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A report from the

Non-Smokers’ Rights Association

and Smoking and Health Action Foundation

March 2009

The marketing of tobacco products in Canada: Increased advertising in 2008/09

Time Magazine, December 8, 2008

Eye Weekly, March 12, 2009

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The regulatory environment for tobacco advertising In Canada, tobacco advertising and promotion are regulated by the Tobacco Act. The Act was passed in 1997, but amendments were introduced the following year to gradually phase out tobacco sponsorship promotion. The Act’s constitutionality was upheld by the Supreme Court of Canada in 2007 following a long legal battle initiated by the tobacco industry. The Act sets out a ban on advertising and promotion, with specific exceptions. Since the end of tobacco sponsorship in 2003, only information and brand-preference advertising is permitted in publications with an 85% adult readership, in direct mail to adults and in places where children are not allowed by law (i.e. bars). Furthermore, these ads cannot contain any information that is misleading or likely to create an erroneous impression about the product. They also cannot appeal to kids and be associated with any lifestyle imagery. The Tobacco Products Information Regulations were also introduced in 2000, which makes it mandatory for all tobacco products sold in Canada to display illustrated health warnings on their packages, warnings which cut in half the available space on packages to display tobacco trademarks. New warnings are expected in the near future which may shrink trademarks even further. In 2006, the Competition Bureau reached an agreement with the three main Canadian tobacco manufacturers to discontinue the labelling of their tobacco brands with the misleading descriptors “light” and “mild”. Unfortunately, these descriptors were quickly replaced by other misleading terms such as medium, rich & smooth. At the provincial level, Quebec’s Tobacco Act imposes further restrictions on tobacco product advertising and promotion. Only information advertising is allowed in publications with an 85% adult readership and at tobacco retail outlets. However, since retail outlets are not one of the permitted venues under the federal statute, tobacco advertising in Quebec is only possible in publications with an 85% adult readership. Furthermore, any illustration of a tobacco package cannot exceed 10% of the ad’s surface. In 2008, the Quebec government took a step further by adopting regulations limiting the size and placement of tobacco ads in publications and requiring them to display a health warning in the top left quarter. Finally, with the exception of Newfoundland and Labrador, all provinces and territories have banned tobacco displays in retail outlets because they gradually became the tobacco industry’s main promotional tool following the implementation of the advertising and promotion restrictions of the federal Tobacco Act.

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The tobacco industry’s response to the advertising and promotion restrictions Over the past year, there have been few reports of sustained tobacco advertising or promotional activities in adult venues such as bars across Canada. As well, there was no indication that the tobacco industry engaged in massive mailings to households to advertise its products. The industry seems to have focused its marketing efforts mostly on trademarks, packaging, advertising in print publications and promotion at retail outlets. In print publications, they have been extensively appearing in free entertainment weeklies such as The Georgia Strait, the Ottawa Xpress, the Mirror, The Coast, Eye Weekly and in magazines such as People, Time, FQ, etc…

As shown later, these ads are usually in colour and take up a full page. To foster their good corporate citizen image and likely to try and preempt stricter mandatory warnings, the industry even inserts at the bottom of each ad a voluntary text health warning. In spite of the regulatory environment, the industry has carefully crafted its ads so that they appear much more like lifestyle advertising instead of just conveying information on its products’ characteristics to the consumers. For example, the industry continues to make extensive use of slogans such as “Nothing tastes quite like a Belmont” or “Quality is in the details” to convey the message of a superior product. Such slogans obviously do not offer consumers any factual information. Manufacturers are also integrating stylish background designs in their ads which make their products far more attractive. Finally, different font styles are being used to evoke some form of imagery with the brand.

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1. Trademarks According to the Canadian Intellectual Property Office, a trademark consists of words, symbols and design features that distinguish one brand/product from another. It has been a common practice for tobacco manufacturers to gradually modify tobacco trademarks throughout the years.  Trademarks are the foundation upon which the tobacco industry builds the identity for each of its brands of tobacco. According to marketing experts such as Richard Pollay, a retired marketing professor from the University of British Columbia, “there are not many meaningful physical differences between competing brands of cigarettes.” Since it is no longer legal to associate lifestyle imagery with a brand of tobacco, it is not surprising that the tobacco industry is currently attempting to accentuate the visibility of its brands as much as possible through innovative trademark designs. In the current context, it becomes even more critical for tobacco manufacturers to select bright colours and develop appealing designs to attract consumers’ attention to the brand. In turn, these designs become the main billboard for promoting the brand in advertisements currently appearing in publications. This strategy also counteracts the effect of the health warnings. It is our opinion that the tobacco industry will continue to rely on such a strategy for as long as there are no new regulatory constraints.

Recent and former packs of Player’s and Peter Jackson cigarettes

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2. Package Design

The traditional slide-and-shell package of 25 cigarettes, which long dominated the Canadian market, is rapidly being replaced by fliptop packs of 20 cigarettes and more innovative package designs, such as the Player’s ‘slide-pack’ and the du Maurier Signature Pack. A key purpose of these new packages is to generate a novelty effect among consumers. Such designs also have the deliberate effect of increasing the visibility of the tobacco trademarks by decreasing the size or visibility of the health warnings. For example, by opening the new Player’s pack, the slide increases the overall size of the brand image. No doubt the creative minds of the tobacco industry will come up in the near future with other innovative pack designs to distinguish their tobacco brands.

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3. Print Advertising

As mentioned earlier, of the three remaining available options to advertise tobacco products in Canada, tobacco manufacturers have clearly demonstrated their preference for print publications. Over the past year, print tobacco ads are not only appearing more frequently but they are also turning up in an increasing number of different publications. The health community is concerned that some of these publications, such as weeklies which target young adults and youth, may not reach the mandatory 85% adult readership. One important observation is the fact that JTI-Macdonald products have not been advertised in 2009. The company was very active over the past two years in promoting the launch of several new tobacco brands, such as Aria, Mirage and Fusion. Instead, there is far more advertising activity this year from the other major tobacco manufacturers (Imperial Tobacco, Rothmans, Benson & Hedges and the U.S. Smokeless Tobacco Company).

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As explained earlier, these ads clearly demonstrate the importance of trademarks and packages to attract the reader’s attention to the tobacco product. These ads also incorporate subtle designs such as the selection of a specific font type, the layout of colours surrounding the packages, the packs’ reflection from the table surface and the brand logo reproduced repeatedly in the background, which could easily be interpreted as signs of quality, distinctiveness, class, elegance, style, refinement, etc… Furthermore, some of the messages, such as “Nothing tastes quite like a Belmont” or “Smoother taste by design” fall much more in the category of slogans instead of factual information. It would be quite a stretch to claim that these are just information or brand preference advertisements.

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Smokeless Print Ads

These three smokeless tobacco ads are pushing the envelope even further in terms of what is permitted under the federal Tobacco Act and the Quebec Tobacco Act. In the previous cigarette advertisements using different font types, background colours and slogans, the tobacco industry is stretching the boundaries of the law. In these three cases, we believe that the smokeless tobacco industry is clearly overstepping these boundaries. Indeed, by integrating images of a concrete wall, a wooded panel or a torn metal screen in the background, the smokeless tobacco industry is attempting to associate images of ruggedness, rustic surroundings and strength with its products. Such images can be quite appealing for male teenagers and young adults. It is difficult to view these ads as anything else but lifestyle advertising.

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Imperial Tobacco is also continuing with its efforts to advertise its du Maurier brand of snus oral tobacco in its two test markets - Edmonton and Ottawa. According to scientific research, snus is probably the least harmful tobacco product currently on the market. When the company launched the product in Alberta in 2007, its CEO explained that “the responsible thing to do is to seek out and offer products that may substantially reduce the health risk.” Unfortunately, the product is not being promoted to consumers as a safer alternative to cigarettes, but instead as a substitute when smokers cannot “light up”. Once again, the tobacco industry fails in its obligation to adequately inform consumers of the relative risks of its products. The company’s decision to market snus with the du Maurier brand could also be an attempt to promote its other tobacco products in the same brand family. However, it might simply be to take advantage of the brand’s popularity to attract consumers to try snus. Quebec Tobacco Print Ads

Usually, the tobacco industry opts for full-page coloured ads and inserts a voluntary health warning at the bottom. This is no longer permitted in Quebec. As shown earlier in the three smokeless tobacco ads, new regulations introduced in 2008 have made it mandatory to insert a health warning which covers the top left quarter of all tobacco ads. The example on the left also shows that tobacco ads have been limited to a maximum size of 400 cm2. All tobacco ads in any print publication must be placed on the same page or on successive pages and are prohibited on the first, second, or last pages. Despite these new regulations, the industry still values the importance of promoting its products.

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Health Warnings on Packs One important observation is the fact that tobacco manufacturers are selecting the packages with the least disturbing of all the 16 federal mandatory health warnings in their advertising, in order to increase the visibility of their trademarks. For example, the warning “You’re not the only one smoking this cigarette” frequently appears on the packs in tobacco ads rather than the more graphic and much more threatening warnings, such as “Cigarettes cause mouth disease” (see print cigarette ads on pages 5 and 6). More recently, the tobacco industry has taken the trademark visibility strategy a step further in their ads by having the fliptop of some of its packs open so that the illustration section of the health warning is not visible (see advertisements below). This marketing strategy provides more evidence that the health warnings system is quite an effective tobacco control policy.

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4. Package Advertising Another sign that the package is the industry’s most precious advertising vehicle for promoting its products is a brazen move by Imperial Tobacco to advertise directly on a pack of cigarettes. Imperial Tobacco is using du Maurier packs to promote other members of the du Maurier brand family (see illustration below left), the ‘Smooth Taste’ and ‘Fine Taste’ members. In this example, we believe that such a practice is illegal since the federal Tobacco Act clearly permits advertising in 3 venues only, and the package is not one of them. Imperial Tobacco is also using the available space on its du Maurier packs to promote even further the characteristics of the brand family, such as the number of times the tobacco found in its products is cut per inch (see illustration below right). Imperial Tobacco has even added a website address on the pack: www.dumaurier.ca.

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5. Accessories Accessories are a common vehicle for promoting brands of consumer products. Over the years, the tobacco industry made extensive use of accessories such as baseball caps or sport jackets to increase the visibility of its most popular brands, especially when it was allowed to sponsor cultural and sports events. Under the current federal regulatory environment, tobacco product-related brand elements are only permitted on tobacco accessories, which are defined as “a product that may be used in the consumption of a tobacco product, including a pipe, cigarette holder, cigar clip, lighter and matches.” However, the promotion of these accessories is subject to the same restrictions as for tobacco products themselves. The matchboxes below are examples of current promotional efforts by Imperial Tobacco which focus not only on brand elements but also on package designs. It is important to point out that accessories displaying a tobacco product-brand element are forbidden under the Quebec Tobacco Act.

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6. Retail Promotion

Retail outlets before and after tobacco display ban.

As mentioned earlier, the tobacco industry seems to focus part of its current marketing efforts on promotion at retail outlets. Initially, such a statement might sound odd since all provinces and territories but one have banned tobacco displays in retail outlets. However, despite the onslaught of provincial display bans, the tobacco industry actually increased its payments to retailers in Canada from $74M in 2001 to $108M in 2007. Since tobacco products are out of sight, one might wonder what other possible options remain to the industry to promote its products in retail outlets. The tobacco and retail industries have coined the term the ‘dark market’ to describe such a situation and view it as a marketing challenge instead of an insurmountable obstacle. The tobacco industry is investing more in options such as improving the communication between the clerk and consumers because it believes it will help maintain category sales in a ‘dark market’. Manufacturers are now relying on pay-for-performance programs where the retailer will receive higher rewards for selling more of their brands of tobacco products.

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Conclusion This report clearly shows once again that the tobacco industry is truly not interested in just conveying factual information on the characteristics of its products to its customers. It continues to deceive consumers by trying as much as possible to wrap its products in an attractive graphic portrayal, which either violates the strict guidelines set out in the Tobacco Act or circumvents, at the very least, the spirit of the law. This proves once again how the tobacco industry can never be trusted to fully comply with the law and how policy options such as a total ban on advertising and promotion or generic packaging should be seriously considered.