Select Committee on Health Minutes of Evidence

Memorandum by British American Tobacco

THE TOBACCO INDUSTRY AND THE HEALTH RISKS OF SMOKING (TB 28)

ADVERTISING AND CONSUMER PROTECTION

  266.  British American Tobacco believes that cigarette advertising does not cause people to take up smoking. Simply put, cigarette advertising has two purposes—to maintain brand loyalty and to encourage smokers to switch brands. We believe that smoking is and should be an adult choice; therefore, it is our policy that advertising and marketing are not directed at minors, and all advertising programmes and promotional activities are conducted in a responsible manner. Our advertising is focused upon building brands which we hope adults who have chosen to smoke will decide to purchase over competitors' brands. The suggestion that the cigarette industry aims through its advertising to replace the smokers who stop smoking is not based on evidence, and demonstrates a failure to understand the role of advertising, particularly in a mature market for products such as cigarettes and washing powder.

The purpose of cigarette advertising

  267.  Advertising and marketing play an important role for any manufacturer in communicating with customers about its products. They provide consumers with the product information needed to make informed choices. Indeed, this is an essential feature of a free market and a free society.

  268.  British American Tobacco manufactures a broad range of high quality cigarettes. Advertising is developed to portray to the consumer the attributes of a particular brand that make the brand a preferred choice over its competition. Cigarette advertising may focus on aspects of the product such as quality or superiority in taste or other brand values. Such communications are an important means of maintaining brand loyalty and encouraging switching from competitive brands. Essentially there is no difference between brand advertising for tobacco products and for other mature consumer products.

  269.  In a market where a single market share point may be worth many of millions of pounds in sales advertising is critical to retain the loyalty of current customers and to attract consumers from competing brands.

Advertising in a well established product category

  270.  In a well established product category, such as that for cigarettes, coffee, or washing powders, there is universal consumer awareness of the long-standing existence, basic characteristics and availability of the product. The reason that the manufacturers of coffee and washing powder advertise is to communicate the reasons for choosing their brand rather than a competitor's brand. Similarly the basic choice to smoke will arise from a variety of societal and cultural factors. Once the choice to consume is made, the decision of which cigarette to purchase is based on price, availability and the attributes of the brand as portrayed by advertising and packaging.

  271.  Advertising in a well established product category also allows for innovation—lower tar cigarettes, instant coffee, or biological washing powders—that introduces a new idea, usually initiated by consumer demand, to existing consumers.

Advertising and consumption

  272.  Cigarette advertising does not cause people to smoke. As the US President's Council of Economic Advisors stated in 1987:

"There is little evidence that advertising results in additional smoking. As with may products, (cigarette) advertising mainly shifts consumers among brands." (Economic Report of the President, 186, 1987).

  273.  There is much evidence to suggest that there is no direct link between tobacco advertising and total tobacco consumption. This proposition is based both on the examination of consumption trends in countries with or without advertising bans and overwhelming evidence from research into the relationship between tobacco advertising and consumption. For example, a 1993 study examining data on annual tobacco consumption in 22 OECD countries from 1964 to 1990 concluded that advertising bans, where they existed, did not reduce consumption. (Stewart MJ, "The Effects on Tobacco Consumption of Advertising Bans in OECD Countries," International Journal of Advertising, 12: 155-180, 1993). In addition, a 1996 study of the tobacco industry and advertising in the EU concluded that:

"advertising bans on tobacco products do not reduce consumption of tobacco products . . . advertising bans have significant impacts on economics where they are put in place in terms of lost employment, income and tax revenue" (KPMG, "The Tobacco Industry and Advertising in the European Union", p 4, 1996).

  274.  The Department of Health issued a report in October 1992 entitled "Effect of Advertising and Tobacco Consumption: A Discussion Document reviewing the Evidence" (the "Smee" Report), following a commitment in the Government's "Health of the Nation" White Paper of July 1992 to review this issue. The overall conclusion of that report was that the structure of the tobacco market in the UK could cause advertising to be used to increase the size of the market. In response to the Smee report, the UK tobacco companies requested Henley Marketing Dynamics International to prepare an independent review of the document.

  275.  The review of the Smee Report was written by Dr Laurence W Hagan of Henley Marketing Dynamics International and was published in January 1993. The overall conclusion was that:

"the analysis undertaken in the Department of Health (Smee) report does not justify its findings. The evidence presented is limited, its analytical approach is flawed, and the conclusions advanced are invalid. The Department of Health have not satisfactorily demonstrated that tobacco advertising has an effect on consumption, or that advertising restrictions and bans have reduced consumption where they have been applied." (Hagan LW, "A Review of Effective Tobacco Advertising and Tobacco Consumption", p iii, January 1993).

  276.  A Gallup survey in the US, published in May 1993, reported reasons why people decided to start smoking. Some 65 per cent reported that they started due to peer pressure. Not one reported that cigarette advertising was the reason that they began smoking (Thomas RM, Larsen MD, "Smoking Prevalence, Beliefs and Activities", 1993 AAPUR Annual Convention, The Gallup Organisation, May 1993).

  277.  More recently, in September 1995, the Supreme Court of Canada concluded, following a review of a great deal of evidence from many countries and expert testimony, that:

"there was no direct evidence of a scientific nature showing a causal link between advertising bans and decrease in tobacco consumption" (RJR-MacDonald, Inc v Attorney General of Canada, 127 DLR 4th, 1, p 91, 1995).

Advertising to market segments

  278.  British American Tobacco's advertising responds to patterns of consumer demand among adult smokers for different types and brands of cigarettes. This has sometimes been mischaracterised as "targeting" of particular consumer groups. British American Tobacco takes pride in knowing its customers well and, in a competitive market, we want consumers to choose our brands over those of our competitors. The pejorative claim of "targeting" segments of the population through cigarette advertising misrepresents the fundamental way we do business. As with other types of consumer product, different types of people might want different things. Having gained the knowledge, we make a product best suited to that existing demand, then develop the advertising best suited to portray the attributes of that brand.

  279.  The "targeting" claim also implies that particular groups of consumers are incapable of making their own decisions and need to be "protected" by censors. This attitude is patronising and paternalistic, and is also not supported by the evidence. For example, smoking among women has been increasing in a number of countries where cigarette advertising is banned (eg Norway—Götestam, KO and Götestam, KG "Smoking and Attitudes Toward Smoking in Norway," Tiddskr Nor Laegeforen, 1990, 17 (110): 2260-1), while decreasing in others where cigarette advertising is permitted (eg the UK).

Cigarette advertising and under-age smoking

  280.  British American Tobacco believes that smoking should be entirely limited to adults. It is British American Tobacco's policy that advertising, marketing and promotions should not be directed at minors.

  281.  However, it is important to recognise that advertising does not cause an under-age person to take up smoking. Research has repeatedly shown that smoking by family members and peers are the most significant influences on an under-age person's decision to start smoking. For example, a 1987 study in Canada found that the number of smoking friends and the percentage of older siblings who smoked were "consistent and powerful" predictors of future smoking (Moore TE, "Antecedents of Smoking Onset in Children and Adolescents: A Review", Department of Psychology, Glendon College, York University, Toronto, Canada, p 19022, 1987).

  282.  A 1991 study of 11-15 year olds in the European Community found consistent influences toward smoking across cultures. (Rabier J, "Young Europeans and Tobacco: A Sample Survey of 11-15 year olds in the Member States of the European Community," in the 44 ESONAR Marketing Research Congress, 363-387, Luxembourg 1991). Peer group environment was the most significant factor in the decision to smoke, followed by family environment, interaction with friends, schooling, and several other factors.

  283.  In a review of various studies carried out by Colin McDonald, a member of the Marketing Research Society, the author concluded:

"From evidence quoted in the studies themselves, it can be demonstrated that, even if advertising can lead children to smoke (which can neither be proved or disproved), it is likely to be an influence of only minor importance, and much less relevant than other factors such as family environment and peer pressure." (McDonald C, "Children, Smoking and Advertising: What does the Research Really Tell Us?" p 291-299, 1993).

  284.  In countries where cigarette advertising has been banned there seems to be little or no impact on under-age smoking incidence. A study carried out in 1997 by Professor Pal Kraft and Terje Svendsen of the Norwegian National Council on Smoking and Health, for example, found that despite having had a ban on advertising since 1975 and public smoking bans since 1988, young smokers of ages 16-19 had, since the late 1980s to 1995, increased to the level of 44 per cent, the same as in 1977 ("Tobacco Use Among Young Adults in Norway 1975-95: Has the Decrease Levelled Out?", Tobacco Control, 1997).

  285.  These findings underpin our view that it is peer pressure and family behaviour, not advertising, which are the key determinants influencing someone's choice to take up smoking.

  286.  British American Tobacco does not advertise in magazines or other forms of communication directed specifically to those under-age—to do so would be both wrong and commercially irrelevant. Our brands are developed to meet the expectations of adult smokers and we are strongly of the view that those under-age should not smoke.

Advertising and regulation

  287.  British American Tobacco supports regulations properly designed to prevent false and misleading advertising. The content of advertising must be accurate to permit consumers to make informed decisions and to ensure fair trading conditions for producers.

  288.  Freedom of commercial speech is a basic principle of open markets. Freedom of information has been enshrined in various international treaties, including the European Convention on Human Rights. When overturning the ban on tobacco advertising in 1995, Canada's Supreme Court declared that a ban:

"deprives those who lawfully choose to smoke of information relating to price, quality and even health risks associated with different brands." (RJR-MacDonald, Inc v Attorney General of Canada, 127 DLR 4th, 1, p 91, 1995).

  289.  Restricting or banning advertising impairs the ability of manufacturers to communicate with their customers. Consumers receive information from many sources and, as a result of advertising restrictions, may not receive complete or adequate information about products to enable them to tell manufacturers what types of products they prefer. As the US Supreme Court stated, in a free market system, consumer decision making must be intelligent and well-informed and, to that end, "the free flow of commercial information is indispensable". (Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc, 425 US 748, 765, 1976).

  290.  Competition is the foundation of a free market. Bans or restrictions on advertising stifle competition within a market, and discourage improvements in product quality.

  291.  Advertising provides consumers with the information needed to make informed choices. British American Tobacco believes that cigarette advertising maintains brand loyalty and encourages adult consumers of competitive brands to switch to our products. Cigarette advertising does not cause people to start smoking. Further, it is our belief that youth should not smoke. Thus, it is our policy that advertising and marketing are not directed at minors.

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Prepared 28 February 2000