Tobacco giants to cut sponsorships

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."

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