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SOUTH AFRICA: “A PROCESS OF PERSUASION LEADING TO CONVERSION THAT WOULD LEAVE MOST RELIGIONS GASPING"
All articles written by David Simpson unless otherwise attributed. Ideas and items for News analysis should be sent to: firstname.lastname@example.org
The prominent display of tobacco products at retail outlets is now the only avenue available for tobacco companies to promote brand imagery and awareness in countries with tobacco advertising bans. Both Canada and Iceland have banned retail displays, as the high visibility of tobacco products both tempts and reminds people to smoke and provokes impulse buying.
On the other hand, retail associations and others opposed to a ban claim the display itself has no real effect on people’s buying patterns. However, evidence that it does comes from a case that has recently been before the Competitions Commission Tribunal in South Africa.
Japan Tobacco International (JTI) and British American Tobacco South Africa (Batsa) are locked in a legal battle amid accusations that Batsa spent "hundreds of millions" of Rands in clandestine deals with retail outlets to ensure that they either exclusively stocked or prominently displayed Batsa’s brands, while hiding JTI’s brands below the counter or behind frosted glass. Batsa has 93% of the South African market, JTI 4.7% and Phillip Morris about 1%.
Initially, when the case began, Batsa claimed that these were the actions of aggressive sales reps eager to make extra commission. JTI countered that Batsa had ignored its many complaints and that this was a planned national strategy and not just sales mavericks or rogue forces.
In later evidence to the Tribunal, Batsa revealed how it used supermarkets, cafes, vehicle filling station stores, hotels, restaurants, bars and nightclubs, to crush the opposition. Batsa’s national key account manager, CP Terblanche, admitted that Batsa blocked competitors from displaying cigarette dispensers at certain outlets and gave businesses millions in cash “inducements” each year to preferentially market its brands.
JTI claimed in its submission that Batsa had ordered retailers to remove the products, point-of-sale material and signs of competitors from their premises and insisted that its brands be exclusively stocked or be given preference in terms of visibility and availability. In addition, Batsa is alleged to have demanded that JTI brands be placed out of sight—either in “Camel drawers” under the counter or behind frosted glass—and that it had required retailers to follow a "planogram" that detailed the layout of cigarette counters and where specific brands were to be placed. Batsa’s key brands were to be displayed in a "face on" position, JTI claimed, while its rival's brands were to be placed in an "end on" position.
Advocate David Unterhalter, on behalf of JTI, told the tribunal that Batsa dominated the vendor machines in clubs as a way of targeting young adults to convert them to becoming smokers. “There is a process of persuasion leading to conversion that would leave most religions gasping”, Unterhalter reportedly stated.
Batsa retorted that JTI had “chosen to make a small investment in its promotional budget, and complains that it is being outmarketed.”
The hearings are due to continue in early May 2008, when Batsa will bring on its witnesses. It faces a fine of up to R1.4 billion (£106 million/US$206 million) or 10% of its annual turnover. In 2005, the Competitions Commission found Batsa guilty of anti-competitive and restrictive business practices and referred the matter to the Tribunal for adjudication. In 2004, British American Tobacco was found guilty of similar transgressions in Brazil and was fined US$500 million (£257 million).
National Council Against Smoking, South Africa
SPAIN: FINAL PUSH FOR CLEAN AIR
It has been two years since the enactment of the law on measures for smoking prevention in Spain. The law was enacted after wide political and media debate over most of the year 2005 and has become a turning point in tobacco control. Its main components were a total ban on tobacco promotion, a drastic reduction in the number of points of sale and a ban on workplace smoking (except outdoors), with exemptions for the hospitality industry, prisons and psychiatric facilities. As it came into force fiscal changes were also adopted, effectively raising the price of the cheapest cigarette brands, although the price of premium cigarettes in Spain is actually lower than in neighbouring Portugal and France. In addition, more resources were made available for tobacco control and reimbursement schemes for effective drugs now exist in the health service for people who want to stop smoking in the Navarra and Rioja regions. Thus, overall, tobacco control action has increased.
Evaluation of the process took place at the recent meeting of the national coalition, CNPT, in Castello, and in a workshop in Barcelona, providing opportunities to put together different studies and sources of information. The data show a very effective reduction in population exposure to environmental tobacco smoke, both from perception surveys and from environmental monitoring studies using either carbon monoxide or nicotine. Compliance in the hospitality sector seems to vary across the country, where some regional governments are not keen to enforce a law drafted by the central government and approved by the national parliament but which they themselves did not seek: an important lesson for federal or quasi-federal countries. Direct and indirect advertising has disappeared from the streets, printed media and radio, though there is strong evidence of more subtle promotions taking place, especially in the film and music industries.
Cigarette sales showed a modest decrease in both 2006 and 2007 but estimates of sales to residents suggest a 12% decrease in 2006 (an estimated 40% of total sales in Spain are made to tourists and other short-term visitors). Population based surveys in 2006 suggest the previous decline in prevalence has been maintained and has even accelerated, especially for men. Preliminary local data in Barcelona suggest an 11% decrease in the rate of hospitalisations due to coronary heart disease in 2006, compared with previous years.
As elections for the Spanish Parliament were approaching in March 2008, the smoking prevention movement, organised around CNPT, was developing action to put smoking control back on the political agenda. Its main objectives focus on extending the smoking ban to all bars and restaurants, increasing taxation (Imperial Tobacco taking over Altadis should make that easier) and expanding support for smoking cessation.
JOAN RAMON VILLALBI
PHILIPPINES: STRING OF MARLBORO PACKS
Many countries have seen tricks being used by tobacco companies to try to get new smokers among those with very low budgets, and to keep them smoking, by making cigarettes available in small, affordable packs, especially where the sale of single sticks is banned. The companies usually maintain that such packaging is in response to customers' demands and solely for their convenience. A new variant of small packaging turned up in the Philippines recently, with the appearance of a string of mini-packs of Phillip Morris's flagship brand, Marlboro.
The strings of four packs, each containing five cigarettes, are similar to strings of shampoo sachets popular in some countries, where it is convenient to hang a string in the shower, tearing one off as required. Some confectionery is sold this way in the Philippines, too. Each pack of five sticks, which is made of foil like the packaging of certain snack foods, retails for 7.50 pesos (10 UK pence/18 US cents).
The law covering tobacco tax requires that cigarettes packed by machine must only be packed in twenties. When the Marlboro mini-packs are sold to retailers they have a clear plastic band around each set of four packs, complete with very small print saying, "20 class A cigarettes". This obviously circumvents the law, even though the poster advertising them quotes the price as "7.50 per 5 sticks". According to a leading health advocate, if one asks to buy a pack, the retailer will hand over a pack of five and not the entire bundle of 20. To compound the impression of what is really intended, they are typically to be seen at small community "sari-sari" or variety stores as a string of packs hanging from a stretched wire, from which also hang strings of shampoo sachets, strings of biscuit packs and the like.
WORLD: NEW WHO REPORT
In February 2008, the World Health Organization launched the first-ever comprehensive analysis of global tobacco use and control, a report funded by the US charity, Bloomberg Philanthropies. Known as MPOWER, it establishes a benchmark by which to measure future progress.
The report confirms that the global tobacco epidemic is one of the greatest public health threats of modern times; that the tobacco epidemic is entirely preventable; and that the means to curb the epidemic are clear and within reach. Yet no country in the world has reached the gold standard highest rating for action taken.
Summarising the current status of tobacco use and control in 179 countries, the report comes up with alarming statistics. The epidemic is shifting toward the developing world; only 5% of populations are covered by comprehensive smoke-free laws; about 95% of tobacco users do not get help to quit; and only five countries have comprehensive pack warnings. In addition, it finds that just 4% of populations are protected by complete bans on tobacco advertising, marketing and promotion; only four countries have tax rates >75% of retail price; and tobacco control funding is much less than for HIV/AIDS, which kills far fewer people than tobacco.
The key messages of the report are that virtually every country needs to do more; countries are not alone in combating the tobacco industry; and the World Health Organization's Framework Convention on Tobacco Control provides a global consensus. It provides six proven strategies to drive down tobacco use, noting that the tobacco industry opposes MPOWER because it will work and that tobacco hurts—not helps—national economies. Lastly, it affirms that smoking in public places is not a right…whereas breathing is.
MPOWER stands for Monitor tobacco use and prevention policies; Protect people from tobacco smoke; Offer help to quit; Warn about the dangers; Enforce bans on tobacco advertising, promotion and sponsorship; and Raise taxes on tobacco.
The solution is in our hands. MPOWER can be accessed at: http://www.who.int/tobacco/en/
Asian Consultancy on Tobacco Control; World Lung Foundation
WORLD: NEGOTIATIONS START ON A SMUGGLING PROTOCOL
Less than 10 years ago it would have been unbelievable but global tobacco control has taken on the illicit tobacco trade. Previously the responsibility solely of customs, finance and law enforcement officials, illicit trade is now going to be regulated by a protocol being negotiated as a supplementary treaty to the World Health Organization's (WHO) Framework Convention on Tobacco Control. Work started on 11 February 2008, when representatives from more than 150 countries met in Geneva, Switzerland, to begin negotiations. This protocol has the potential to decimate illicit trade in tobacco, a massive global problem that undermines efforts to reduce tobacco use and save lives, helps fund organised crime and terrorist organisations and costs governments billions in revenue.
Price increases by governments through taxation are undermined by the illicit trade in tobacco, which makes well-known international brands available at much lower prices. This is a critical health problem because evidence shows that increasing the price of tobacco products is one of the most effective ways to reduce tobacco consumption.
Illicit tobacco trade primarily encompasses the smuggling of tobacco industry-manufactured and counterfeit cigarettes. Tobacco is the world’s most widely smuggled legal consumer product. The Framework Convention Alliance has estimated that in 2006 illicit trade accounted for 10.7% of global cigarette sales or about 600 billion cigarettes. The illicit tobacco trade is estimated to cost governments more than US$40 billion (£21 billion) annually in tax revenue. This is greater than the gross domestic product of two-thirds of the world’s countries.
The global scope and multifaceted nature of the problem requires a coordinated international response. Negotiations have begun on the basis of a template developed by a WHO expert working group. This contains a comprehensive set of measures, both domestic and international, to tackle the illicit trade. The template includes marking tobacco products so they can be tracked and traced from manufacture to point of sale, so that illicit products, including counterfeit items, can be identified. It also includes licensing of participants within the supply chain to ensure they can be monitored effectively and risk losing their licences if they are found to be dealing in illicit products. The template includes obligations on manufacturers to control the supply chain for their products, with serious financial penalties for those that fail to do so. In addition, enhanced law enforcement and international cooperative measures, such as cooperation in investigation and prosecution of offences, information sharing, mutual legal assistance and extradition arrangements, would enhance the ability of governments to work effectively together to overcome the illicit trade. The plan is to have a new treaty containing such measures adopted in 2010.
The tobacco control community has been instrumental in the development and implementation of a strong WHO Framework Convention on Tobacco Control. The new challenge is whether they can be as effective in tackling illicit trade.
Senior Policy Advisor, Framework Convention Alliance
Action on Smoking & Health, London, UK
JAPAN: TURNING PACKS INTO GOLD
Recent advertisements by Japan Tobacco show gold bars being offered as a prize for the return of empty packaging. Mild Seven and other brands have participated in the offer, which rewards those who collect their pack numbers and send them to the company. Trips to Dubai and other attractive rewards, including electronic goods, are also offered. The term Smart Smoke has been seen in Asia over a number of years, reportedly used also by other tobacco manufacturers. Health advocates are concerned about the positive perception of smoking that the term may convey.
USA/WORLD: NEW ONLINE RESOURCES
An extraordinary collection of old film and television cigarette advertisements has been converted to digital format and put online by Roswell Park Cancer Institute (RPCI) in the USA. This easy to navigate website, a real goldmine for anyone interested in the development of tobacco promotion, albeit requiring a suspension of disbelief when viewing some of the items (http://www.tobaccovideos.com). RPCI has also launched its new tobacco products website, which includes pictures of tobacco products with an emphasis on so-called reduced exposure products and other weird and not so wonderful nicotine delivery products (http://www.tobaccoproducts.org).