CHINA:Cash cow on its last breath() (fwd)

[Robert Weissman <rob@essential.org>]

Cash cow on its last breath
by CAROL HOLMES 
Adweek Asia (9147) 
Date: Friday, 2/12/99

As restrictions on cigarette advertising take hold across Asia, tobacco
firms are being forced out of sports sponsorship. Finding new sponsors with
deep pockets is proving an uphill battle for sports promoters.


The news last month that Pepsi is the new sponsor of the Chinese National
Football League (CNFL) replacing five-year sponsor Marlboro marks a shift
in emphasis for tobacco sponsored sports events in Asia. But along with
the change of image comes a change in money ?? the sums the cigarette
brands were paying are being replaced by smaller figures from more conventional
advertisers.

As legislation on tobacco promotion tightens across the region, (see
table) it is becoming increasingly harder for tobacco companies to justify
huge sponsorship deals if they are prevented from media exposure. To ensure
their survival the challenge is on for sports marketers to either find alternative
sponsors or to find creative ways around restrictions.

Philip Morris's decision to pull out of the CNFL came as no shock to
the industry. "We successfully completed a five year agreement as the
title sponsor of the Marlboro Soccer League," says media relations
manager at Philip Morris Asia, Eliot Cohen.

Pepsi, who stepped in as CNFL's sponsor, says the deal is in line with
its global association with football, although its strategy is to sponsor
players rather than events. "Soccer is one of the biggest sports in
the world and this region," says marketing director Asia Pacific at
Pepsi, Matthew Kichodhan. However, Kichodhan says sponsoring one-off events
does not fit Pepsi's strategy, which is bad news for promoters.

"Most events are broadcast on cable and satellite which tends to
be very male-skewed, whereas our target is broader," says Kichodhan.
"A well-targeted 30-second ad featuring our sponsored players makes
more marketing sense than one advertising board among 20 other boards on
a field that may or may not get television exposure."

Chinese soccer may have been saved but tennis has not been so lucky.
Hong Kong has already lost one tournament - the Marlboro Open, which ended
last year - while the future of ATP event the Salem Open is up in the air.

"The decision to discontinue sponsorship of the Marlboro Championships
was very difficult," says Cohen. "In the end, however, we believed
that Hong Kong legislation restricting tobacco sponsorship would not allow
us to promote the event in the way we believe such a world-class event deserves
to be promoted."

The search for replacement sponsor for Marlboro has so far proved fruitfuless
although the fixture was replaced this year by the Women's Super Power Cup
without a title sponsor, supported by the tennis patrons association and
donations.

"An event like this costs two-and-a-half to three million [HK] dollars,"
says director of Ken Catton Enterprises, Brian Catton, the promoter of the
Marlboro Open. "Even during good economic times it's difficult to find
other sponsors who are willing to commit the kind of money needed to stage
these events. Unfortunately event sponsorship often comes way down the hierarchy
of marketing options."

RJ Reynolds is believed to have similar reservations about the Salem
Open in Hong Kong as anti-tobacco advertising legislation that comes into
effect in Hong Kong at the end of 1999 will effectively prohibit promotion
of the event.

"We will review our plans for next year's [Salem Open] based on
the achievements in 1999 and the sponsorship opportunities within the frame
of the advertising restrictions," says vice president external relations
and general counsel at RJR, Francois Stettler.

Managing director of the Salem Open's promoter Spectrum, Linclon Venancio
says the event will continue with Salem or an alternative sponsor. As a
past supporter of tennis, Heineken is rumored to be a possible replacement.

Around the region the story is pretty much the same although cigarette
companies are looking at ways around legislation. In India, the Indian Tobacco
Company (ITC) sponsored Gold Flake Open tennis moved from Delhi two years
ago to Madras in the face of restrictive anti-tobacco legislation in the
capital. Brand Wills, which has traditionally sponsored the Indian cricket
team, got around tightening legislation by launching a parallel sports wear
brand called Wills Sport and continues to sponsor cricket.

"Tobacco brands are being forced to move away from traditional sports
sponsorship into new and more creative ways of self-promotion," says
head of production at sports program-maker TWI, Peter Hutton.

Japan Tobacco's brand Mild 7 has gone out of the traditional sports arena
with the Mild 7 Outdoor Quest in China, choosing adventure sport as its
new image. While advertising laws on tobacco are restrictive, China does
allow limited tobacco sponsorship and Mild 7 stages the event in rural areas
which, hopes the Chinese government, will benefit from the exposure.

In the end cigarette companies must rethink their strategies to exist
in an ever restrictive climate.

"The big brands such as Marlboro and BAT's 555 are moving away from
aerobic sport into motor sport and events for which the threat of American
legislation is not as high," says Hutton.		
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3:27 AM on 2/18/99