Multinational tobacco companies are hammering out a voluntary pact,
which could lead to a dramatic shift in their global marketing
communications strategy and pull the plug on billions in sponsorship
dollars.
Tobacco giants such as Philip Morris and British American Tobacco (BAT)
are said to be in talks to end all forms of mass market communications,
including sports sponsorships and POS campaigns, industry sources
said.
The bid to become more socially responsible could result in a drastic
reduction in their adspend, impacting lead tobacco agencies such as Grey
Worldwide and Bates, which work on BAT, and Leo Burnett on Philip
Morris.
Sources said cigarette manufacturers expect to have an "industry-wide
self-censorship" agreement in place by September, after which their
marketing focus would switch to customer relationship and
permission-based marketing activities.
These could include the organisation of smokers-only events for the sole
purpose of enticing consumers to change brands. It is understood that
the aim of the new strategy is to help the industry become more socially
responsible at a time when it faces several class action lawsuits and is
liable for billions of dollars in compensation claims. Said a source:
"These lawsuits are occurring in the west but we could see these
happening in Asia soon."
Sources said all the major multinational tobacco companies are involved
in the talks. The fear is if one player acts irresponsibly, the entire
industry would be tarred with the same brush. "This means that their
argument that they are helping to advance the cause of sports through
sports sponsorships, for example, isn't cutting it any more," said a
source. "Given all the allegations against them about targeting youths,
the third world and so on, they have to be seen not be increasing their
overall market share."
