A brief to the Standing Senate Committee on
Energy, the Environment and Natural Resources
Presented by Francis Thompson
Policy Analyst
June 8th, 2000
One of the important aspects of Bill S-20 is that it puts the tobacco industry’s publicly stated position on youth smoking to the test. As you all know, the industry has consistently claimed that it is opposed to underage smoking, that it does not market its products to children, that smoking is an “adult choice” and that tobacco companies will co-operate with anyone who wishes to make tobacco products less accessible to minors. For people who work in public health, these claims ring hollow: we have seen too many advertising campaigns that appear to target children and too many industry marketing documents discussing the perceptions of teenagers.
Rather than concentrate on these specific examples, I would like to concentrate on the big picture: the structural reasons why tobacco companies are driven to focus their marketing energies on young people.
The Economics of Youth Smoking
- Less than one-third of smokers (31%) start after age 18.
- Only 5% of smokers start after age 24.
— “Younger Adult Smokers: Strategies and Opportunities,”
R.J. Reynolds Tobacco Company Marketing Department, 1984.[1]
Tobacco addiction has been described as a pediatric disease, because an increasing percentage of smokers (roughly 80% in Canada in 1994) take their first cigarette before the age of 18. Moreover, as the U.S. Surgeon General noted in a 1994 report on youth smoking, “People who begin to smoke at an early age are more likely to develop severe levels of nicotine addiction than those who start at a later age.”[2] As Health Canada noted in a study released in January of this year, 35% of Canadian smokers aged 15 to 17 report having smoked their first cigarette by the age of 12.[3]
What is more, brand loyalty develops early in a young person’s smoking career, so that even marketing efforts that actually are designed to promote brand-switching are inevitably likely to be skewed towards young people. As RJR put it in the early 1980s, “Even if a brand falls from grace among younger adult smokers, the increasing consumption rate of the aging franchise can carry the brand’s performance for years, thus extending its life cycle.”[4]
Please note that RJR, like tobacco companies around the world, regularly uses the euphemism “younger adult smoker” to refer to underage smokers.
Now, before anybody suggests that the economics of youth smoking are somehow different in Canada than in the United States, let me just provide a few examples from Canada.
A 1982 document obtained by the B.C. government from British-American Tobacco files in Guildford, England, discusses Canadian market trends in detail. The document notes the wide discrepancy between the number of smokers who intend to quit in the near future (about 40%) and the low percentage who actually succeed (1.8% in 1981). This overview also includes the following passage about starters:
Our information on starting is limited since we do not conduct research with people under the age of 15. However, all of our data and especially starting rates among people over the age of 15 suggest that starting is up since the ’76 launch of “lights.”[5]
Incidentally, even in 1976, it was illegal to sell cigarettes to 15-year-olds in Canada.
In 1985, an Imperial Tobacco document described a “Problem” faced by the Canadian tobacco industry (see Appendix A):
Profit growth has camouflaged the reality that Canadian cigarette smokers are increasingly less enchanted with being smokers… Despite short-term upturns (eg. via “lights”), fewer and fewer Canadians will smoke in the future… Although we have historically done things which had an influence on the size of the total industry, these efforts have not been co-ordinated, planned and fully integrated into our “normal” activities… Something’s got to change![6]
There are only two significant ways to influence the overall size of the tobacco industry. One is to convince worried smokers not to quit, for example by offering them ‘health reassurance’ cigarettes such as so-called ‘light’ cigarettes as the ‘next best thing to quitting.’ The second approach is to step up efforts to recruit new smokers, who will overwhelmingly be underage. The record indicates that Canadian companies have tried both.
Imperial Tobacco has been far more successful than its competitors at attracting new smokers, as Imasco[7] Chairman Purdy Crawford reported proudly to his colleagues from BAT companies in other countries in October 1988:
I.T.L. [Imperial Tobacco Limited] has always focused its efforts on new smokers believing that early perceptions tend to stay with them throughout their lives. I.T.L. clearly dominates the young adult market today and stands to prosper as these smokers age and as it maintains its highly favorable youthful preference.[8]
Indeed, Imperial’s share of the Canadian cigarette market has gone from slightly over one-third in the mid-1970s to around 70% at present.
Finally, let me quote from a particularly telling document dated August 1991, a “Switching Analysis” by Imperial Tobacco’s Market Analysis Group. Two things jump out from this document. As you will probably hear again in a few minutes, tobacco companies have consistently maintained that their marketing efforts are directed only towards encouraging adult smokers to switch brands. So how does Imperial Tobacco define “switchers” for its internal “Switching Analysis”?
When we talk about a switcher we are talking about someone who has been smoking his usual brand for less than 12 months. The definition includes starters (did not smoke before) and smokers that had no regular or particular previous brand.[9]
In other words, by a linguistic sleight of hand, Imperial Tobacco re-defined underage starter smokers as brand “switchers.”
Later in the same document, the author explains why young people are so important to Imperial Tobacco’s marketing department:
Trends show us that switching decreases with age. In 1990 the annual switching rate among smokers aged under 25 is double the switching rate of total smokers (20% versus 10%) and more than three times the switching rate of smokers aged 35 and over (6%)… Young smokers experiment with different brands when they start smoking and after age 25 they settle for a particular brand… Therefore, if our trademarks are relevant to smokers under 25, they will choose our trademarks/brands and remain with them well past the age of 25.[10]
Even if tobacco companies actually attempted to target their marketing efforts exclusively at 18- to 25-year-olds who already smoke, it is hard to see how this could be done without making cigarettes more attractive to underage non-smokers or experimental smokers. Moreover, the financial incentive to recruit underage smokers more effectively than the competition is overwhelming.
Marketing to Youth
Given the strong economic incentive for tobacco companies to recruit underage smokers, what evidence is there that Canadian tobacco companies have actually gone out and done so? The courts examined this issue in some detail in the early 1990s, when the tobacco industry challenged the federal Tobacco Products Control Act. I would just like to quote a brief passage from the Supreme Court of Canada decision in 1995 that overturned large parts of that legislation:
Perhaps the most compelling evidence concerning the connection between advertising and consumption can be found in the internal marketing documents prepared by the tobacco manufacturers themselves. Although the appellants steadfastly argue that their marketing efforts are directed solely at maintaining and expanding brand loyalty among adult smokers, these documents show otherwise.[11]
One of the notorious examples was Project Plus/Minus, conducted by Kwechansky Marketing Research Inc. in 1982 on behalf of Imperial Tobacco. This study examined in great detail why children experiment with cigarettes, how they begin to smoke, and how they become addicted. A few quotes from the study highlights to give you a flavour of the detailed work involved:
Serious smoking mainly starts in the 14-18 age group. It is entirely social in nature, and is heavily dependent on actual or perceived peer group pressure and the desire to conform…
Starters no longer disbelieve the dangers of smoking, but they almost universally assume these risks will not apply to themselves because they will not become addicted…
Once addiction does take place, it becomes necessary for the smoker to make peace with the accepted hazards. This is done by a wide range of rationalizations…
The desire to quit seems to come earlier than before, even prior to the end of high school… However, the desire to quit, and actually carrying it out, are two quite different things, as the would-be quitter soon learns…
Apart from the Player’s, Export and du Maurier parent brands and first-echelon extensions, there was very little regard for other brands. The likes of Matinée, Rothmans and Peter Jackson were without any positives among young smokers. Belvedere and Craven were better, but not by much.[12]
In short, in 1982, Imperial Tobacco’s marketing consultants were explaining in detail how young people get taken in by the glamour of cigarettes — a process that was seen as very positive indeed for the company. “The single most popular brand, and the one that seems to have become the customary badge among young males in particular, but among females very commonly too, was Player’s Light. That this brand went from introduction to this incredibly lofty posture in so relatively few years is truly a marketing success story.”[13]
Imperial Tobacco was not a passive participant in the glamorization of Player’s Light among young people. From the taste and the nicotine delivery to the package imagery and the image positioning through advertising, the brand was made to systematically appeal to young people, in particular young males. The emphasis was on autonomy, on outdoor activities of interest to this age group, such as skiing and kayaking:
The activity shown [in advertisements] should be one which is practiced by young people 16 to 20 years old or one that these people can reasonably aspire to in the near future.[14]
Now, possibly tobacco company witnesses will tell this committee that their industry shouldn’t be judged today on the marketing strategies they employed 20 years ago. The problem is, these marketing strategies still seem to be in effect today. The first example I would like to point out is Imperial Tobacco’s “Go Your Own Way” (« Un monde à ta mesure ») campaign for Player’s cigarettes. This campaign is underway as we speak; theoretically, it is a sponsorship ad about car racing, but cars are nowhere in evidence. What is in evidence are all the usual elements of Player’s marketing: autonomy, outdoor activities, youthful models.
Another example, from a different company. Several of you may have seen recent Export ‘A’ ads on television. These are theoretically sponsorship ads for ‘extreme’ sports. In one of these advertisements, the camera opens on a scene of bedsprings creaking rhythmically. If you have not seen this one before, you naturally assume this is the result of vigorous sexual activity. The camera then cuts to a young man wearing skis, apparently jumping up and down on the bed as a form of training. This is juvenile humour in every sense of the word. It is the sort of visual gag you see in teen comedy movies, the sort of humour that is particularly effective in communicating with 13- or 14-year-olds.
If this predatory animal has changed its spots, we are still waiting for the evidence.
Industry-Sponsored Youth Access Programmes
There is one last point I would like to touch on. In Canada, as in other countries, the tobacco industry sponsors so-called “youth access programmes,” in which retailers are reminded not to sell tobacco products to minors. The most recent incarnation of this approach is the Canadian Tobacco Manfuacturers’ Council’s “Operation ID” programme.
Given the powerful economic incentives that tobacco companies have to recruit underage smokers, the existence of these programmes may seem surprising. Some people have taken these initiatives as proof that the tobacco industry really is interested in effective action to prevent young people from getting addicted to their products.
But when you are dealing with the tobacco industry, things are not always as they appear. In the United States, the Tobacco Institute — which was the equivalent of the CTMC until the courts forced it to disband recently — set up a programme similar to “Operation ID,” which it called “It’s the Law.” Here is how the Institute described the purpose of its youth programme (which also included booklets for parents and other material) in a 1991 internal document (see Appendix B):
The youth program and its individual parts support The Institute’s objective of discouraging unfair and counterproductive federal, state and local restrictions on cigarette advertising, by:
- Providing on-going and persuasive evidencethat the industry is actively discouraging youth smoking and independent verification that the industry’s efforts are valid.
- Reinforcing the belief that peer pressure – not advertising – is the cause of youth smoking.
- Seizing the political center and forcing the anti-smokers to an extreme (as happened when the antis attacked the industry at the time of the launch.)[15]
In other words, the purpose of the Tobacco Institute’s youth programme was not to deal effectively with youth smoking, but rather to forestall effective government regulation. The same approach has been used in many other countries. In 1995, Philip Morris Senior Vice President Steve Parrish explained to his company’s board of directors how the tactic had been used in Poland and Russia. An excerpt:
…the Moscow city government was preparing to run a very negative anti-smoking billboard campaign. PM was present at a meeting on the issue and offered to take part in the program provided it focused solely on youth. As a result, what may have been a broad, very negative campaign is now a positive youth oriented billboard program carrying the tag line ‘Smoking can wait.’[16]
These industry-sponsored campaigns are fairly consistent around the world in some important respects:
- They focus on legal restrictions on underage smoking, emphasizing that smoking is an ‘adult’ choice. Unfortunately, teenagers rarely feel like waiting before engaging in ‘adult’ behaviour, especially if that behaviour is presented as being attractive and glamorous.
- They rarely, if ever, provide meaningful information about the disastrous health effects of smoking or the dangers of becoming addicted.
- They never point out the tobacco industry’s role in encouraging youth smoking.
This is not to say that governments should refrain from efforts to limit the sales of tobacco products to minors. Enforcement programmes make sense, as long as they are part of a comprehensive plan that includes serious efforts to reduce youth demand for tobacco products and inform the public as a whole — smokers and non-smokers, youth and adult — about the magnitude of the health risk from tobacco, about the addictive nature of cigarettes and about the track record of deception of the tobacco industry. Attempting to deal with youth smoking solely through PR initiatives like Operation ID is like relying solely on the arrest of small-time drug pushers to curb the cocaine trade.
Change Is Possible
Though I am not impressed by Operation ID, there is one important step governments could take to ensure real change in tobacco company behaviour towards kids. The government should establish a system of penalties to ensure that tobacco companies lose money every time a young person becomes addicted to cigarettes.
This would be similar to the so-called ‘look-back’ provisions that were included in the McCain Bill in the United States and various other proposed legislation in 1997 and 1998. The penalties should be large enough to actually constitute an effective deterrent. Companies could be fined the equivalent of three times the profits they would be expected to make from a new underage smoker during that smoker’s lifetime, for example.
Under this system, tobacco companies would have a vested interest in preventing youth smoking. Indeed, individual tobacco companies would have an interest in denouncing competitors who were engaged in marketing to kids. Very rapidly, I think you would see the tobacco industry re-adjusting its promotional strategies and its products to make them unattractive to youth.
The marketing of tobacco products to young people is not a freak occurrence, caused by the presence of a few bad apples among tobacco industry marketing executives. The recruitment of underage smokers is, in fact, crucial to tobacco companies’ long-term profitability. Sales to minors represent a relatively small portion of the industry’s profits in any given year. However, most of the industry’s long-term profits will come from customers who were recruited before reaching adulthood. Industry statements about appropriate strategies to combat youth smoking have to be seen in the context of this business reality. I urge this committee to be creative in looking at ways to curb the tobacco epidemic.
[1] Court exhibit 32 in Mangini vs. R.J. Reynolds Tobacco Company, available on-line at http://www.library.ucsf.edu/tobacco/mangini/report/ .
[2] Preventing Tobacco Use Among Young People, report of the U.S. Surgeon General, p. 9.
[3] Canadian Tobacco Use Monitoring Survey, Wave 1 (February-June 1999), Fact Sheet 5. Youth and Young Adults.
[4] Bates Number 506768777: Camel Advertising Department, “White Paper,” court exhibit 5 in Mangini vs. R.J. Reynolds Tobacco Company, available on-line at http://www.library.ucsf.edu/tobacco/mangini/report/ex005.html.
[5] Bates Number 102686861 in the Guildford depository; available on-line at http://www.hlth.gov.bc.ca/guildford/pdf/029/00002957.pdf.
[6] This document was obtained from the British-American Tobacco document depository in Guildford by Physicians for a Smoke-Free Canada.
[7] At the time, Imasco was a holding company, owned 100% by BAT, that had a controlling interest in Imperial Tobacco and various other companies. BAT now owns 100% of Imperial Tobacco.
[8] Presentation to the BAT Chairman’s Advisory Committee, with handwritten date “10/5/89”. However, the content of the talk indicates it was probably given in 1988. Available on-line at http://www.hlth.gov.bc.ca/guildford/pdf/042/00004280.pdf.
[9] Bates Number 465043166 in the Guildford depository. Available on-line at http://www.tobaccopapers.org/marketing/switching/91-ITL-switching.PDF .
[10] Bates Number 465043176 in the Guildford depository. Available on-line at http://www.tobaccopapers.org/marketing/switching/91-ITL-switching.PDF .
[11] RJR-Macdonald Inc. v. Canada (Attorney General), [1995], 3 Supreme Court Reports 199, p. 295.
[12] Starting Bates Number 566627753. Available on-line at http://www.tobaccopapers.org/marketing/marketing%20to%20youth/ProjectPlusMinus.PDF.
[13] Bates Number 56627820. Available on-line at http://www.tobaccopapers.org/marketing/marketing%20to%20youth/ProjectPlusMinus.PDF.
[14] Quebec Court of Appeal, Montreal. Case Numbers 500-09-001296-912 and 500-09-001297-910. 1991. “Player’s Filter ’81: Creative Guidelines,” Imperial Tobacco Ltd., 1981, p. 1 (14817). Exhibit AG-35. Volume 75, pp. 14817-14939.
[15] Bates Number TIMN 0164422. Available on-line at http://www.tobaccoinstitute.com/PDF/TIMN0164422_4424.PDF.
[16] Document available on-line at http://www.pmdocs.com/getallimg.asp?DOCID=2041645408/5503 .
