sponsors, the purpose or effect of which is the promotion of tobacco products.
Why this matters:
Although the tobacco industry is predictably fighting a feisty rearguard action, these developments and the up-and-coming EU ban, all lend an air of inevitability to regulators' efforts to put a final stop to tobacco advertising in the developed world, leaving tobacco brand owners in Europe with the prospect of playing ducks and drakes with regulators as regards the interpretation of the various limited exceptions to the overall ban.