UICC / ECL EU Liaison Office

33, Rue De Pascale

B-1040 Brussels - Belgium

Tel: (32) 2 230.20.27.

Fax: (32) 2 231.18.58.

E-mail: joossens@globalink.org

This report has been prepared with financial support in part from theCanadian Cancer Society.

Foreword

Since 1989, when the EU first announced proposals to restrict tobacco advertising, the tobacco industry has been relentless in its opposition.  This opposition was expressed in three different ways.  First, the industry lobbied against the proposals.  Second, after losing the political argument, the industry then challenged the Directive in Court.  But third, and perhaps most pernicious of all, it prepared and introduced plans to circumvent any restrictions that might eventually be adopted: it invested heavily in indirect advertising.

The industry effectively moved the goalposts.  Instead of (or as well as) advertising tobacco products as such, it switched to promoting brand names.  Cigarette brands became associated with totally different products, such as clothes, boots, or travel. These were then marketed heavily, maintaining public awareness of the so-called 'values' linked to the original product but without appearing to advertise cigarettes.

The role and effect of indirect advertising were amongst the considerations mentioned by Advocate General Fennelly in his Opinion, which preceded the decision of the European Court of Justice (ECJ) to annul the Directive.  He concluded that the promotion of non-tobacco products, despite being branded with the names, logos and imagery of tobacco products, could not be proved to have an effect on tobacco consumption.

This report by Luk Joossens draws a very different conclusion.  There is plenty of evidence that indirect advertising directly influences preferred choice amongst cigarette brands.  There is a clear lesson in all this for health advocates.  Anything that is done to promote tobacco and/or tobacco brands is done solely to sell tobacco products.  Anything that is done to restrict or outlaw tobacco advertising will only work if the definition of 'advertising' is all-embracing, covering every aspect and nuance of promotion and allowing no loopholes for the tobacco industry to exploit in it continuing efforts to market its deadly product.

Andrew Hayes

UICC/ECL EU-Liaison Office

Introduction

In 1998, the European Community adopted a Directive on tobacco advertising, which was due to take effect progressively from 2001 onwards.  The Directive bans all tobacco advertising except at points of sale, prohibits indirect advertising and brand stretching (i.e., using tobacco logos and brand names to advertise other products), and eventually removes all publicity for tobacco products that presently surrounds tobacco industry sponsorship of sporting and cultural events.

The validity of the Directive was challenged in a case brought to the European Court of Justice (ECJ) by the German government and by various UK tobacco companies.

Following the recommendation to annul the Directive by Advocate General Fennelly on 15 June 2000, the Court annulled the Directive on 5 October 2000.  While the issue of indirect advertising was not addressed in the final Court decision, it was discussed in the opinion of the Advocate General.

According to the Advocate General, the Advertising Directive did not constitute a disproportionate restriction on freedom of expression in so far as it imposed a comprehensive prohibition on the advertising of tobacco products.  However, he did not take the same view regarding the prohibition of the advertising of diversification products: “It is by no means self-evident that the advertising of non-tobacco goods and services which bear brands or other distinguishing features associated with tobacco products has an effect on consumption levels of the latter products, taken as a whole. No evidence has been presented on behalf of the Community legislator to suggest that such a link exists. (…)”[1]

The comments of the Advocate General raises several questions:

1. Is indirect advertising the same as advertising for diversification products?
2. What is the effect of indirect advertising campaigns?
3. What has been the attitude of tobacco companies towards indirect advertising?

§1 Is indirect advertising the same as advertising for diversification products?

The answer to this question is yes.  The purpose of indirect advertising and advertising of diversification products is the same: to promote tobacco products and to circumvent tobacco control legislation.  In public documents the tobacco industry would use the term brand diversification advertising, whose “only purpose is to transfer the imagery of the mother brand to a new product or service so that it can generate profitable sales on its own”.[2]  In secret documents the tobacco industry admits that the aim of diversification advertising is to promote tobacco products in countries where tobacco advertising is restricted or banned. (cfr. §3)

The term indirect advertising is more frequently used in tobacco control legislation and can be defined in the following way:

Indirect tobacco advertising is advertising which, while not specifically mentioning the tobacco product, tries to circumvent a tobacco advertising ban or restriction by using brand names, trade names, trade marks, emblems or other distinctive features of tobacco products with the aim or the indirect effect of promoting a tobacco product.

Most cigarette brands depict in their advertising a strong image, such as Marlboro and its cowboy, Peter Stuyvesant and its travels or Camel and its adventurer.  The aim of indirect tobacco advertising is to promote, to reinforce or to maintain the impact of the brand name  and its theme.  Indirect tobacco advertising includes those advertisements for non-tobacco products and services bearing the same name as well known tobacco brands and using  the same advertising techniques and “lifestyle” content as tobacco brands.

Indirect advertising has nothing to do with the diversification policy of tobacco companies.  Philip Morris for instance diversified into other consumer goods with an agriculture basis. One of the first diversifications was the purchase in 1970 of the Miller Brewing Company.  In 1985 it acquired General Foods and in 1988 Kraft Inc.  Total operating revenues of the Company in 1999 were $78.266 million, of which $17.477 million from the food sector and $4.342 million from the beer sector.[3]  Philip Morris’ range of products in the food sector is tremendous.  But the leading brand of PM, Marlboro, is not used to sell those products. Marlboro’s only target is to sell cigarettes.  When the brand name Marlboro or the name of an other cigarette brand name is used, strict criteria are applied.  In a confidential document from 1993, PM describes three criteria:

“In order to serve our advertising and promotional purposes, diversifications must adhere to the following 3 basic criteria:

1.      The profile of the diversification buyer must be close to the profile of the smokers we have or want to have.

2.      The image of the product (or service ) representing the diversification must be close and consistent with the image of the brand(s) we intend to advertise.

3.      Both the product (or the service) and the P.O.S. network must be of high quality and visited by a large proportion of our target group.”[4]

A clear distinction has to be made between “real” diversification, with acquisitions in the non-tobacco sector and no links with existing cigarette brands to expand the company’s activities and “tobacco marketing” diversification with the aim of maintaining the images of cigarette brands to serve advertising and marketing purposes of the tobacco sector.

According to a British American Tobacco internal document from 1979:

Opportunities should be explored by all companies so as to find non-tobacco products and other services which can be used to communicate the brand or house name, together with their essential visual identities.  This is likely to be a long-term and costly operation, but the principle is nevertheless to ensure that cigarette lines can be effectively publicised when all direct forms of communication are denied.[5]

The main obstacle to the indirect advertising approach by BAT was the EU Directive.  In confidential notes from 20.-21 May 1991, it was stated that: “Our TMD (trade mark diversification) campaigns are weak and the European advertising ban proposals may make a non-starter out of the Lucky Strike Leisure Wear which is due to start in September.”[6]

While all tobacco companies apply brand stretching techniques, they are not all interested to diversify.  As profits are the highest in the tobacco sector, some companies prefer to stay in these activities.  In the 1993-1997 guidelines of the tobacco company BATco, no clear interest was shown in “real” diversification: “Except where diversification is required to support the tobacco business or where it is part of plans to establish financial services activities in new territories, the aim should be to reduce the level of non-tobacco activities.”[7]

§2 What is the effect of indirect advertising campaigns?

According to tobacco companies or their subsidiaries, the only aim of indirect advertising or “brand diversification” advertising  is to promote non-tobacco products and not the tobacco products.[8]

Tobacco advertising and indirect tobacco advertising share two common characteristics: both use the same brand name and  the same imagery.  All leading cigarette brands, such as Marlboro, Camel or Lucky Strike are known as cigarette brands, based on marketing efforts lasting several decades.  Cigarette brand names have been among the most heavily advertised brand names among all consumer goods.  Marlboro was for several years the brand name with the biggest market value world wide.  The key to branding is recognition of the brand name and the associations that have been built around that name -- the word itself is the most important identifier of the brand.  In a French Court judgement (“Cour de Cassation”) concerning Peter Stuyvesant travel advertisement  on 28 September 1999, it was stipulated that “the brand Peter Stuyvesant is so well known that the name alone is sufficient to mean cigarettes and promote its sales”.  For similar reasons a promotion of travel excursions organised by “Evasion Gauloises Blondes” was condemned by the Belgian Court in November 1992: “There is every reason to believe that this advertisement was conceived and disseminated in order to associate a brand and type of cigarettes with the idea of travel, adventure and physical activity so as to counteract the effect on the consumer of alarming scientific information concerning consumption.”  “This advertising message therefore represents part of a commercial strategy, in which the defendant must have intended, and whose objective was, indirectly and in part, the promotion of tobacco.”[9]  Indirect advertising goes further than using only the brand name.  According to Worldwide Brands Inc. (WBI), brand diversification advertising aims to achieve a transfer of the imagery of the mother brand to the new product.  By using the same name and the same themes, a clear link between indirect advertising and tobacco advertising has already been established.  It seems to be more logical that indirect advertising affects the promotion of tobacco products than not at all.  This is in line with the view of the Belgian Court (Cour d’Arbitrage) in 1999:

“Whatever may be the purpose to market products with the same brand name as known tobacco products, the advertising for these products has the consequence to promote the brand also and can be considered as an indirect way of advertising tobacco products.”[10] 

In Belgium the effect of indirect advertising has been demonstrated with the promotion campaign for L&M.  Philip Morris advertised L&M in the period 1988-98 through advertisements for L&M matches, L&M sound and L&M jeans.  All indirect L&M advertising had the classical L&M theme.  A Belgian Court inflicted PM in 1992 with heavy fines for its indirect matches advertising: “  The box of matches has the same general look, proportions, colours and brand as the packet of cigarettes so as to create for the man in the street an association, if not confusion, between the two products.” [11]  Philip Morris continued its theme advertising with concert and jeans ads and was strongly presented at youth and music festivals promoting its “diversification services and products”.  This campaign was extremely successful as L&M became the second most popular cigarette brand and was smoked by almost one third of cigarette smokers aged 15 to 24 years old in 1997.

Which cigarette brand do you smoke ? ( Belgium, December 1997)

Source: OIVO-CRIOC - SOBEMAP

Market share of Belga, Marlboro and
L & M in the period 1979-1995

	Belga	Marlboro	L & M
1979 1984 1990 1993 1995	28 % 23 % 18 % 16 % 14 %	3 % 11 % 17 % 18 % 20 %	- - 2 % 8 % 10 %

Source :Maxwell reports

§3 What has been the attitude of tobacco companies towards indirect advertising?

 

A)  R. J. Reynolds  and indirect advertising

 

The pioneer of indirect tobacco advertising was the cigarette brand Camel with advertisements for Camel boots, Camel watches, Camel expeditions and Camel Trophy. Camel boots were first launched at the end of the seventies in Germany and were extended to the rest of Europe in the eighties. Camel Boots had some  success in Germany with a market share of 7,5% of the sales of men's shoes in 1995.  This relative success was limited to Germany as some 72% of the total turnover of Camel Boots in Western Europe was made in this country.[12]  The owner of the Camel trade mark is World Wide Brands Inc (WBI), an American company and subsidiary of RJR Nabisco Inc. which is the mother company of the RJR Reynolds Tobacco Company.  WBI has licensed the Camel trade mark to a number of manufacturers such as Salamander for Camel Boots, the Swiss company Efa for Camel watches or the Italian travel agent, Willy Fasio, for Camel adventurer.  The launch of Camel non-tobacco products and services has often coincided with restrictions or bans on tobacco advertising.

 

·         Norway :  When Norway banned tobacco advertising in 1973, the law did not contain provisions to ban indirect advertising as indirect advertising simply did not exist.  The first indirect advertising campaigns started in 1981-82, when the magazine A-Magasinet published three ads for "Camel Boots".  The first ad for instance showed a man in a canoe going down the river "For men who go their own way".  The similarity with the ads for Camel cigarettes was evident: same trademark, same letters, same scenery, same theme (adventure).[13]  The ad was classified as tobacco advertising and prohibited.  A second ad showed a boot in the foreground but kept the logo and the name in distinctive type.  The ad was also prohibited.  A third ad had the boots prominent, but the logo had disappeared and “Camel” was in plain lettering and in a straight line.  The campaign was accepted by the authorities, but discontinued by the company…[14] Due to the increase of indirect advertising , Norway modified its laws and banned indirect advertising in 1995.

 

·         Finland : A similar scenario occurred in Finland, which banned direct advertising for tobacco products in 1976. Camel boots were introduced in Finland in 1983.  In the advertisements for the footwear, the word ‘Camel’ was presented in a similar arched form and in a similar typeface to those in the logo for Camel cigarettes.  A court decision on 30 March 1998 finally prohibited advertisements for Camel Boots.  The Marketing Court in Finland ruled that the use of the word "Camel" and the camel picture in conjunction with the marketing of Camel Boots is contrary to the Act on Tobacco Control.  This ruling maintained the earlier decision by the National Product Control Agency for Welfare and Health (STTV).  The decision prohibits the use of the Camel emblem in a curved form with a font similar to that used in the emblem of Camel cigarettes.  The decision also prohibits the use of a camel picture similar to that of the emblem for Camel cigarettes.  The Marketing Court considered that the marketing of Camel Boots was advertising for footwear.  The mark of a tobacco product that had been used for a long time as the Camel marks and that were well-known by the population had been used in the advertising of Camel Boots.  Therefore the advertising for boots had also conveyed an image of the Camel tobacco product.  The inclusion of an emblem for a tobacco product as a part of the advertising for another product came within the definition of marketing that is prohibited in the Finnish Tobacco Control Act, as this also promotes the sales of the tobacco product. Therefore any advertising with the use of the Camel emblem was directly against the Act.  This is the first case of prohibition of indirect tobacco advertising in Finland that has been upheld in every instance.  It is also the first application of the amended (1995) article prohibiting indirect tobacco advertising.  As in Norway, the tobacco ad ban  was extended in 1994 to include a ban on indirect advertising as research had shown that half of the youngsters were familiar with tobacco products through indirect advertising.[15]

 

·         Sweden : In Sweden tobacco advertising was restricted in 1979.  In the mid-eighties Jambo Tours started selling travel with ads called “ Camel adventurers”.  The classical ingredients of the Camel cigarette advertisements were present: same name, same logo and same scenery  ( a jeep and an adventurer in a “wild nature” environment).  A complaint was filed against these ads and a decision of the Market Court was rendered in 1989.  The Consumer Ombudsman’s view – that the companies were covertly advertising tobacco products- did not prevail.[16]

 

·         France: In the European Union, France was the first country where tobacco companies evolved the art of indirect advertising, in answer to the law of 1976, known as "Loi Veil".  This law only allowed tobacco advertising through graphical or photographical display of the product, its packaging or trade symbol, i.e. only product advertising was allowed.  Advertising for tobacco products could no more be associated with cowboys, glamorous ladies or adventurous travel.  Leading cigarette brands continued their advertising strategy and used the same visuals with the classical cigarette ad themes for advertisements of lighters or matches of the same brand name.  Already in 1983 a court judgement ( Tribunal de Grande Instance de Paris, 10/6/1983) decided that Camel had to stop the advertising of Camel Lighters on billboards, as the Camel Lighters carried the same visual image as the cigarette ads and there was, according to the court, a definitive association between the lighter and the cigarette advertising. The French marketing magazine, "Stratégies" explained in 1984 (Nr 423) the indirect advertising strategy of Camel as follows: "Camel has clearly developed methods of communicating its brand, in spite of legal restrictions. This process occurred in 1982 and Reynolds addressed itself to travel and, above all, adventure, always showing a Camel packet in the background(...) Camel uses lighters as an alibi or Camel Adventure Tours, which achieves and strengthens the image of the brand".  The Loi Evin of 1991 strengthened the provisions on indirect advertising, but did not disarm the tobacco industry. The French Justice Department discovered on 2 February 1995 in the headquarters of RJ Reynolds France internal documents called "World Brands Inc Strategic Plan 1993-1997" which described the way to circumvent legal restrictions by promoting products and services such as Camel Boots, Camel Trophy or Winston Clothes. According to these documents[17], the mission of WBI is described as:“ to identify, to develop and take responsibility for diversification programmes of the brand, to increase the perception and the effect of the image of the  leading brands of RJR Nabisco”. And that “WBI will attack any local or European Community legal restriction, whose validity could be doubtful, through lobbying or, if necessary, through legal action in order to protect its commercial liberty".  In the same documents, the marketing strategy for Camel is “ to target urban males between 18 and 30 years old who are the main market for the values of the Camel target… Construct an attractive image inspired by the “adventurous world of Camel” and made in such a way as to capture Camel's main values of masculinity, individualism and camaraderie by using Camel Trophy articles (….)”  The purpose of the strategy of WBI is “ to set up legal and financial channels which are  totally separated but remain as efficient” stipulating that “the logos should be revised to be slightly different from the cigarette logos”.  Another document “ France 1992-1996 stratégie de communication” 23/1/1992 stipulates:

·         To stop campaigns for cigarettes

·         To concentrate on logo licence activities : Camel Trophy watches, Camel boots, Camel collection, Winston clothes”

         A hand written text on the same document says: “ communication will always be possible, but will become more complex.”

The strategy plan 1992-1996 of RJ Reynolds Tobacco France stresses that “ compared with most of its competitors, RJR France seems to be better prepared to face legal restrictions as a result of the great number of licence activities for the logo ( Camel Trophy Watches, Camel Boots, Camel Collection/shops, Winston clothes) in order to maintain the continuity of the Camel and Winston Communication”.  The same documents stipulates that “ the structure and work organisation of the marketing department should be totally revised to comply with the legal obligations to separate the logo licence activities and the cigarette activities” and stresses the necessity “of a creative approach to legal questions” and to have “ a balance between risks and expected benefits”.

On the basis of all these documents, advertising for Camel Boots and Camel Trophy was condemned  by the French Court on 19/10/1998 ( Tribunal de Grande Instance de Paris)

 

·         Belgium :  Two Royal Decrees in 1982 restricted the content of tobacco ads in Belgium in a similar way to the “Loi Veil” in France.  The reaction of the tobacco companies was also similar.  The first indirect tobacco ad was an advertisement for Camel expeditions in 1982 and the first “Matches” ad was again  Camel  and appeared on billboards at the beginning of 1983 .

 

 

Advertising expenditures for non-tobacco products and services of Camel in the period 1983-1986 in Belgium ( in thousands of Belgian Francs)
1983	Camel Matches        10.062
1984	Camel Matches        12.595 Camel Concert           1.893 Camel Boots              2.240 Camel expeditions     1.207 Camel Trophy          10.561
1985	Camel Matches         22.297 Camel Lighters         28.369 Camel Concert                 91 Camel Boots                    26 Camel expeditions      2.957 Camel Trophy             8.827
1986	Camel Lighters          50.688 Camel expeditions          368 Camel Boots                     43 Camel motocross              29 Camel Trophy              9.485

           Source: Advertising Audit Service

 

         A magazine article in September 1982 described the Camel communications strategy  in the following way: “ Who had heard of Camel-expeditions in Belgium before the first of January 1982? They already existed in France as a result of the tobacco ad restrictions. It was only after the use of people on billboards was banned, that Camel expeditions was launched on the Belgian market. The same letter type as the cigarette brand, the same lay-out and  even the same jungle decor.”[18] 

The indirect advertising budget for all tobacco products was 17 million Belgian Francs in 1983 (10 million for Camel matches and 7 million for Boule d’Or matches), but had risen to 236 million BF in 1984 and 536 million BF in 1989.  The sums spent on indirect tobacco advertising compared to the total tobacco advertising budget ( direct + indirect) rose from 3% in 1983 to 55% in 1989.  The development of indirect advertising in Belgium was clearly linked with the advertising restrictions introduced in 1982.  Matches, for instance, are so inexpensive that large advertising campaigns could hardly prove cost effective.  In 1990 a court judgement (le Tribunal Correctionnel de Ličge) considered that: “advertising (for matches and lighters) obviously aims to promote tobacco sales. That it is said to be aimed to sell lighters or matches is of minor importance, since it is well known that this market share is minimal compared to the market share for cigarettes.”  The judge added that “People are not stupid. They immediately identify the tobacco brand promoted through lighters or matches.”  The law of 10 December 1997 prohibited all direct and indirect tobacco advertising from 1^st January 1999.  A court decision of 30 September 1999 (Cour d’Arbitrage)[19] accepted the view that a ban on indirect advertising was relevant.  “What ever the purpose may be in marketing products with the same brand name as tobacco products, the advertising of these products has the consequence of promoting the brand also and can be considered as an indirect way of advertising tobacco products.”  The court annulled the provisions on indirect advertising for other reasons.  The law authorized exceptions for the ban on direct advertising, such as advertising in international print media,  but not for the ban of indirect advertising.  This different approach for direct and indirect advertising was considered by the Court as unfair and a reason for annulment.  The first company who said publicly that they would take advantage of the annulment of the indirect advertising ban was again Camel.  In ads published in December 2000, the following was announced. “Camel Collection. Camel Boots. Camel Bags.  This will change. As from January 2001 simply say: Camel active.”  The intention was to start a campaign for Camel articles in 2001.

 

·         Turkey: Indirect advertising did not exist in Turkey, until they banned tobacco advertising....[20]  When Turkey banned tobacco advertising in 1997, RJ Reynolds Camel brand came up with a series of advertisements for Camel Trophy "adventure boots" with a typical Camel type adventurer in the picture.  At the same time, RJ Reynolds also published large “price announcements” in the local newspapers which announced that the prices had not changed.  The announcements included the name and the logo of the cigarette brand “Camel” and were presented in the form of a cigarette pack while the law prohibited all advertisement for cigarette brands and its logos.[21]

 

 

B) Philip Morris and indirect advertising

According to a letter from PM International in August 9 1985,

 

“Alibi advertising is important to our business and Marlboro leisure wear, Action wear, or whatever wear can be an important tool.”[22]

 

Marlboro Classics was first launched in Italy  and is a product of Marlboro Leisure Wear which was founded in 1974.[23]  Marlboro Classics clothes are manufactured and distributed by the Italian company Marzotto.  While Marzotto is responsible for the product and the distribution, Marzotto is not independent in its marketing policy for Marlboro Classics.  Philip Morris totally controls the promotion of Marlboro Classics.  To open new markets, Marzotto needs the permission of Philip Morris. Philip Morris EEC has developed strict communication guidelines for Marlboro Classics in all markets, which need to be closely followed.[24] In a 1994 brief PM stipulates[25] :

 

“Marlboro Classics is the only expression of the Marlboro American heritage in certain markets (I.e. : France, Finland)”

“The primary appeal for Marlboro classics clothing is intended to be among urban, white collar males aged 24-35+ with free individual lifestyles that match the Marlboro Classics clothing and image.”

“A key objective is to create ads that tell a story of the American west, via the visuals themselves and/or the copy lines.”

“The story values should communicate a unique expression of the Marlboro western heritage: open spaces, untamed nature, cowboys alone or in group, camaraderie, American authenticity, pioneering spirit, rugged masculinity, timeless values. The challenge is to link these values to the products.”

“While it should express the Marlboro country heritage, Marlboro Classics should not use any cues traditionally associated with Marlboro cigarette advertising, EG: Marlboro cowboys, Monument Valley, chuck wagons, etc.”

The marketing of Marlboro Classics has been linked to the increase of cigarette marketing restrictions.  In a 1987 letter from Marlboro leisure wear to PM International this aspect was clearly underlined:

 

“We have also noticed that several PM affiliates ( Switzerland, France, Scandinavia) are now strongly demanding Marlboro Classics to challenge better the local advertising restrictions.”[26]

 

Philip Morris did take into consideration, in its Marlboro classics brand communication, the legal environment of the different markets.  According to PM, having a different logo from the pack and having no rooftop helped them to win a court case in Finland.[27]  In 1984, despite the Loi Veil of 1976, the risk of losing a court case in France on Classics promotion was considered by PM to be low.  In Sweden, from a tactical point of view, PM was in favour of maintaining a balance between level of sales and measurable marketing expenditures in order to avoid any reaction from the ombudsman and / or anti-smoking lobbies.[28]

 

 

C) The other tobacco companies and indirect advertising

While Camel and Marlboro have been the pioneers of indirect advertising, all leading cigarette brands have followed the same concept.  In Belgium for instance the list of indirect tobacco ads was already impressive in 1989:  Barclay made advertising for lighters and the Barclay team, Bastos for the racing team, Belga for festivals, teams, concerts, shops and matches, Benson & Hedges for Cashmere, Boule d’Or for matches and  the Brussels Trophy, Camel for matches, lighters, expeditions, Trophy and concerts, Claremont for matches, Drum for matches,  Gauloises for “Evasions”, Johnson for  Trophy, teams, the Belgian Grand Prix, and leisure, L&M for lighters and concerts, Lucky Strike for lighters and teams, Marlboro for lighters, teams, adventure teams and classics, Peter Stuyvesant for concerts, Philip Morris for matches, Richmond for matches, Samson for matches and Winston for lighters.

In anticipation of restrictions on tobacco advertising, all tobacco companies around the world have developed the concept of 'brand-stretching' with a view to continuing to advertise their products.

British American Tobacco, for instance, is openly circumventing legal restrictions through indirect advertising by legally promoting their cigarette brand in new ranges of coffee products. The scheme is being tested in Asia by World Investment Company, a company set up by BAT explicitly to develop non-tobacco products to be badged with the names of its cigarettes.  Benson & Hedges Bistro’s have been heavily advertised on television and in newspapers in Malaysia.  The typical B&H golden colours and the brand name are prominently present in these ads, but the  Bistro letters can hardly been seen. David Bacon, head of corporate communications of BAT, said the Benson & Hedges coffee brand was just one of a number of spin-off products being developed by the company. Others include Lucky Strike clothing, John Players whisky and Kent Travel, a travel agency.[29]    According to the tobacco trade journal World Tobacco, such brand diversification would allow tobacco companies to promote cigarettes in Europe after the cigarette ad ban came into force.[30]  BAT has also plans for a retail chain to promote its cigarette brand Lucky Strike.  The stores - to be known as Trans-Urban Trading Co - will sell a whole range of typical American products.  The purpose of this operation is, according to the Wall Street Journal, to squeeze some extra revenue out a well known brand, while at the same time giving the company another avenue to promote Lucky Strike. BAT says it will be much easier to launch Trans-Urban stores in Europe than in the US, where the 1998 legal settlement between the cigarette companies and state governments bars the use – or licensing- of cigarette brand names or logos for anything other than cigarettes.[31]

Tobacco companies will attack any legal restriction in any country on indirect advertising, but accepted on a voluntary basis in the USA a hard line on indirect advertising in the 1998 Minnesota Settlement....

The distinction between direct and indirect tobacco advertising is no more relevant.  Current practice is to advertise 'brands' rather than' products'.  A branded ad can advertise both boots and cigarettes simultaneously, while mentioning neither.  Legislation that does not deal with this fact of advertising life will be useless. [32]

Summary

·         The aim of indirect tobacco advertising is to promote or to reinforce the impact of the brand name  and its theme.  Indirect tobacco advertising includes those advertisements for non-tobacco products and services bearing the same name as well known tobacco brands and using  the same advertising techniques and “lifestyle” content as tobacco brands.

·         Indirect advertising has nothing to do with the diversification policy of tobacco companies.  A clear distinction has to be made between “real” diversification, with acquisitions in the non-tobacco sector and no links with existing cigarette brands to expand the company’s activities and “tobacco marketing” diversification with the aim of maintaining the images of cigarette brands to serve advertising and marketing purposes of the tobacco sector.

·         Tobacco advertising and indirect tobacco advertising share two common characteristics: both use the same brand name and  the same imagery.  All leading cigarette brands, such Marlboro, Camel or Lucky Strike are known as cigarette brands, based on marketing efforts lasting several decades.  Cigarette brand names have been among the most heavily advertised brand names among all consumer goods.  By using the same name and the same themes, a clear link between indirect advertising and tobacco advertising has already  been established.  It seems to be more logical that indirect advertising affects the promotion of tobacco products than not at all.  This is in line with the view of the Belgian Court (Cour d’Arbitrage) in 1999:  “Whatever may be the purpose to market products with the same brand name as known tobacco products, the advertising for these products has the consequence to promote the brand also and can be considered as an indirect way of advertising tobacco products.”[33] 

·         In Belgium the effect of indirect advertising has been demonstrated with the promotion campaign for L&M.  Philip Morris advertised L&M in the period 1988-98 through advertisements for L&M matches, L&M sound and L&M jeans.  This campaign was extremely successful as L&M became the second most popular cigarette brand and was smoked by almost one third of cigarette smokers aged 15 to 24 years old in 1997.

·         The pioneer of indirect tobacco advertising was the cigarette brand Camel with advertisements for Camel boots, Camel watches, Camel expeditions and Camel Trophy.  Camel boots were first launched at the end of the seventies in Germany and were extended to the rest of Europe in the eighties.  The launch of Camel non-tobacco products and services in Norway, Finland, Sweden, France, Belgium and Turkey coincided with restrictions or bans on tobacco advertising

·         The French Justice Department discovered on 2 February 1995 in the headquarters of RJ Reynolds France internal documents called "World Brands Inc Strategic Plan 1993-1997" which described the way to circumvent legal restrictions by promoting products and services such as Camel Boots, Camel Trophy or Winston Clothes.  According to these documents[34], the mission of WBI is described as: “to identify, to develop and take responsibility for diversification programmes of the brand, to increase the perception and the effect of the image of the  leading brands of RJR Nabisco”.  And that “WBI will attack any local or European Community legal restriction, whose validity could be doubtful, through lobbying or, if necessary, through legal action in order to protect its commercial liberty”

·         Another example of indirect advertising is Marlboro Classics: The marketing of Marlboro Classics has been linked with the increase of cigarette marketing restrictions.  In a 1987 letter from Marlboro leisure wear to PM International this aspect was clearly underlined:  “We have also noticed that several PM affiliates ( Switzerland, France, Scandinavia) are now strongly demanding Marlboro Classics to challenge better the local advertising restrictions.”

·         In anticipation of restrictions on tobacco advertising, all tobacco companies around the world have developed the concept of 'brand-stretching' with a view to continuing to advertise their products.  British American Tobacco, for instance, is openly circumventing legal restrictions through indirect advertising by legally promoting their cigarette brand in new ranges of coffee products.  The scheme is being tested in Asia by World Investment Company, a company set up by BAT explicitly to develop non-tobacco products to be badged with the names of its cigarettes.

·         Tobacco companies will attack any legal restriction in any country on indirect advertising, but accepted on a voluntary basis in the USA a hard line on indirect advertising in the 1998 Minnesota Settlement.

·         The distinction between direct and indirect tobacco advertising is no more relevant.  Current practice is to advertise 'brands' rather than ‘products'.  A branded ad can advertise both boots and cigarettes simultaneously, while mentioning neither.  Legislation that does not deal with this fact of advertising life will be useless