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5.15 pm
Mr. Atkinson: On the impact of illegally imported tobacco and tobacco products, is it not true that although the most popular rolling tobacco in this country is Drum, it is not legally available anywhere in this country? If a
legitimate business--unconnected with tobacco--was also called Drum, what would happen to it? Such a business could be caught by the measure.
Mrs. Spelman: I thank my hon. Friend for that question. I am not the ideal person to answer it--that is for the Government. However, as the Minister is engaged in another conversation at present, she will be unable to answer my hon. Friend's question, unless someone can give her a note of it.
My hon. Friend's point is important. There will be many more such examples. Surely we should encourage tobacco companies to diversify--possibly by making a new name for themselves in completely different markets.
Through amendment No. 46, the Government are trying to come some way towards meeting the Opposition on the matter. However, that amendment falls far short of the assurances that we seek from them. It reads like wishful thinking. It says that the Government "may" make an exception for companies as regards brand sharing. That will not be good enough for companies such as I have described. Those companies have already made a significant investment in changing their names and symbols, only to be told that that will not protect them.
The amendment does not offer sufficient assurances to such companies. They would prefer provisions such as our new clause, which would redress the balance by moving away from the rough justice that would be meted out under the Government's brand-sharing proposals and their rather weak effort to provide scope for exceptions, if they are so minded. There is no clear statement in the Bill of the circumstances in which the Government might be prepared to grant such exemptions. That will be subject, once again, to regulation. Yet again, a controversial aspect of the Bill is being kicked off into the long grass. The matter will be subject to regulations. When? We do not know--at some point in the future.
Meanwhile, the harsh reality is that a company such as Worldwide Brands International has to carry on its business. Will it be guilty of an offence? Will it have to go to court to prove that it has made an effort to alter its logo, and that the new logo is no longer similar to the original logo associated with tobacco products? Will such a company have to go to all that expense while the Government make up their mind whether to make an exception for it?
The amendment is far too vague. It offers insufficient reassurance to companies that have made a real effort to comply with the original European directive. They have followed to the letter the advice of the Advocate General; they believed that such advice might logically apply if a member state decided to go it alone down the road originally intended for the directive. Instead, however, those companies have been left confused. It is that confusion and lack of clarity that our new clause attempts to address. That is why I commend it to my hon. Friends.
The Minister for Public Health (Yvette Cooper): I begin by responding to some of the concerns expressed by the hon. Member for Meriden (Mrs. Spelman). She referred
to some of the broader issues that arise on brand sharing--a matter on which we held a detailed discussion in Standing Committee.
Mr. Ian Bruce: The detailed discussion consisted of exchanges between the hon. Lady and my hon. Friend the Member for Meriden (Mrs. Spelman) that lasted less than 15 minutes.
Yvette Cooper: I have to tell the hon. Gentleman that the Government offered more time for debate in Committee, and if the Opposition had wanted to, they could have taken up that offer. The point that he makes about the time that was available in Committee is, frankly, inappropriate.
If brands are distinct, they will not be covered by the regulations on brand sharing. We have made it clear that our intention is not to catch all products that share the same name, and we are certainly very sympathetic to the need to support business diversification. If the intention is not to promote a tobacco product, the firm involved should have no problem with distinct branding. We have declared our intention to consult in detail on the regulations, because this a complex subject and the companies involved will want time to make representations. That is important.
The wording of new clause 4 would create all kinds of problems. It would exclude from the scope of the regulations on brand sharing arrangements in which no financial link existed between the brand company and the tobacco company, and in which the primary purpose of the new branded goods was not to promote a tobacco product. A company could easily argue that its primary purpose was not to promote a tobacco product; it would argue that its primary purpose was to promote a product--trousers, boots, or whatever--but its secondary or alternative purpose might include promoting tobacco products. It would certainly be inappropriate if the Bill were to state that a company would be covered by the provisions on brand sharing only if its primary purpose was to promote tobacco products.
Another problem with new clause 4 is that the Opposition insist that the companies must be "totally unconnected financially", but it is not clear what that phrase means. For example, would a wholly owned subsidiary be included? Would it include arrangements in which no corporate links existed between companies but directors from, for example, BAT were shared or sat on the board of another company in a non-executive capacity? Would it include a publicly quoted company with a tobacco company as a major shareholder?
I ask all those questions because of the evidence that has emerged, especially in litigation in the United States, from tobacco companies about their attempts to use brand sharing as an alternative way to promote tobacco products and, where necessary, to try to create different legal and perhaps corporate separation between the companies, but where the aim is still to promote tobacco products. For example, a document from RJ Reynolds that emerged during the US litigation states:
- "In the context of a total advertising ban on direct and indirect advertising as of January 1993, communication continuity is undoubtedly 'The' issue to be solved during the plan period.
- The only remaining tool is logo license activities provided they are marketed by a company financially and legally distinct from a tobacco company".
- "In order to fulfil its mission, logo licence will be operated as diversification business in line with the respective brand positioning statement. This will be achieved a) through a separate legal entity, b) with consumer relevant products/services/events, c) owning registrations of international trademarks in pertinent categories d) being profitable within an economically reasonable period and"--
- "e) attracting the cigarette brand's target group."
The hon. Member for Meriden referred to the European convention on human rights. We have made it clear that the Bill is compatible with the convention. The Advocate General did not consider the Bill or evidence on brand sharing when he pronounced on the European directive. He did not make a decision on a point of principle and concluded that there was sufficient evidence on direct advertising to justify the directive, which he did not think was in conflict with article 10. There is enough evidence, especially on children's familiarity with brand sharing products and the links between brands, for it to be clear that the Bill is also compatible with the convention.
Government amendment No. 46 will clarify the Bill so that firms that comply with, and trade their products under, brand sharing regulations do not get caught by any of the Bill's other provisions, such as those in clause 2. That is not the intention of the regulations. If a company's products--whatever they might be--are acceptable under the regulations, the amendment ensures that they will not unintentionally be affected by the provisions on advertising. It will make the arrangements easier for businesses.
We have set out our intention to consult on the regulations. My right hon. Friend the Secretary of State made it clear on Second Reading that we want to do that as soon as possible and to begin the process during the Bill's passage through Parliament. We also want to consult our European partners because European issues, too, are relevant. We will also discuss the appropriate time scales for the introduction of the regulations.
Mr. Bruce: Has the hon. Lady sent draft regulations for consultation--and if not, why not?
Yvette Cooper: The draft regulations have not been published for consultation, but they will be produced at the earliest possible opportunity, as we have made clear several times.
There are plenty examples of business diversification. For example, Philip Morris owns Miller beer. Those are distinct brands and it is clear that there is no brand sharing. We are keen to promote brand sharing, but we also want to ban tobacco advertising and prevent companies from using brand sharing as a way round the ban.
The regulations will be subject to detailed consultation. We have made it clear that we do not intend to cause problems for brands that are distinct from tobacco brands. I urge the House to accept Government amendment No. 46 and reject new clause 4 and amendment No. 51.
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