[Intl-tobacco] Russia Might Further Restrict Ads, Including Tobacco Advertising Ban

[Robert Weissman]

Russia Might Further Restrict Ads, Including Tobacco Advertising Ban
by Jeanne Whalen / jeanne.whalen@wsj.com
Source: The Wall Street Journal Interactive Edition, Friday, 2/9/01

MOSCOW -- Russia's Parliament gave preliminary approval to tough new
restrictions on advertising, including a complete ban on tobacco ads, that
advertisers and media say would clobber their already feeble industries if
signed into law.

The ad bans were passed in a first reading by Communist and other
left-leaning deputies who say advertising has irritated Russians and has
caused too many children and teens to start smoking since free markets
began in 1991.  Advertisers claimed that the government opposes the ad
bans, a hope bolstered when a deputy press minister gently criticized the
bans during debate.

The legislation must pass two more readings in the lower house before
being sent to the upper house and then to President Vladimir Putin for
final approval.

The Russian ad market grew 45% last year after 1998's financial crash and
is valued at a meager $1.1 billion (1.18 billion euros).

Deputies voted 258 to 75 to support a ban on tobacco advertising in print
media, on billboards and on public transport. Russia banned tobacco
advertising on television in 1996. Health experts say smoking and drinking
have played a big role in Russia's declining life expectancy, which
dropped by one year in 1999 to 65.5 years. Russian men are among the least
healthy in the industrialized world, with an average life expectancy of
59.8 years.

Legislators also voted 275 to 73 to support amendments to the Law on
Advertising that would outlaw television commercial breaks during films,
educational programming and some live broadcasts. Many Russians complain
that ad breaks are intrusive, particularly during serious films. "A film
is a work of art -- nobody would think of going to the theater during a
performance of 'The Seagull' and putting on some kind of advertisement,"
said deputy Anatoly Greshnevikov.

The loud volume of advertising incensed other deputies. "What are you
doing to our ears?" Communist lawmaker Gennady Seleznyev asked. "Just
imagine how [viewers] are jumping up to turn down the volume on ads."

Media, advertisers and ad agencies sharply oppose the proposed bans but
said the laws must travel a long path before they are signed into law.
"The Duma passes many laws in first readings," said Vladimir Aksyenov, a
spokesman for British American Tobacco in Moscow. But he added that
"tobacco is a legal product and it has the right to advertise."

Tobacco marketers spent $27 million on outdoor and print advertising in
Moscow in 2000, or 4.2% of total ad expenditures in those categories,
according to Gallup AdFact, which tracks ad spending.

Russian media have always struggled financially but were especially hard
hit by the August 1998 financial crash, which caused the advertising
market to plummet by about 70% in dollar terms. Ad spending began to
recover last year but is still only half the level of spending in Poland,
for example. Deputy Press Minister Mikhail Seslavinsky asked legislators
to give the ad market some time to get back on its feet before enacting
new restrictions on advertising.

Chris Renaud, chief financial officer at national television channel NTV,
estimated that a ban on commercial pauses during films could hurt NTV's ad
revenue by 5% to 10%. Other television professionals have predicted bigger
losses.

Market research does indicate that advertising increasingly irritates
Russians.  A survey of 28,000 Russians conducted last year by two
advertising associations found that 72.5% didn't like advertising,
compared with 68.6% in 1999, according to daily newspaper Vedomosti.
Another survey found that 41% of Russians believe advertising is useful,
compared with 90% in Egypt, 80% in Poland and 74% in Latvia.

The Advertising Council of Russia said it was "deeply concerned" about the
attempts to enact "unfounded bans on advertising ... without consideration
of the socioeconomic consequences."