Action on Smoking and Health (London) press release

Embargo:Thursday 1st November 2001

Indiscreet stock analyst reveals truth about tobacco companies' newinternational marketing code - it's a sham

Atobacco stock analyst has privately revealed that a global marketing codeproposed by BAT, Philip Morris and Japan Tobacco International is a sham -designed to improve their image, head off legislation, but without anymeaningful restraint on tobacco marketing.

Thevoluntary code [view]has been announced with much hype and public relations, but critics such as ASHdismissed it as meaningless and ineffective - aimed at sidetracking theWHO tobacco convention. Now it has emerged that Bonnie Herzog, Wall Sttobacco analyst for Credit Suisse Group, agrees.  In a research note obtained by ASH [view] she reassuresinvestors as follows:

"We have analyzed the 9-pageagreement and believe that the multinationals' strategy is proactive and is away to improve their image. These international marketing standards partly cameas a result of increasing pressure from governments worldwide and anti-smoking activists.Also, by proactively setting new international tobacco marketing standards, themultinationals could be trying to counter a number of proposals that the WHOhas been working on to curb the amount of cigarettes that are consumed on aninternational level.

”One would think that the elimination of certain marketing practices wouldeffectively decrease advertising spending and hence increase margins, howeverwe believe the modest amount the multinationals actually spend on these typesof practices will be redirected into other types of marketing promotions i.e.,point of sale activity.

Commentingon this support from this unexpected source, Clive Bates, Director of Action onSmoking and Health said:

"When Wall Street isreassuring investors that this voluntary marketing code is no threat tobusiness as usual for the tobacco multinationals, then it's time to consign thewhole sordid initiative to the waste bin.

"As lifegets harder for them in the West, the tobacco companies are aggressivelytargeting developing countries and Eastern Europe.  The shareholders need to be reassured that nothing will stop therelentless search for new customers.

“The tobaccoindustry has always been a reliable backer of measures that will not work butlook good.  There is no evidence thatthe measures proposed in their code will work, and plenty of evidence that theonly way to deal with tobacco advertising is to ban it completely.

“One of thebiggest threats to the international tobacco industry is that governments willcome together under the auspices of the WHO and introduce a global ban ontobacco advertising.  This voluntarycode was designed to derail the WHO convention and mislead governments.

“For the UK weneed legislation that bans tobacco advertising completely.  The government has disgraced itself bydithering over legislation that on its own figures would save 3,000 lives and£40 million of NHS expenditure each year.

Notes:

[1]The code is available at the British American Tobacco web site www.bat.com

[2]The analyst's report is on the ASH web site at www.ash.rg.uk/html/advspo/pdfs/csfb.pdf 

[3]The next meeting of the WHO Convention is 22-28 November in Geneva. The ASHbriefing on this is at www.ash.org.uk/?international

[4]The UK tobacco advertising legislation could be rescued by the House of Lords -the second reading of a private members bill (Lord Clement Jones L-D) is 2^ndNovember.

Contact: Clive Bates +44 20 7739 5902(w)  +44 77 6879 1237(m) - ISDN available