[Intl-tobacco] USA Today: Intl tobacco company circumvention of ad bans

[Robert Weissman]

Page 1B
12 September 2000 
Cigarette logos abound despite ad bans abroad Tobacco companies let other
businesses use their brand names 
By Julie Schmit
USA TODAY 

KUALA LUMPUR, Malaysia -- For seven years, Malaysia has banned most forms
of tobacco advertising, including print, TV, radio and billboards.

But it sure doesn't look like it:

* Billboards with the Salem, Benson & Hedges and Winston names dot the
landscape. They're not advertising cigarettes, per the ban. They're
advertising their travel, clothing and restaurant businesses.

* The music store, Salem Cool Planet, has seven outlets in Malaysia. The
store also sponsors concerts, which are then advertised in newspapers and
on TV and radio.

* On television, consumers see the name Perilly's, a cigarette brand owned
by British American Tobacco (BAT), as a movie sponsor.

* Shoppers can browse 15 Camel clothing stores, book holidays at two Peter
Stuyvesant Travel outlets and dine at four Benson & Hedges Bistros, the
first of which opened in 1998.

''The companies have found loopholes in the law, and we have not plugged
them,'' says H.J. Sallehudin, an assistant director of Malaysia's
Department of Public Health, which enforces Malaysia's tobacco ad bans and
recently urged the government to tighten the restrictions.

Malaysia isn't unique. Tobacco companies have long licensed their
well-known names to sell non-tobacco products throughout the world. Camel
shoes and Marlboro Classics clothing are especially popular in Europe.

But anti-smoking advocates say Malaysia offers one of the best examples of
how bans on the direct advertising of cigarettes can be circumvented with
indirect advertising that ties the cigarette names to fashion, lifestyles,
sports and music. They also fear that what works in Malaysia could be
exported to other countries in Asia, which is home to half of the world's
population and is a potentially huge market for tobacco companies. China
alone has an estimated 320 million smokers, more than all developed
countries combined.

''The indirect advertising has gotten more and more sleek'' in Malaysia,
says Mary Assunta, an anti-tobacco activist with the Consumers Association
of Penang.

The marketing of the Benson & Hedges Bistros provides an excellent
example, she says. Located on a busy Malaysian highway, the billboards
include only part of the Benson & Hedges name and an accentuated
ampersand. The word ''bistro'' is in small letters. As the Nike swoosh has
come to identify Nike, the ampersand may someday identify Benson & Hedges,
marketers say.

''Give them five years, and red will mean Marlboro and blue will mean Mild
Seven,'' says Bill Tye, 30, a Kuala Lumpur marketing executive who was
dining one recent evening on an outdoor patio of a Benson & Hedges Bistro.  
Good business or a come-on?

Tobacco companies contend that licensing their names to non-tobacco
products simply makes good business sense and that it isn't intended to
encourage smoking. ''We are not gaining market share because there are
Salem Cool Planet record stores,'' says Axel Gietz, spokesman for Japan
Tobacco International, which now owns the international operations of
Camel, Salem and Winston cigarettes. ''It is a good way of capitalizing on
the image of the brand. This is perfectly legal.''

Most often, the tobacco companies license use of the cigarette name to
other companies. The Salem Cool Planet record stores, for instance, exist
only in Malaysia and are owned by a company named Ultimate Vista, Gietz
says. Japan Tobacco licensed the Winston Eagle name to another company,
which has 33 of the men's clothing outlets in Malaysia. Despite fears
among consumer groups that Malaysia is a test bed for marketing
techniques, Gietz says Japan Tobacco has no plans to export the licensing
scheme to other countries.

Likewise, the Benson & Hedges Bistros aren't run by BAT, which sells
Benson & Hedges cigarettes in Malaysia. They are run by Heritage Network,
a management company. When questioned, BAT responded in writing that the
''Benson & Hedges Bistro is managed and operated as a separate business
entity.'' Yet BAT pays for the bistro's billboard and newspaper
advertising, says Kevin Lai, Heritage's marketing manager. BAT -- whose
Malaysian Tobacco unit has about 70% of the Malaysian market -- refused
further comment.

Industry watchers say much of what is being tried in Asia wouldn't fly in
the USA. ''They would get more grief than it would be worth,'' says John
Calfee of the American Enterprise Institute in Washington.

In Asia, anti-smoking groups are less organized. Lawsuits are less common.
Smoking is widespread in some countries. The smoking rates of men in
China, Vietnam and Cambodia are 66%, 73% and 65% respectively. As smoking
declines in the USA and tobacco companies get slammed with lawsuits,
developing countries hold promise. Even young Asian women are lighting up
more often. The rate of smoking among teenage girls in Malaysia, for
example, is growing at 2% a year.

What's more, awareness about the dangers of smoking isn't as high in Asia,
says Judith Mackay, director of the Asian Consultancy on Tobacco Control.
In China, a 1996 survey found two-thirds of respondents didn't know
smoking was linked to lung cancer.

Tobacco names have also long been used on non-tobacco products outside the
USA. Camel apparel dates to the 1970s. The Marlboro Classics clothing line
is 13 years old. Neither has ever been sold in the USA.

In 1998, U.S. tobacco companies, as part of a lawsuit settlement with 46
states, agreed not to sell tobacco-branded caps, T-shirts and other
merchandise. But Camel and Marlboro Classics are thriving abroad.

Worldwide, Camel has 98 stand-alone stores and 451 shops within other
shops. Last year, revenue hit $572 million after 10 years of double-digit
growth, says Jean-Louis Leppert, spokesman for Worldwide Brands, which
owns the Camel brand for non-tobacco products.

Philip Morris licenses the Marlboro Classics name to clothing company
Marzotto Spa of Italy. Last year, Marlboro Classics raked in revenue of
about $250 million. The merchandise is often adorned with a logo of a
cowboy in a rain slicker -- just like the Marlboro Man. But Philip Morris,
in a written response, says that Marlboro cigarettes and Marlboro Classics
are separate trademarks and that the Marlboro Classics trademark
communicates ''the quality and value of the clothing, not the quality and
value of Marlboro cigarettes.''

Effectiveness of bans debatable

Anti-smoking advocates concede that even weak advertising bans reduce
exposure to tobacco brands. In Cambodia, where no restrictions exist, 46%
of street advertising in the capital city of Phnom Penh is tied to
tobacco, says Po Samnang of the Ministry of Health.

Whether the bans work to reduce smoking is less clear.

A study published in 1993, which analyzed 27 years of data and is often
quoted by tobacco companies, concluded that adults in countries with ad
bans smoked slightly more than adults in countries without bans.

The researchers surmised consumption might have gone up because health
warnings disappeared along with the ads. But a recent World Bank report
says that comprehensive ad bans reduced smoking by about 7% in high-income
countries.

''If the (bans) didn't work, the tobacco companies wouldn't waste their
time trying to stop them,'' says Stanton Glantz, professor of medicine at
the University of California and a longtime tobacco critic.