Cigarette Advertising and Promotion -- The Free-Speech Perspective

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• CIGARETTE ADVERTISING AND PROMOTION -- ~ F~RR-SPEECH PERSPECTIVE THE TOBACCO INSTITUTE July 12, 1990

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CIGARETTE ADVERTISING AND PROMOTION -- THE F~R~.-SPRF.CH PERSPECTIVE INTRODUCTION ~ YO~ P~PLE B~IN ~OKING? C~T~ II: HOW ~TISING WO~S -- ~P~ITION IN A "~~" ~T CHAPTER III: ~TERNATIONAL EXPERIENCE WITH CIGARETTE ADVERTISING BANS CHAPTER IV: CIGAR~TTEADVERTISINGAND "TARGETING" CHAPTER V: PROMOTIONAL ACTIVITY CIGARETTE MANUFACTURERS CONCLUSION TIMN 0033232

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~" ~ i~ ~ AND PROMOTION -- NO on~ really pretends that advertising is a ~jo= ~eterminant of smoking in this country or any otler." Michael Pertschuk Former Chairman l/ Federal Trade Co~ission-- Each y~ar since 1986, legislation has been intro- duced in Congres~ to ban cigarette advertising or to impose controls on the .=ontent of cigarette advertising that would be tantamount to a total advertising ban. The premise of this legislation is that cigarette advertising is a signifi- cant determinant of smoking by young people and adults and that banning cig;~rette advertising would redube smoking. Antismo~ing advocates have issued a number of manifestos attempting to ju:~tify legislation banning cigarette adver- tising on this b;~sis.~/ i/ Tobacco Iss1~es, Institute of Politics, Harvard University, Apri 27, 1983, Tr. 8-9. 2/ E.g., Tobac,:o Use in America Conference, Final Report (Jan. 1989). TIMN ,0033233

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INTRO-2 Co~ .~% e~ "rFs~ This p~per considers whether banning cigarette advertising in foct would advance the goal of reducing smoking. Relyin9 principally on data reported by government agencies and by antismoking advocates themselves, the paper concludes that a cigarette advertising ban would not signi- ficantly affect tobaccoproduct consumption. However, an advertising ban would violate the First Amendment, reduce the information available to consumers, stifle competition among the cigarette manufacturers, and trigger "major cutbacks" in advertising, publishing and other industries.~/ Antismo~ing advocates only recently have begun to proclaim that cigarette advertising is a major influence on the decision by young people to start smoking. Before banning cigarette advertising became one of their principal political goals, .~ntismoking advocates (in agreement with governmen~ offici.~is and other experts) emphasized family and peer influences as the key determinants of smoking, while advertising played little or no demonstrable role. The contention that tobacco advertising influences people to smoke a.so overlooks or ignores the function of advertising in a "mature" product market such as the market for cigarettes. ~in a mature product market, where the 3/ Policy Economics Group, Peat Marwick Main & Co., The Economic Conseque~:ces for Supplier Industries of a ~am on Cigarette Advertiaing and Promotion, p. 1 (Dec. 1988). TIMN 0033234

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product category is long-established and awareness of the product category is universal, advertising gene/ally does not operate to ii~creaseoverali~demand. Advertising instead operates to main~:ain or expand market share within the product category -- to maintain the loyalty of consumers who already use the })rand being advertised and to convert con- sumers who use other brands. In a market where a single market-share point is worth $358 million (and where the market itself is shrinking), i~ should come as no surprise that cigarette m~nufacturers are prepared to spend large s~s to maintain their market share or to expand their market share by ~ven a small increment. To be ~.uccessful, however, brand advertising must overcome two hurc.les: it must attract the viewer's attention and it must distinguish the advertised bran~ from the multitude of others on the market. To break through the "clutter" that e~ists in the advertising marketplace, .advertisers must frequently employ eye-catching settings and employ bold graphic designs and arresting brand slogans. To separate the advertised brand from its competitors, an advertiser must create a distinct "personality" for the brand. Enforced foreclosure of imagery, themes and slogans in cigarette advertising, as some proposed legislation would do, would be tantamount to no advertising at all since it would not attract the attention of smokers or distinguish one brand from another. - ~-- 0033235

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eta : ~_. produc~ ea£egory is long-established and awareness of the product ca£egory is universal, advertising generally does not operate to increase overall demand. Advertising instead operates to ~intain or expand market share within the product category -- to maintain ~he loyalty of consumers who already use the brand being advertised and to convert con- market itself is shrinking), it should .... that cigarette m-~nufacturers are prepa~ sums to ~intain their market share or ~& market share by even a small ~ncrement~~~ To be :~uccessful, however, brand advertising must overcome two hurdles: it must attract the viewer's attention and it must distinguish the advertised brand from the multitude of others on the market. ~o break through the "clutter" that e:~ists in the advertising marketplace, advertisers must frequently employ eye-catching settings and employ bold graphic designs and arresting brand slogans. separate the adv:~rtised brand from its competitors, an advertiser must .:reate a distinct "personality" for the brand. Enforced foreclosure of imagery, themes and slogans in cigarette advertising, as some proposed legislation would do, would be tan:amount to no advertising at all since it would not attrac~ the attention of smokers or distinguish one 5ran~ ~om a~other. • ............ 0035256

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If cig¢.rette advertising were a significant factor in smoking, one ~¢ould expect to find more smoking in those countries that a~low such advertising than in those coun- tries that do not. In general, however, one finds just the opposite. Whethqr considered" from the standpoin£ of per capita cons~pticn or the number of smokers, the level of smoking appears to be highest in those countries where advertising is fcrbidden and lowest in those countries where advertising is allowed. Even more significant, tobacco product consumption -- including consumption by young people -- is declining in many countries where advertising is permitted and increasing in many countries where adver~ rising is prohibited. In addition to advertising, some antismokers have advocated bans on "promotional" activities such as sponsorship of cultural and athletic events, distribution of tobacco product sBmples, the use of tobacco product trade~rks on nontobacco products and payments to have the brand name of a tDbacco product appear in a movie or play. Ther~ is no evidence that such activities stimulate smoking. Consequently, ban~ing them would be unjustified. Adverti:~ing bans or content controls would not reduce smoking among young people or adults. They are premised -- as are all government attempts to suppress information -- on the dangerous assumption that ordinary citizens cannot be trusted to make their own decisions. 0033237

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INTRO-5 Such a premise is antithetical to the principles of both a free market economy and an open, democratic society. For this reason, the First Amendment condemns paternalistic efforts by government to advance our welfare by keeping us in the dark. As the United States Supreme Court has stated, "[i]t is precisely this kind of choice, between the dangers of suppressing i~formation, and the dangers of its misuse if it is freely avaLlable, that the First Amendment makes for us o~/ pRIVILEGED AND CONFIDENTIAL l~oduced as required by the Court's March 7,1998 State of Minnesota, et al. v. Philip Monks, ei Court File No.: C1-94-8565 4/ Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 770 (1976). ~ ............. TIMN 0033238

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CHAPTER I DO YOUNG PEOPLE BEGIN SMOKING? "The most forceful determinants of smoking [by young people] are parents, peers, and older :~iblings." Mortimer B. Lipsett, M.D. Director National Institute of ,. ~ Child Health and Human Development!/ Before banning cigarette advertising became one of its major politi,~al goals, the antismoking lobby here and abroad candidly ~cknowledged something it now steadfastly" denies: Cigaret;:e advertising does not make people start smoking and b~m,lng cigarette advertising would not make them stop. Michael. Pertschuk, the former Chairman of the Federal Trade Co,,~ission who now helps direct the antismoking lobby, stated in 1983 that "[n]o one really i/ Smoking Prevention Act: Hearings on H.R. 1824 before the Subcomm. on health and the Environment of the House Comm. on Energy and Commerce, 98th Cong., ist Sess. 53 (1983) . . .............. TIMN 0033239

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,pretends advertising is a major determinant of smoking ~ that in this country or any other.''2/ Similarly, the Ontario Task Force on Smoking acknowledged in L982 that "[n]o persuasive empirical evi- dence exists" to support the contention that advertising is a significant de~:erminant of smoking.~/ Likewi:~e, Elizabeth Whelan of the American Council on Science and Health stated in 1985 that an advertising ban would "probably not" reduce cigarette consumption in this country.~/ AS ear~.y as 1975, Karl W~rnberg of the Swedish Export Council t,~ld the 3rd World Conference on Smoking and Health: "'~o summarfze, there is no evidence to suppor~ the view that a ban on advertising would }~ave a positive effect on smoking habits. No empirical research has been able t~. show that aggregate brand adver- tising leads to greater total tobacco con- sumpti<.n. Nor has anything been found to sugges~ that advertising entices non- smoker~, young people in particular, into becomi[g smokers. It follows, therefore, that t~ere can be no evidence showing that a ban cn advertising would result in 're- 2/ Tobacco Issnes, Institute of Politics, Harvard University, April 27, 1983, Tr. 8-9. 3/ Task Force cn Smoking, Smoking and Health in Ontario: A Need for 9alance 104 (1982) (emphasis in original). 4/ "Second Thoughts on a Cigarette-Ad Ban," Wall St., J. Dec. 18, 1985, at 28, col. 6 ..........

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duced tobacco consumption and fewer new smoke~s."~/ "" At th~ same conference, Professor James L. Hamil- ion of Wayne State University stated that advertising bans "have not been ~n effective policy for reducing ~igarette smoking.''~/ Dr. Hamilton explained that cigarette adver- tising is "a competitive weapon" and "has not been used as a means for expanding [the] marketo"!/ As recently as 1989, then-Surgeon General Koop acknowledged that cigarette advertising and promotion have not been shown to increase the level of tobacco consumption. He stated: "There is no scientifically rigorous study available to the public that pro- vides ~ definitive answer to the basic questiDn whether advertising and promo- tion increase the level of tobacco con- sumption."~/ ~/ K. W~rnberg, "Ban on Advertising - What Then?", Pro- ceedings on the ~rd World Conference on Smoking and Health, vol. II, p. 854 [New York, 1975) ["3rd World Conference"]. 6/ Hamilton, "'~he Effects of Cigarette Advertising Bans on ~igarette Consum~)tion," id. at 829. !/ Id. at 830-31. ~/ U.S. De~art, lent of Health and Human Services, Reducing the Health Consequences of Smoking: A Report of the Surgeon General 512 (1989) (hereinafter cited as Surgeon General's Report ) TIMN 0033241

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Before launching their, attack on cigarette adver- tising, antismo~ing advocates acknowledged that the only demonstrated in~luences on smoking by young people are the influences of f~mily and peers, and these influences -- unlike the asses:ted influence of cigarette advertising -- have been shown to be both powerful and direct. In 1969, for example, da~a gathered for the American Cancer Society demonstrated th=.t "[p]ersons 'in the enviro~ent are clearly very important ~n shaping smoking behavior: Where parents or other fre~e~tly seen adults smoke, youngsters are more likely to take up the habit. * * * Most influential of all seem to be friends .9/ In 1983, Dr. Mortimer Lipsett, the Director of the NIH's National Institute of child Health and Human Development, testified to Congress that "[t]he most forceful determinants of smoking [by young people] are parents, peers, and older siblings.''I0/ Dr. Lii~sett also noted: 9/ Quoted in Advertising of Tobacco Products: Hearings before the Subco,~m. on Health and the Environment of the H.ouse Comm. on Energy and Commerce, 99th Cong., ist Sess. 683 (1986). !0/ Smoking Prevention Act: Hearings on H.R. 1824 before the Subcomm. on :[ealth and the Environment of the House Comm. on Energy ~u~d Commerce, 98th Cong., ist Sess. 53 (1983) (statemen~ of Mortimer B. Lipsett, M.D.). TIMN 0033242

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" '~If one parent smokes, the child is twice as likely to smoke as one reared in a nonsm~king household. If both parents or ~ one p~.rent and an older sibling smoke, the ~ chances become four to one. If the child's ~ ~ best ~riend smokes, there is a 90 percent ~'~ probability that the child will smoke These findings are not limited to this country, but reflect worldwide opinion. For example, the Swedish national Smoking and Health Association concluded in 1983 that "the smokiDg habits of young people are dependent on stressed that "[t]he people who most influence a child to start smoking are his or her friends and family.''13/ This consensus is supported by a four-country survey conducted in 1983-1984 by the World Health Organiza- tion ("WHO"), the results of which were published in 1986: "When young people start smoking, the most important predictor is the smoking behaviour and smoking-related activities of 'significant others'."14/ ii/ Ibid. (emphasis added). 12/ Smoking Control in Sweden 9 (1983). 13/ B~gin, "Address to the Fifth World Conference on Smoking and Health," Proceedings on the 5th World Conference on Smoking & Health, vol. I, p. 26 (Winnipeg, 1983) ["Sth World Conference"]. 14/ Aar~, Wold, Kannas& Rimpel~, "Health Behaviour in (footnote cont'd) TI [N 8 33243

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The WHO survey ~ound that "[t]he strongest statistical rela- tionships are f¢.und with the smoking habits of the best friend.''15/ Thc survey also found that smoking among ~schoolchildren is "strongly related to the number of smokers in the family."!~/ The researchers also found "no sys- ~tematic differences" between the smoking behavior of young ~eople in countries where tobacco advertising is completely ~anned and in countries where it is not.17/ Many other studies have reached similar Zoonclusions. For example, studies conducted in 1975 and ~980 in Norway s~owed that where both parents smoked, and ~ ~hey permitted t~eir children to smoke, about 67 percent 'of he girls aged 15 were daily smokers. Where neither parent smoked, and the zhiidren were not permitted to smoke, the figures fell to 9 percent for boys and Ii percent for girls.I-8/ Dr. M.J. Ashley of the University of Toronto (footnote cont'd~ Schoolchildren: :~ WHO Cross-National Survey," Health Promo- tion, vol. 1, no. i, pp. 17, 21 (May 1986). 17/ Id. at. 32 (~mphasis added). 18/ See Hauknes, L~chsen, Aar~, "Planning, Development and Evaluation of a :~pecial Smoking and Health Program for (footnote cont'd) TIMN 0033244

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report4d in 1983 that Canadian boys and girls whose fathers or mothers smoke are significantly more likely to smoke than Canadian boys and girls whose fathers andmothers do not.19/ ~WHO s reglonal detector for Europe recently reiterated that ,, • ' smoking among children and adolescents is heavily linked to ~the smoking beha-iour of parents.''20/ Expert~ who have studied the cigarette advertising ~issue for the ad,.,ertising and tobaooo industries also have ~reported that a ~oung person s decision to start smoking is ~%~nfluenoed'prima~'ily by his parents, peers and siblings. ~ ~articularly ins:.ructive is the testimony in 1986 before the ~'~ouse Subcommittc.e on Health and the Environment by Dr. Roger D. Blackwe].l, Professor of Marketing at Ohio State University, and Er. Scott Ward, Professor of Marketing at The Wharton School, University of Pennsylvania.21/ Dr. Blackwell explained that ( footnote cont ' d) Pupils Aged 12-13 Years," 5th World Conference, vol. i, p. 722 (1983). 19/ M.J. Ashley, "Women and Smoking," 5th World ConferenCe, • 20/ J.E. Asvall, M.D., "A Smoke-Free Europe - A Challenge ~-6r All for Health," First European Conference on Tobacco Polic~, Madrid (Nov. 7-11, 1988). 21/ Advertising of Tobacco Products: Hearings before the (footnote cont'd) TIMN 0033245

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"From his parents a child acquires basic ~.ttitudes toward smoking. The more the paLents.smoke, the more likely the child ~,ill smoke; the more the parents discourage smoking the less likely the child ,.,ill smoke. "k'riends also play a significant role in the youngster's decision to try smoking and betome a smoker. And so does the image of 'the smoker' that most children develop. Children report a distinct image of the stereotypical smoker, and it is not the flattering image-that anti-tobacco advo- cates attribute to cigarette advertising. "The stereotypical smoker is viewed by children as less educationally successful, less healthy, and 'tougher' than the stereotypical nonsmoker -- and nonsmokers generally view other nonsmokers as more desirable to have as friends than smokers. "None of the research suggests that advertising influences children to view smoking in a positive light -- we are talk- ing about not intent but actual response among the children. To the contrary, the research that is available revealed in young p8ople a skepticism and distaste for cigarette advertising."22/ These cDnclusions also coincide with those of a 16-country study 3y the Children's Research Unit (CRU) of (footnote cont' d) Subcomm. on Healt,~ and the Environment of the House Comm. on Energ~ and Commerce, 99th Cong., 2d Seas. (1986).. Dr. Blackwell is co-author of a leading textbook on consumer behavior in the U,~ited States, and Dr. Ward is the author of the most widely u:~ed marketing management casebook. 22/ Id at 708. See also prepared statement of Dr. Blackwell, id. at 710-26 (discussing research). TIMN 0033246

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London, Juvenile Smoking Initiation & Advertising (March 1989}.2--3/ In all countries surveyed, the chances of a child smoking were low in a household where there were no other smokers.24/ Given the role that parents and other role models play in s~oking by young people, there is no reason to believe that banning cigarette advertising would lead to reduced smoking .~mong young people. PRIVILEGED AND CON~IDENT/A£ 23/ CRU 16-Coun;:r~ Stud~ at 8, 11-13. The CRU S~xteen-country :~tudy involved fifteen independent investigations (Argentina, Australia, Canada, Hong Kong, Italy, Japan, Ke,~ya, Kuwait, New Zealand, Norway, Philippines, Spa~n, Sweden, Switzerland and Turkey) involving interviews with over 1000 children 7-to-15/16 years of age in f.ach country: U.K. data were gathered from gover~ent sources for comparison purposes. The CRU study was funded by thc tobacco industry and was published by the International Ad~ertising Association. 2~/ CRU 16-Coun£r~ Study at ii. Earlier studies by the CRU have consistentl> found that parents play a critical role. In Canada, for e>ample, the CRU reported that a child whose parents smoke was nearly twice as likely to try cigarettes as a child whose parents do not smoke (43 percent to 24 percent); a chila whose siblings smoke was more than twice as likely to try cigarettes as a child whose siblings do not smoke (72 percent to 30 percent); and a child whose closest friends smoke was more than three times as likely to try cigarettes as a child whose closest f~iends do not smoke (80 percent to 24 percent). Children's Research Unit, ~ Ex~nation of the Factors Influencing Juvenile Smoking Initiation in Canada (May 1987). TIMN 0033247

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Vo.. _. "There is little evidence that advertising result~ in additional smoking. As with many p~oducts, [cigarette] advertising mainly shifts cons~ers among brands." President' s Council ~/ of Economic' Advisors A. The Distinction Between "New" a,td "Mature" Product Markets Certainly all companies, cigarette companies included, use advertising to promote the sale of their products. Proposals to ban cigarette advertising, however, ~eflect a basic .:isunderstanding of how advertising works. Much advertising, including cigarette advertising, is neither intended to, nor does it have the effect of increasing the number of people who use a particular product. Instead, advertising is used to serve a variety of disparate objec- tives depending on whether the product being advertised is i_/ Economic Report of the President 186 (1987),. TIMN 0033248

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o~'~. Zt'ed z- ..................... : .................................... :;~'~. .... ~'Y t~ "~J C " ' Co o Co.. ,. category is in compeL±Lion with other product categories.-2/ In. the case of a "new" product like compact disc players, cellular telephones, or walkman stereos, advertising attempts to inform people about product attributes and benefits. Because the product category is new, advertising functions as a central means by which consumers learn that the product categ3ry exists and how it might be useful to them. At this stage, advertising promotes demand for the product category Ln the course of promoting demand for particular brands -- although all advertisers ultimately are interested in pro.noting their brands against competing brands .. As awareness of the product category spreads, advertising matte~:s less and less in stimulating aggregate demand. In fact, demand flattens because there are fewer 2/ For discussi,~.n of the concept of "product life cycle," and the role of p,omotion for mature product categories, see C. Wasson, Dynamic Competitive Strategy and Product Life Cycles (1978); R. Polli & V. Cook, "Validity of the Product Life Cycle," Jour~al of Business (Oct. 1969); R. Buzzell, :'Competitive Behavior and Product Life Cycles," in New Ideas for Successful Maz'keting (J. Wright & j. Goldstucker eds. 1966); R. Hammermcsh & S. Silk, "How to Compete in Stagnant Industries," Harw~rd Business Review (Sept.-Oct.. 1979); J. Swan & D. Rink, "k'itting Marketing Strategy to Varying Product Life Cycles," Business Horizons (Jan.-Feb. 1982); and Y. Wind, Product Polic~: Concepts, Methods and Strategy (1982). T]MN 0033249

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"new" or "mature," and depending on whether the product category is in competition with other product categories.~/ In th~ case of a "new" product like compact disc players, cellular teiephones, or walkman stereos, advertising attempts to inf~rm people about product attributes and benefits. Beca,~se the product category is new, advertising functions as a ...entral means by which cons~ers learn that the product catfgory exists and product categor~ in the course o~ interested in promoting their brand~. :.. .,....:;:,. ,. ~..., • ~ , :.. brands. As awareness of the product category spreads, advertising matters less and less in stimulating aggregate demand. In fact, demand flattens because there are fewer ~/ For discussion of the concept of "product life cycle," and the role of 3romotion for mature product categories, see C. Wasson, Dynamic Competitive Strategy and Product Life Cycles (1978); R. Polli & V. Cook, "Validity of the Product Life Cycle," Jouznal of Business (Oct. 1969); R. Buzzell, ~'Competitive Beh~vior and Product Life Cycles," in New Ideas for Successful M.~rketing (J. Wright & J. Goldstucker eds. 1966); R. Hammer~esh & S. Silk, "How to Compete in Stagnant Industries," Harvard Business Review (Sept.-Oct. 1979); J. Swan & D. Rink, "Fitting Marketing Strategy to Varying Product Life Cyc.es," Business Horizons (Jan.-Feb. 1982); and Y. Wind, Product Policy: Concepts, Methods and Strategy (1982). TIMNO033250

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II-3 people who have not either tried the product (and become settled users or non-users) or decided that they have no interest in the product category. Consumers no longer need advertising to a~preciate television, soft drinks, laundry detergent or'toothpaste. These products have become a part of everyday life for those consumers who are likely to want them. The aim a~d effect of advertising for such "mature" product categories is to promote particular brands of the product, not to ~)romote the product category itself. Many studies have found that advertising in such markets -- in- cluding the ciga~:ette market -- is not significantly related to aggregate product demand. product category has "matured" and advertising is no longer 3/ For example, a 1976 survey of ten product categories Ydentified four categories in which advertising and primary demand were related. But those four markets each were in the early stage of the product's "life cycle." Cigarettes were one of the remaining six product categories in which primary demand was found to be unrelated to advertising. J. Lambin, "Advertising, Competition, and Market Conduct," in Oligopol~ Over Time (1976). See also R. Ball & R. Agarwalda, "An Econometric Analysis of the Effects of Generic Advertising on the Demand for Tea in the UK," British Journal of Marketing, vol. 4 (1969); K. Palda, The Measurement of Cumulative Adver- tising Effects (1964); L. Telser, "Advertising and Cigarettes," Journal of Political Economy, vol. 70 (1962). An excellent review of these a~d other studies may be found in D. Aaker & J. Carman, "Are you Overadvertising? A Review of Advertising- Sales Studies," Journal of Advertising Research, vol. 22, no. 4 (Aug.-Sept. 1982).

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as reclu. ND CONF ......... " ~mes°t~et al ~ p necessary ~o crea~e awarenes~ o£ ~he produc~, ~he produc~ ca~eqory may be £n d£rec~ compe~£~£on ~£~h o~her oa~egor£e~. ~l:~c~r£c£~y.compe~es £n many area~ ~£~h ga~. ~£ik eomp:~e~ wi~h ~o£~-drinks and o~her beverages. promote a produ.:~ ca~eqory ra~her ~han a par~£eu~ar brand= Bu~ ~£g;~re~es~ 1£ke ~aun~ry de~ergen~ a~e no~ £n e0mpe~i~ion ~ o~her produc~ ca~e~or£e~, and one never ~ee~ an adver~i~emen~:, promo~in~ ~i~are~es or ~aundry ~e~ergen~ a~ ~neh. ~n~e:d, one ~ee~ onZy adver~£~emen~ promo~£n~ particular bran,~ o~ ei~are~e~ or ~und~y detergent. • ho~e who e~aim ~ha~ e£gare~e~ are marke~ 8o £ar a8 youn~ people are concerned misunderstand ~ha~ ~ mean~ £or a produe~ category ~o be "ma~ure." Even a "ma~ure" marke~ ~£~Z have ~£rs~-~ime buyer~. Consumers who never be£ore purchased a home~ a car, a TV, a ~ash£ng mach£ne~ does no~ mean, ho~ever, ~ha~ ~he produc~ category £~ no~ "ma~ure". ~oung people a~e awa~e o£ ~aundry de~ergen~ cigarettes ~on~ ~e~ore ~hey reach ma~ur~y because ~eople around ~h~m ~e ~ho~e produc~s. Younq people are qu£~e a~are ,~ ~he r£sk~ a~£bu~e~ ~o ~mok£n~. A~ ~he Surgeon Genera~ I~a~ ~aked, "by ~he ~me ~hey reach ~even~h grade, ~he va~ ~a~or£~y o£ ~h£~dren beZ£eve ~mok£n~ 00332 2

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................................................... " " dangerous to one's health."~/ Awareness of cigarettes is in fact so widespread that cigarettes are the very model of a "mature" product category. B. Tle Primary Objectives of Advertising I1 "Mature" Product Markets Even though advertising will not influence the absolute size of the market, the incentive to advertise particular brand:~ of a mature product is substantial. The cigarette market has annual sales of $35.8 billion. Gaining a single market-~hare point is worth $358 million, and -- equally importan:: -- preserving a single market-share point is worth $358 mi].lion.~/ The amount spent per smoker to promote brand switching may seem high because relatively few smokers switch b~ands each year, but the amount spent per smoker to prevent brand switching -- that is, to encourage brand loyalty -- is relatively low.~/ ~/ Smoking and ~ealth: A Report of the Surgeon General, p. 17-10 (1979). Of 895 children and adolescents questioned in a rec4nt survey, over 98 percent said they believed smoking is harmful and "accurately named one or more body parts that are adversely affected by smoking." Leventhal, et al., "Is the Snoking Decision an 'Informed Choice's''. , JAMA, vol. 257, pp. 3373-76 (1987). ~/ N.Y. Times, Jan. 12, 1989, at D4. ~/ Those who co~sider cigarette advertising to be pervasive -- who Lndeed seem to notice only cigarette (footnote cont'd) TIMN 0033Z53

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e• . Successful brand promotion in a mature product market, however, must overcome two hurdles. First, the advertising must attract the viewer's attention. Second, and no less impoctant, the advertising must distinguish the advertised brand from the multitude of other brands on the market. The long-term success of a brand depends on "building the * ~ * most sharply defined personality for [the] brand.''7/ In short, both the advertisement itself and the advertised b~:and must stand out from the crowd. Cigarette manufacturers face a unique set of limitations in this regard in their brand advertising. First, in the Un~.ted States there are more than 350 cigarette brands and brand styles on the market.8/ Second, the media to which cigaretl.e advertising is restricted -- the print media -- are rel._-.tively inefficient vehicles for advertising. (footnote cont'd) advertisements, to the exclusion of all others -- should bear in mind that the amount spent on cigarette advertising accounts for less than 1 percent of all U.S. advertising expenditures. The cigarette industry ranks eighth in advertising expenditures behind food, toiletries, automobiles, drugs, cleaners, candies/soft drinks and restaurants. Between 1976 and 1986, cigarette advertising grew at an average annual rate of 8 percent, well below the annual growth rate of 11.9 percent for all industries. [CITES] [/ Phillips, "C~n 'Commodity Thinking' Kill Established Brands?'", Adweek, Dec. 8, 1986 (emphasis in original). ~/ N.Y. Times, Jan. 12, 1989, at D5. . ........... TIMM0033Z54

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Third, advertise~ents fo~ cigarettes in the print ~edia dra~ even less attention than print media advertisements for other product uategories. As Young & Moschis have observed: "~t is generally acknowledged that in a typi,~al magazine envi~o~ent an 'average' advert~.sement ~eceives approximately three second~ of viewing time * * *. Cigarette advertisements receive the least amount of viewim~ time of any major print advertising category. This is because the typical cigarette advertisement is a quintessential "remin,.er" advertisement -- it grabs your attention, you see the picture and you go on to the next page. It is extremely rare for a ~igarette advertisement to hold a viewer's attention for more than a couple of seconds."~/ {1) Attracting Viewer Attention Advertisers typically use attractive models in attractive settings to promote their products. Attractive men and women are used to sell brands of everything from floor polish to m~uthwash. In using attractive models in attractive settings, advertisers a~e not attempting to persuade consumer~ ~hat scrubbing floors or gargling is attractive. The ~oal is to catch the viewer's attention for the advertised br.~nd. Consumecs are exposed to countless advertisements each day in a var.ety of media. On television, at least 20 9/ Young & Moscl~is, "Review of Eye Tracking and Recall Study of Adolesce~ts Viewing Tobacco Advertisements," pp. 9-10 (Jan: 1959) (unpublished manuscript). TIMN 0033255

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-o rile NO.. -'. ~lin ~ ".~ minutes of each broadcast hour are consumed by commercials, and advertisements account for more pages than text in most newspapers and magazines. The result is "commercial clutter." As one advertising executive has stated:• "Hardly anyone in the advertising business would disagree that clutter is a problem. As consumers are bombarded by more and more advertising messages, it becomes more and more difficult for advertising messages to get through. "10/ Resear=h shows that "about 13% of magazine ads are totally missed by the reader, largely because of ad clutter," and that "reader~ are totally ignoring 40% of advertised names.''II/ It also has been reported that "[s]ome 85% of magazine readers do not remember seeing the average i0/ Miller, "No Escaping Ads -- Response to Clutter: More Clutter," Adverts[sing Age, Dec. ii, 1989, p. 34. See M. Schudson, Adverts[sing, The Uneas~ Persuasion: Its Dubious Impact on Americ~ Society 107-08 (1984); M. Ray & P. Webb, "Experimental Re:~earch on the Effects of Television Clutter: Dealing with a Difficult Media Environment," in Marketing Science Institut:~, Research Report # 76-102 (1976); P. Webb, "Consumer Initial. Processing in Difficult Media En- vironment," Jour~al of Consumer Research, vol. 6, no. 4 (1979); P. Webb ;~ M. Ray, "Effects of TV Clutter," Journal of Advertising R<~search," vol. 9 no. 3 (1970); and C. Cobb, "Television Clut~.er and Advertising Effectiveness," in American Marketiz~g Association Proceedings (1985). ii/ See "Eye-Tracking Research Bolsters Claims of Bus Shelter Advertising Effectiveness", Marketing News, Oct. 28, 1983, p. 8; Alter, "Research on Eye Movement Shows Editorial Environment Does Affect Ad Readership," Magazine Age, Oct. 1982, p. 42. TIMN0033256

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.................................................................... " advertisement.''I~/ According to George Gallup, two adver- tised products ii the same commodity group, using the same size space, can differ by as much as 12 to 1 in their ability to comma.ld attention and register the product's brand name.13/ Numerous studies demonstrate that various measures of advertising ei~fectiveness -- such as recall and positive attitudes -- deceease as the amount of "clutter" increases in the media env.ronment. Viewer attention is a limited resource, and ad,,ertisers compete intensely for it. The ability to gain .:onsumer attention, other "things being equal, often is weakest in "mature" product markets because consumers are so familiar with the advertised product. Thus, adver- tising expenditures often must be higher, and advertising itself must be more eye-catching, in mature markets than in "new" or emerginc markets if it is to achieve the same level of attention.14/ Every advertiser therefore seeks the most effective means available to get a message noticed, for he 12/ Ogilvy & Ra~haelson, "Research Advertising Techniques that Work -- and Don't Work," Harvard Business Review, July-Aug. 1982, p. 14. 1.3/ Gallup, "How Advertisi.ng Works," 23 J. Advertising Res. 76, 78 (1983). 14/ See, e.g., Newsday, Dec. ii, 1989, p. 4 (the manufacturer of new household cleaner must have "a major, continuous program [simply] to convince the consumer his product exist-~") . ._ ~ TIMN 0033257

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reaps the rewac<, of a viewer's momentary focus and a chance to "speak" to tP.e viewer.~/ (2) Audience Se~entation Broadly speaking, an advertiser in a "~ure" product ~rket can promote a pa~ticulac brand in either of two ways. ~e can point to objective characteristics of the brand ~hat ~ke that bcand supecior to other brands, or he can identify the brand subjectively as the brand that is desirable for consumers with particular lifestyles.~/ ~here ~re ~ny product categories in which an advertiser can point to objec£ive characteristics of a brand that distinguishes that brand from competing brands. One make of automobile may have better mileage or require fewer 15/ See "Images That Created Impressions: Their. Strength Is in Boldness," NewsdaN, Dec. 18, 1989, p. 5; "Visibility " Adweek, Dec. 18, 1989, p 7 (ads for for the Invisible, . Infiniti model ".¢ere very aggressive, in that they cut through the clut:er and made Infiniti stand out from the crowd"). 16/ The prevalence of market segmentation in marketing practices is reflected in P. Kotler, Marketing Management: Analysis, Planning and Control (5th ed. 1984); J. Engel, H. Fiorillo & M. Ca,~ley, Market Segmentation: Concepts and Applications (19.'2); D. Yankelovich, "New Criteria for Market Segmentat.on," Harvard Business Review (March-April 1964); J. Plumme,;, "Life Style Patterns: New Constraint for Mass Communicati~)n Research," Journal of ~roadcasting (Winter 1971-72) W. Smith, "Product Differentiation and Market Segmentat~.on as Alternative Marketing Strategies," Journal of Marke;:ing (July 1956); and A. Roberts, "Applying the Strategy of Harket Segmentation," Business Horizons (Fall 1961). TIMN 0033258

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repairs than another, and of course automobiles vary dramat- ically in price. Similarly, laboratory studies may in fact show that some antacids work faster and more effectively than others, cigarette advertisements also can point to the "tar" and nicotine rating of a particular brand, its type of filter, taste or length. When such objective characteris- tics allow an advertiser to distinguish his brand from others, the advectiser is likely to stress those characteris- tics in the advertising. In man{ product categories, however, brands ar~ more or less interchangeable in "objective" terms. Some cigarette brands, like some soft drinks and soaps, are more difficult to distinguish from one another on the basis of objective characteristics £han are product brands in other ~ture product c~tegories. Thus, other approaches, not limited to purely textual messages, may be used. An adv:~rtiser attempting to promote a brand that is less readily ,~istinguishable from other brands therefore tries a differen~ approach. He aims to promote his brand with particular ~roups of consumers within the product cate- gory by saying, in effect, "If you are this kind of consumer, Brand X is for you; if you are that kind of consumer, Brand Y is for you." The advertiser, in other words, chooses a parti-. ~ular group of consumers within the product category at which TIMN 0033259

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TI-12 "to direct his message and tailors his message in a way that is more likely to strike a responsive chord with that group. Individuals tend to cluster in "taste cultures." It is to these groupings that advertisers direct their messages -- particularly in mature product categories in which objective differentiation of the constituent product brands is difficult Advertisers no longer treat the public ~as an undifferentiated mass. That approach simply is not ~cost-effective, and it is particularly inefficient when many ~interchangeable brands of a product are competing for a ~share of the market. This is simply a fact of effective marketing, which indicates ndthing an itself about whether advertising increases total consumption of a particular Cigare~:te advertising, like other advertising, seeks to portray the brand being advertised in a "positive" manner. Not sur~risingly, people in cigarette advertisements often appear to ~,e enjoying themselves and taking pleasure in smoking. Thi~.~ cannot be considered inherently misleading. Similarly, many ,~igarette advertisements depict attractive people, but that is about the only generalization that one can make. Sometimes the people portrayed are rugged, outdoor types; scmetimes they appear well-to-do or sophisti- cated; sometimes they are confirmed individualists; some- times they are emphatically sociable creatures. The various TIMN0033260

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II-13 cigarette manufa<..turers, like advertisers of soaps and colognes, attempt, to attract the attention of each of these audiences. But, it is. not the advertisement that "shapes" the consumer. I~_ is the consumer (those ~n the audience who already use the ,~.roduct category) that "shapes" the advertise- menc. or ou or audiences, and iD seeking to gain. their attention and ~ " preference, cigarette manufacturers are doing exactly what other advertisers do -- and must do -- to engage in brand competition. Thus, contrary to contentions made by propo- nents of advertising restrictions, the mere fact of audience ~segmentation does not indicate that advertising stimulates ~overall product demand. 3. Consumer Response to Advertising Proponents of a ban on cigarette advertising overestimate the power of advertising -- in part by under- estimating the intelligence and free will of the "target" audiences. Although this view of consumers is one that pre- vailed in advertising theo.ry earlier in this century, it has been discredited. Consumers are far more sophisticated and di.scriminating in their responses to advertising than was once believed. Once it was thought that advertising had a direct and powerful effezt on consumers. Advertisers would say, TIMN 0033261

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11-14 "Buy Brand X because it is superior to Brand Y," and if the advertisement were clever enough, the consumer would buy the advertised brand. In reality, the world does not and never did operate in the way described by this "one-way flow" model. Advertisers soon realized that simply disseminating a commercial mes:~age did not ensure it would be noticed. ~,~They also learns.| that, even when noticed, commercial ~messages were no~" necessarily- retained, and that even when ~,~viewers found a ~iarticular advertisement memorable, they did ~.~not always remem,~er what brand was bein advertised.17/ ~ g Moreover, even w!~en consumers did remember an advertisement, as well as the n~me of the advertised brand, there was no" guarantee that they would have any interest in buying the brand or even a 5.roduct within the product category. The failure of consumers to provide a Pavlovian response stems from the fact that people are not hapless recipients of advertising. Rather, when they do notice 17/ These points are discussed in M. Ray, Advertising and Communication Management (1982). Other discussions of early models of advertising and promotion effects include W. Schramm, "Channels and Audiences," in Handbook of Communica- tion (I. dePool et el. ads. 1973); H. Laswell, "The Struc- ture and Function of Communication in Society," in Communication of [deas (L. Bryson ed. 1948); R. Bauer & A. Bauer, "America, ~ass Society and Mass Media," Journal of Social Issues, vo[. 16 (1960); R. Bauer, "The Initiative of the Audience," Journal of Advertising Research, vol. 3, no. 2, (1963); and T. Robertson, J. Zielinski & S. Ward, Consumer Behavior (1984). TIM 0033262

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advertising, they are active participants who ignore, selectively attend to, laugh, counter-argue, forget or say "no" to it.18/ _individual audience members are the sum of myriad experienc:.s and beliefs who evaluate co~ercial .~9/ messages not in a vacu~ but in the context of their lives Counte.:-arguments are a pervasive part of the exchange between advertiser andconsumer. One may resist the most appeal~,~g advertisement for a fast-food chain because one is o,, a diet or does not like "junk" food.. One ~~y resist a clever advertisement for a domestic automobile because one beli:~ves that foreign-made cars are more reliable or because one i:~ pleased with the performance of one's own car. One may de<~ide against chewing gum -- despite the attractive, happy' people who inhabit gum advertisements -- b~cause one thin~s tha~ chewing gum is annoying. This kind of counter-argum:[~nt goes on all the time, most often in the form of an inter,.alized debate. 18/ R. Bauer, "'~'he-Initiative of the Audience," Journal of ~-~vertising Rese.srch, vol. 3, no. 2 (1963). fl__9/ Contemporar~ models of marketing communication are ound in adverti,ing text and trade books, such as those cited above. Sac also M. Ray, "Marketing Communication and the Hierarchy of Effects," in New Models for Mass Communica- tion Research (P. Clark ed. 1973); and W. McGuire, "An Information Processing Model of Advertising Effectiveness," in Behavioral an~ Management Sciences in Marketing (H. Davis & A. Silk ads. 1978). TIMN 0033263

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that occurs in the case of cigarettes is that no viewer can possibly avoid t~e counter-argument. Cigarette advertising carries the Surg_~on General's rotating messages. Indeed, the antitobacco poin~ of view is one of the most widely dissemi- Institute, for e~ample has celebrated "the vast outpouring " ~'~ ment, in short, is a reminder of the smoking and health controversy, containing its own counter-argument. Despit~ the pervasiveness of advertising, it lacks the persuasive i.npact on the cons~ing public that some would ascribe to it. Indeed, advertising is so pervasive precisely because its persuasive impact of advertising is so limited. Advertisers must advertise if they are to retain the brand loyalty of their own consumers and, perhaps, attract consumers away from competing brands.. And, particularly in the case of mature produc=s, advertisers must compete aggressively to be heard through the commercial clutter. Even if the adver- tiser manages to catch the momentary attention of a consumer, he always risks :ejection of his message by the consumer's 20/ Media Strategies for Smoking Control -- Guidelines, p. 9 (Jan. 14-15, 1988) ("By standards which apply to most running stories, coverage of smoking has enjoyed an extra- ordinary run in ~:he media."). TIMN 0033264

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II-16 What ~.s distinctive about the counter-argumentation that occurs in .he case of cigarettes is that no viewer can possibly avoid ~:he counter-argument. Cigarette advertising carries the Sur~leon General's rotating messages. Indeed, the antitobacco poi,-.t of view is one of the most widely dissemi- Institute, for example, has cele~ of media attention to smoking~''2~ ment, in short, is a reminder of controversy, containing its own c Despite the pervasivene~.~'..~ the persuasive impact on the consuming public that some would ascribe to it. Indeed, advertising is so pervasive precisely because its persuasive impact of advertising is so limited. Advertisers must advertise if they are to retain the brand loyalty of their own consumers and, perhaps, attract consumers away from competing brands. And, particularly in the case of mature produc~s, advertisers must compete aggressively to be heard through the commercial clutter. Even if the adver- tiser manages to catch the momentary attention of a consumer, he always risks ~ejection of his message by the consumer's 20/ Media Strategies for Smoking Control -- Guidelines, p. 9 (Jan. 14-15= 1988) ("By standards which apply to most running stories, coverage of smoking has enjoyed an extra- ordinary run in ~he media."). TIMN 0033265

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Ii-17 own internal cou~ter-argument. Proposals to ban or restrict -~o~n~ ~or:~o~o ~o~ o~eres~a~o ~ ~o~er o~ ~d~.r- tising and underestimate the sophistication of consumers. Because such pro~osals are.based on flawed ass~ptions, advertising bans and content controls will not have the Oeffect proponent:L claim. " TIMN 0033266

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~~ ~ Evidence from othe cou ies sug- ~ ~,~2 .ests that banning tobacco product ~r~ &dvertising has not discouraged ~.~ ~'~ smoking. "i/ ,~.'~" President's Council Of ~ ~ Economic Advisers ~ If cigarette advertising were a significant factor ~n smoking, one would expect to find more smoking in those countries that allow such advertising than in those coun- tries that do not. In general, however, one finds just the opposite. Whethec considered from the standpoint of per capita consumption or the percentage of smokers, tobacco product consumption appears to be higher in many countries where advertising is forbidden than in many countries where advertising is atlowed. Even more significantly, tobacc~ product consumption -- both among adults and young people -- is declining in ~any countries where advertising is ~/ Economic ReDort of the President (1987) at 186. The chairman of the ~.S. Federal Trade Commission made the same point in testimo,~y before a subcommittee of the U.S. House of Representative, s in April of 1989. Advertising of Tobacco Products: Heari~gs before the Subcomm. on Transportation, Tourism and Hazaz'dous Materials of the House Comm. on Energy and Commerce, 10Cth Cong., ist Sess., p. 23 (1987). TIMN0033267

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III-2 permitted while Lncreasing in many countries where ~dver- tising is prohibLted. A. T:ends in Smoking Among Young People i., the United States The decline in the incidence of tobacco product consumption amonq both sexes for the 1975-1987 period in the United States is unmistakable. The critics of tobacco products adverti:~ing have vastly exaggerated its influence, as Table I below reveals. Indeed, between 1975 and 1987, there was a 30 percent decline in smoking among high school seniors, from 27 to 19 percent. Meanwhile there was a corresponding increase of 27 percent in the number of high school seniors who had never smoked, from 26 to 33 percent. PRIVILEGED AND CONFIDENTIAL l'roduced as required by the Court's March 7, !998 Order in State o~ Minnesota, et al. v. Philip Morris, et aL Court File No.: C1-94-8565 ~ TIMN 0033268

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Daily Less than Previous smokers, Never Year Smokers daily smokers not in last month Smoked 1975 27 i0 37 26 1976 29 i0 36 25 1977 29 i0 38 24 1978 28 9 38 25 1979 26 9 40 26 1980 21 9 41 29 1981 28 9 42 29 1982 21 9 40 30 1983 20 9 41 29 1984 18 ll 41 30 1985 19 ll 39 31 1986 18 ii 38 32 1987 19 ii 38 33 SOURCE: Institule for Social Research, University of Michigan (Bachma,~ Johnston, O'Malley 1980a,b, 1981, 1985, 1987; Johnston a,.d Bachman 1980 O'Malley 1980a,b, 1982, 1984, 1986, and ,.npublished data 1987) According to the U.S. Surgeon General's most recent report, daily smoking among male high school seniors dropped at an even sharper rate~ from a peak prevalence of 28 percent in 1976 to 16 percent in 1987 -- a 43 percent decrease. Among female high school seniors, daily smoking decreased from a peak prevalence of 30 percent in 1977 to 20 percent in 1987 -- a 33 percent decrease. The decline among black high school seniors was especially significant, TIMN 0033269

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falling 70 percent, from 26 percent in 1976 to 8 percent in The trend among high school seniors is consistent with those of other age groups. Among 20-to-24 year-olds, for example, consumption fell from 47.8 percent in 1965 to 29.5 percent in 1987, a 38 percent decline. Among males in this age group, zonsumption dropped 45 percent, from 56.3 to 31.1 percent bet.~een 1965 and 1987. Among females, it declined 31 percent, from 40.5 to 28.1 percent.~/ Despite a period of steadily rising advertising expenditures by .~igarette companies, smoking has declined dramatically and across the board. These statistics scarcely support the thesis that tobacco product advertising increases the incidence of smoking among teenagers in the United States. B. S:,oking Among Juveniles in F.nland, Sweden and Norway Finland[, Sweden and Norway all have banned or severely restric~:ed cigarette advertising. Evidence from these countries, however, suggests that these measures have been ineffective in reducing smoking among young people in 2/ U.S. Depart1~:ent of Health and Human Services, Reducing the Health Conse~'uences of Smoking: .A Report of the Surgeon General 303 (1989) (hereinafter cited as Surgeon General's Report ) . TIMN 0033270

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.... Cou- i/hi i? % ................ " those countries. Tobacco use among teenagers in Finland and Sweden is increasing,-not decreasing, and the evidence from Norway is inconclusive. Finland. In Finland, tobacco product advertising has been banned ,~ompletely since 1978. Nevertheless, University of He Lsinki researchers have found that smoking among juveniles increased after imposition of the ban.4/ Thi's is in sharp contrast to smoking incidence among the same age group b:~,fore the ban -- which had been deolining sharply before t|le ad ban was imposed. In particular, the incidence of smoRing among 12-18 year-olds of both sexes had been declining sharply in the period preceding the ban in' 1978, but genera .ly stabilized between 1979 and 1985.5/ Then, between 19~|5 and 1987, the evidence showed "a clear increase in smok~.ng * * * among adolescents.''-6/ The ~/ Rimpel~, Ri!~el~, Hara-Etelaharju, Pykari, Siivola & Karvonen, Young Deople and Smoking 1973-1989, p. 6 (1989) {University of H~Isinki, Department of Public Health Science); Rimpel~0, Rimpel~, Karvonen, Rahkonen, Siivolva & Kontula, "Changer. in Adolescents' Health Habits 1977-1987: Preliminary Report to the National Board of Health" {May 1987). This res,[.arch, conducted by the Public Health Department of thc. University of Helsinki, was funded principally by t~.e National Board of Health. ~/ Id. at 8 (Diagram 2). ~/ Id. at 4. ~or some segments within the 12-18 year-old age group, the uEswing began as early as 1981-1983. See Supplementary Tables 4 and 5. TIMN 0033271

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................................................. ~.e/.a~,~. ........ ~.~e-~o~,~% ~, . • ZZI-6~ Co.. ~:7 ~ ~. ~ Ph;~;- -=" ~ 1998 Order ~- -ue No.. ,~ =.~'F ~o~ r~s~nrchers note~ that the increas~ h~d been g~atest among girls aged 16-18 -- from 25 percent in 1979-1985 ~o 3~ percent in 1985-L987.~/ A 1989 gover~ent report concludes that these trend~ have continued and that the proportion of 14-18 year-old boys and girls who smoke is now higher than at any time since 1978.~/ ~eden. In Sweden, tobacco product advertising has been severel7 restricted since 1979. Yet, the Swedish National Smoking and Health Association reported in 1983 that between 1980 and 1982 -- after imposition of the restrictions -- the incidence of smoking among teenagers in Sweden generally increased.~/ Smoking among 16-year-old males, which had dropped from above 40 percent in 1971 to 20 percent in 1979, increased to at least 23 percent in 1982. During the same ~eriod, the incidence of smoking among 13-year-old male~, rose from about 5 percent to over 8 ?_/ Id. at 9, 15. See also Press Release, 28.5.1987, University of Helsinki, Public Health Dept., Medical Sociology Research Team. 8/ Rimpel~, Rimpel~, Hara-Etelah~rju, Pyk~ri, Siivola and Karvonen, Young People and Smoking 1973-1989, p. 6 (1989). 9/ National Smoking and Health Association, Smoking Control in Sweden, pp. 6-7 (1983). TIM~ 00~272

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I . . Z/1,~ - ~.u ~ ......... ----_" ................................ ~_ sot~.~i~;-, u~ ~: III-7 ~e No. £ ~ili, ~, , ~998 ~ . percent.1~/ Following a brief, subsequent decline, smoking began to increass again in 1984. Smoking is still on the rise among Swedish teenagers, despite the adve=tising ban. Meanwhile, smokeless tobacco use by teenagers nearly quadru- pled between 1975 and 1986, notwithstanding the ban and rigorous antitobacco education efforts.11/ Noway. Antismoking advocates claim that in Norway, where tolmcco product advertising was completely banned in 1975, ~moking among 13-15 year-old schoolchildren has declined sin,:e the ban was imposed, reversing a supposedly sharply upward trend.~/ This claim depends, however, on a misleadingly selective Use of the data the underlying s~rveys. The claimed decline in smoking ~ong this very young age group, following a supposed upward trend, relates to dailv smoking. The data indicate that daily ~d occasional smoking ~mong boys in this age g~oup in fact was declinin~ prior to 1975, and that daily an~ l__O/ WHO Cross-National Survey at 24. i_~I/ National Boa.~d of Health and Welfare, Tobacco Control ~n Sweden, pp. 6--.' (1987). 12/ K. Bjartveit & K. Lun@, "Smoking Control in Norway," p. 4 (Oslo, Nov. ].987); Bjartveit, "Legislation and Political Activity," Proceedings of the 5th World Conference on Smoking and He.~:Ith, vol. i, p. 38 (1983) ("5th World Conference" ). TIMN 0033273

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III-8 °~t~ PHe *,~" ~ P~i~. ~ ~ 1998 Or~ . occasional smok~ng among 13-year-olds, at least, increased after 1975. Moreo,,er, it is not at all clear that even the incidence of da.ily smoking in this age group was on the rise before the impo:;ition of the advertising ban. Although the incidence of sm<.king in this age group reportedly was higher in 1975 than in 1963, no nationwide schoolchildren study was performed betwetm 1963 and 1975. Thus, the prevalence of smoking in this age group may well have peaked as early as 1970, when the incidence of adult smoking also peaked, and declined thereafter.~3/ Smoking among 15-21 year-olds in Oslo reportedly peaked in 1974, a year beforethe adver-. rising ban was imposed, and smoking among males in that age group reportedly was already on the decline in 1975.14/ 13/ See Aar~, Hauknes & Berglund, "Smoking Among Norwegian Schoolchildren 1975-1980," Scandinavian Journal of Psychology (1981) 22:(3), p. 165: "There was no nation-wide study of smoking among -~choolchildren in Norway between 1963 and 1975. Accordingly it is not known whethe: the increase in daily smokers among children of both sexes * * * occurred evenly throughout the * * * period or whethe: the trend may have reached a peak and culminated sometime between the two dates.~' 14/ Smoking Pre.,ention Education Act: Hearings on H.R. 1824 before the Subco~. on Health and the Environment of the House Comm. on Energy and Commerce, 98th Cong., ist Sess. (footnote cont'd) TIMN 0033274

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................................... . ........... ........ " .... has questioned the reliability of the Norway study on the ground that it ii "based on small s~ples of a rather narrow age range." The Norway data, he said, do not offer "com- pelling ~videnoe that banning tobacco product advertising reduces either s,aoking by youth or overall tobacco consump- tion..15/ The ex:?erience in Finland and Sweden belie the supposition that advertising, bans inevitably and inexorably will be followed by declining cons~ption among young people. Nor does that su..~position gain support from the experience in Norway, given the limited nature of the data and thei~ suspect reliabil[ty. In light of the experience in Finland and Sweden, the i~orway experience suggests at most that one cannot link declining consumption to the elimination of advertising. C. C ~oss-Country Surveys If advertising were a significant influence on smoking among ju-teniles, one would expect juvenile smoking to be higher where tobacco advertising is permitted than (footnote cont'd) (1983), p. 285 (chart attributed to Norwegian Government, submitted by Coalition on Smoking Or Health). 15/ Collishaw, Commentary on Application to Regulate Tobacco Products under the Hazardous Products Act by Physicians for a Smoke-Free Canada, p. 1 (May 12, 1986). TININ 0033275

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where it is not. ~t a recent ~orld Sealtb Organization survey found "no systematic differences" between juvenile smoking in countries such as Norway and Finland, where tobacco advertising is completely banned, and in countries such as Austria and England, where it is not.16/ Indeed, the WHO survey aad the three CRU studies disclose that the incidence of smoking among young people is higher in many places where adv-~rtising is banned than where it is not. In other cases, the incidence of juvenile smoking is found to be virtually ide.ltical in both situations.17/ In FinLand, for example, where t6bacco advertising has been banned .:ompletely since 1978, the WHO survey found that 30 percent of 15-year-old schoolboys smoked weekly; while in Austria. where print-media and outdoor advertising are permitted, the WHO survey found that only 17 percent of 15-year-old scho,)iboys smoked weekly.18/ In Norway, where tobacco advertis!.ng has been banned completely since 1975, 16/ Aar~, Wold, Karmas & Rimpel~, "Health Behaviour in Schoolchildren: A WHO Cross-National Survey," Health Promotion, vol. ]., no. i, p. 32 (1986). 17/ Children's ~'.esearch Unit, Why Do Juveniles Start Smoking? (Boddewyn ed. 1987); Children's Research Unit, An Examination of t~le Factors Influencing Juvenile Smoking Initiation in Ca;:ada (1987); Children's Research Unit, Juvenile Smoking Initiation & Advertising (Boddewyn ed. 1989). 1--8/ WHO Cross-N;=tional Survey at 24. TIMN 0033276

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and in the United Kingdom, where print-media and outdoor advertising are permitted, 23 percent of 15-year-old school- boys were found to smoke weekly. Similarly, the CRU sixteen-country study found that the proportion of 11-15 year-olds who claimed to smoke regularly was significantly higher in Norway (13%) and Sweden (10%) tha~ in Spain (7%), where only minor adver- tising restrictions were in effect, and far higher than in either Hong Kong (3%), where few tobacco advertising con- trols existed, o: Kenya (less than 0.5%), which has no restrictions.19/ In Norway, 36 percent of all 15-year-olds claimed to smoke regularly in 1987 while in Spain the figure was 27 percent. In ~ong Kong, the figure was ii percent.20/ In Norway, of course, the subjects of the CRU sixteen-country ~tudy were too young to have been influenced by cigarette adw!rtising -- or the "climate" that it allegedly foster~ -- before the ban was imposed in 1975. Indeed, some of i.he subjects of the study had not even been born yet. By co,-~trast, all of the subjects of'the CRU study in Spain and Hons Kong had grown up in the presence of cigarette advertising. Yet, the incidence of smoking among 1_~9/ CRU 16-Country Study at 17. 20/ Id. at 9. . ............. TIMN 0033277

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the juveniles studied in Spain and Hong Kong was lower by far than the incidence of smoking among juveniles in Norway. In other words, although all these countries have very different tobacco advertising~controls -- ranging from minor to ~jor and to a ban -- one could not predict from that situation which country has the lowest incidence of juvenile smoking. Conversely, juvenile smoking statistics would not help predict which country has the strongest restrictions on t~bacco advertising. Clearly, factors other than tobacco advertising and its regulation must have played the key roles in juvenile smoking initiation and incidence in these countries. See Chapter I. This evidence strongly indicates that an advertising ban or increased restrictions in the United Sta~es would not lead to reduced smoking among juveniles. D. Tobacco Product Advertising and ~oking by Adults The evidence from a variety of free-market countries indicates that tobacco product consumption by adults is unaffeched by advertising controls. For the most part, the consumption trends in evidence before controls were imposed rema.ned unchanged ~fter controls were imposed. In some countries., as will be see~, adult consumption levels are higher where ~dvertising is forbidden th~n wh~re it is a~lowed. The ef~:~ct of advertising controls o~ adult con- sumption can be a~;sessed from the standpoint of adult per 0033278

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the juveniles studied in Spain a~d Ho~g Kong ~as lower ~y far than the inc~dence of smoking among juveniles in Norway. In oth:~r words, although all these countries have very different tobacco advertising controls -- ra~ging from minor to major a~d to a ~an -- one could ~ot predict from that situation which country has the lowest i~cidence of juvenile smoki,g~ Conversely, juvenile smoking stat~;~ in the United States would not leao £o reduced smoking among juveniles. D. Tcbacco Product Advertising and Smoking by Adults The evidence from a variety of free-market countries indicates that tobacco product consumption by adults is unaffected by advertising controls. For the most part, the consumption trends in evidence before controls were imposed remained unchanged after controls were imposed. In some countries, as will be seen, adult consumption levels are higher where ~dvertising is forbidden than where it is ailowed. The effect of advertising controls on adult con- sumption can be assessed from the standpoint of adult per 0033 79

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III-13 capita consumption or the incidence of smoking among adults. From either stan.~point, the results are the same. As wit;~ young people, the Scandinavian countries often are cited by advertising ban proponents as places in which tobacco advertising restrictions have been followed by declining per capita consumption among adults. But the statistics from :~inland, Sweden and Norway establish that dult per capit oba oo product consumption in those countries began .|eclining before advertising controls were imposed and ther~.~after either continued to decline or increased somewh~t.21/ Major ,~ross-count~y studies disclose similar findings. A 16-~'.ountry Study of eight Soviet-bloc and eight ~ree market coun~ries disclosed that smoking increased -- sharply in some ~ase -- between 19~0 and 1984 in the 21/ Rogers, Myers and Collishaw, "Trends in Tobacco Consumption in Seven Countries 1950-84," p. 522 (1985), Proceedings of the 34th International Congress on Alcoholism and Drug Dependence. "Adults" are defined by the sources relied on by these authors as persons 15 years of age and older. Yet, for other purposes, advertising ban advocates treat 15-19 year-olds as "children" -- a sleight-of-hand that undoubtedly results in double-counting. See also Tobacco Advertis~_ng Bans and Consumption in 16 Countries (J. Boddewyn ed. 1986); M. J. Waterson, Advertising and Cigarette Consumption (5th ed. 1984). The 16-Country Study was financed by the tobacco, industry and published by the International Advertising Association. Advertising and Cigarette Consumption was published by the United Kingdom Advertising Association of London. Mr. Waterson is Research Director of that .~ssociation. TIMN 0033280

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III-14 Soviet-bloc countries even through advertising does not exist.22/ At the same time, in Canada, the U.K. and the U.S., per capita consumption of cigarettes declined significantly during the same period. In the eight free-market countries, consumption trends were not :~ubstant~ially affected by tobacco product advertising bans or strict controls. In Italy, for example, where advertising was banned in 1962, adult per capita consumption increased from a base of i00 in 1960/65 to 182 in 1984.23/ In :3ingapore, adult per capita consumption increased from a base of 100 when advertising was banned in 1970 to 112 in I'|84. And in Iceland, adult per capita consumption incr:.~ased from a base of 100 in 1971, when advertising was banned, to i13 in 1984.24/ The imposition of advertising c,,ntrols in these countries plainly did not measurably influ:i!nce consumption trends. " r~°dUced as ro_ ED A ~r~ _ S~ of ~:_ 4 by ~e C- ~DE~ , ....... ~esota - uu~$ ~._ ~*~L that are available for Thailand and Taiwan reveal a similar pattern -- an advertising ban followed by increases in per capita consumption.- These figures indicate an increase in per capita consumption from a base of i00 in 1970 to 144 in 1984 in Thailand, and from a base of 100 in 1970 to 160 in 1984 in Taiwan. 16-Country Study, p. 18. 0033281

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III-15 Dro Eu~ene M. Lewit of the New Jersey Medical School's National Bureau of Economic Research recently con- sidered the effe_ts of advertising restrictions in less developed countries ("LDC's"). According to Dr. Lewit, ., ' ~ [e]vidence from a sample of LDC s suggests that the xistence of adv.~rtising restrictions per se had little if • _~ny effect in trends in or on the level of cigarette ~o.~u=~o.. ,,~/ . ,o: o, o=. oo<e0 one o, ~ t-the highest rate--~ of cigarette consumption per capita, but l~it had no ci are te advertising. By contrast, in Talwan, rate is less tha,i half the rate of China, and in Hong Kong, where cigarette ~idvertising was only marginally controlled, • .26/ consumption was L-'all'ng -- The To:~-ic Substances Board of New Zealand ("TSB") recently attempt~.~d to contradict the conclusions of these leading studies .n a report entitled Tobacco or Health: An End to Tobacco A, lvertising or Promotion ("TSB Report"). The TSB claimed in this report that data from 18 countries "shows 25/ Lewit, "Tob;_~cco in Developing Countries," p. 45 (Harvard InstituLe for the Study of Smoking Behavior and Policy, Discussi,,n Paper Series, March 1988). ~_.~6 / n,.~. TIMN 0033282

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III-16 that there is a relationship between legislation banning tobacco promotio~ and reduced uptake of the habit by young persons...2--7/ The TS:~ Report suffers from a variety of methodo- logical and othe: flaws that invalidate its conclusions.28/ In many important: respects, the TSB Report simply assumes its conclusions. For example, the TSB Report asserts that aggregate demand in countries like the United States must be affected by adve~tising expenditures, simply because such expenditures are as large as they are. Similarly, the methodology used by the TSB was to compare trends following imposition of a l.an in the ban countries with trends in nonban countries, but "[n]o account [was] taken of the trends in the bar. countries before the ban took place, which is of course crucial information.''~/ PRIVILEGED AND CONFIDENTIAL l~'oduced as required by the CouP% March S~te of Minnesot~ et ~. ~ Philip Mon~ Court File No.: 2--7/ Tobacco or ~ealth: An End to Tobacco Advertising or Promotion, p. xvii ("TSB Report"). 28/ The TSB report was reviewed by three advertising experts at the request of The Tobacco Institute of New Zealand. See, Hagan, Martin & Waterson, An Appraisal of the Advertising Analysis and Conclusions in the "Health or Tobacco" report from the Toxic Substances Board of New Zealand (July 1989). 2--9/ Id. at i0. TIMN 0033283

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III-17 Many conclusions therefore were based on misleading and, in some cases, self-contradictory data.30/ The key con- clusion of the report was that tobacco consumption has declined more rapidly in "total ban" countries than in non-ban coun- tries. This con,:lusion hinged on (1) classifying a single country, Portuga., as a "total ban" country and (2) including the supposed dec.ine in tobacco consumption in Portugal in the overall decline i.n consumption in "total ban" countries. But Por£ugal was misclassified as a "total ban" country, and consumption in P~,rtugal has not declined. If Portugal is not counted as a "total ban" country, that category does not show a more mark:~d decline in tobacco consumption than non-ban countrie:=., and the key conclusion of the TSB report is invalidated. Because of the selective use of data as well as serious methodological shortcomings, the TSB can in no way be considered authoritative.~~G~ 3--0/ Id. at 17-22. TIMN 0033284

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~>~ .~ .% CIGARETTE ADVERTISING x~~ ~0~.~,~ .~O" ~ "T~G~ING" ~'q~% ~ cigare~te smoking ~ong women led tobacco ~~ companies to advertise to the 'female ~rket' than to suggest that advertising create,, the market in the first place." Prof. Michael Schudson University of Californial/ Cigarette advertising is "targeted" at adult smokers. Smokers, like consumers of other products, are not an undifferentiated mass. All sorts of people are smokers. Cigarette manufacturers, like manufacturers in other highly competitive markets, tailor their brand messages to those who consume their products. This is essential to the task of distinguishing the advertised brand from the multitude of other brands on the market. The a11egation that cigarette advertising improperly "targets" women, minorities and "low-income groups" carries more than a little condescension. No one ever has accused ~ cigarette manufacturer of improperly "targeting" white male yuppies -- even though advertising for some cigarett:~ brands features models who fit that i/ M. Schudson, Advertising, The Uneasy Persuasion: Its Dubious Impact on American Society 183 (1986). TIMN 0033285

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IV-2 description. The assumption seems to be that women, minorities and "10w-income groups" are less capable than affluent white males to determine and act in their own best interests and must be "protected" by government censorship. This assumption is both patronizing and incorrect. Commenting on the minority ~ demonstrably "targeting" issue in particular, Dr. Benjamin L. Hooks, Executive Directo~ of the National Association for the /~ Advancement of Colored People, had this to say:~" been made that [the ~ have cigarette] companies are specifically targeting minority.communities because they ~ offer a tempting target and are most likely ~ to be p~rsuaded by the advertiser s message ~ than tha majority community.. Im)licit in this is the premise that ~~ Blacks are so naive they will be persuaded to ~ smoke b{ a billboard or an ad. Buried in ~ this lile of thinking, and never really ~ ~~~~ mentioned by these critics, is the rationale that Bl.~cks are not capable of making their ~ own free choices and need some guardian angels :o protect their best interests. This is an insidious form of paternalism. Blacks, like the rest of the ~ populace, can make the choice of whether to ~ smoke o" not."~/ A. Cigarette Advertising and Minorities Data re~)orted earlier this year by the Secretary of Health and Hum-~n Services, and last ~ear by the Surgeon ~/ Hooks, "What About Individual Choice?, Michigan Chronicle, Dec. 16, 1989. TIMN0033286

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IV-3 General, confoun~ the patronizing hypothesis that African- Americans are particularly vulnerable to cigarette adver- tising. The Secretary of Health and Human Services reported, for example, thai "black smokers tend to start smoking at older ages than .~hite smokers."~/ According to the Secretary, 49.1 percent of .~hite smokers started smoking before the age of 18, while onl~ 31 percent Of black smokers started smoking before the age o~ 18.~/ The Secretary also reported that black smokers sm,~ke fewer cigarettes a day than do white" smokers,~/ and the Surgeon General has stated that "[h]eavy smoking has been consistently more common among whites com- pared with black:.. - The incidence of smoking among blacks 1986 {28.4 pe,'cent) was only slightly higher than the in incidence of smocking among whites (26.4 percent).7-/ According to the most recent report of the Surgeon General, smoking among blacks overall has been declining at about the same r~te as smoking among whites in recent years.~/ 3_/ Smoking and Health: A National Status Report 19 (2d ed. 1990) ( "Smoking mnd Health"). 5_/ Ia. at 7 --6/ U.S. Department of Health and Human Services, Reducing the Health Consequences of Smokihg: A Report of the Surgeon General 293 (1989). 7--/ Smoking and ~ealth, supra, at 16. 8/ 1989 Report, supra, at 270. % -

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IV-4 Indeed, "black ~ales have been quitting smoking at a signifi- cantly higher rate of change than white males.''~/ During the 1974-1985 period, "smoking prevalence among black men was decreasing at a faster rate than among white men * * *. There were no significant differences noted in the rates of decrease among women of either race * * ,.,.i__0/ Smoking among black high school seniors fell from 26 percent in 1976 to 8 percent in 1987 -- a two-thirds decline,l-I/ That decline, which the Surgeon General called "substantial" an~ "dramatic," was far steeper than the decline in smoking among white high school seniors during the same period.12/ Among white male high school seniors, smoking declined from 28 to 16 percent during this period -- nearly a 50 percent decLine. Among female high school seniors, smoking declined from 30 percent to 20 percent -- a 33 percent decline.13/ Dai~y smoking among black high school seniors in 1987 also was less common than daily smoking among white high school seni,)rs.14/ .- .u~VILEGED ~/ Id at 286 • " • o/ za. at ~. !1/ ~. at 303. 12/ z~a. 13/ ~a. l~/ za. at ~0~. T~ 0033288

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IV-5 In addition, the Surgeon General noted that smoking among blacks 20-:24 years of age also declined "substantially" from 1983 (38.7 ~)ercent) to 1986 (28.2 percent), and was esti- mated to have de.:lined further in 1987 (to 25.6 percent).15/ The 1987 estimat:~ for.blacks 20-24 years of age (25.6 percent) is significantly lower than the 1987 estimate for whites of the same age (30:5 percent).16/ According to the Surgeon General, this pr<,valence of smoking among young whites has been higher than the prevalence of smoking among young blacks since 1985.17/ Althouch data concerning smoking among Hispanics are less developed tkan smoking among other ethnic groups, the apparent patterns and trends in smoking among Hispanics are inconsistent with the premise that Hispanics are "vulnerable" to cigarette advertising. The Center for Science in the Public Interest (CSPI) has reported that, based on several surveys, "Hispanic women tend to smoke considerably less than Blacks or Whites, whereas Hispanic men tend to smoke at about the same rate as other men.''18/ The major study of D 15/ Id. at 303. 16/ Id. at 301. D~- Co~ 17/ Id. at 302. 18/ Reducing the Health Consequences of Smoking: 25 Years ~ Progress 512 ([989) (hereinafter, "1989 Surgeon General's ~epor£") 0033289

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IV-6 smoking by Hispaaics by Rogers and Crank has found that: "Hispanic males ~re as likely to smoke as anglo males; how- ever, Hispanic males consume fewer cigarettes. Hispanic females compared with anglo females seldom smoke; when they do, they smoke fewer cigarettes.''I-9/ Other studies reflect similar conclusions. 2--0/ These ~igures clearly do not support the premise, which underlies-i:he claim of improper "targeting" to minori- ties, that black:~ and Hispanics somehow are peculiarly susceptible to cLgaret~e advertising. The belief that minorities are p~cullarly susceptible to cigarette adver- tising reflects =t basic misunderstanding of advertising and fundamental misp:~rception of smoking patterns and trends among blacks and Hispanics. 19/ Rogers & Cr~.nk, "Ethnic Differences in Smoking Patterns: F=-~ndings from NH.S," 103 Public Health Reports 367, 368 (1988). 20/ See Remington, et al., "Current Smoking Trends in the United States: ~he 1981-1983 Behavioral Risk Factor Surveys," Journal of American Medical Association, vol. 23, p. 2975 (1985); Marcus & Crane, "Smoking Behavior among U.S. Latinos: An Emerging Chal~enge for Public Health," American Journal of Public Health, vol. 75, p. 169 (1985); Marcus & Crane, "Smoking among Hispanics: A Preliminary Report," Advances in Cancer Control: Epidemiology and Research 141, 142 (1984). TIM 0033290

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IV-7 B. Cigarette Advertising and Women Cigarette manufacturers also recognize that women. smoke. Naturally, they attempt to attract as many women smokers as possible to their brands, though most women in fact smoke brand~ not tailored to women smokers as a discrete segment of the market. "Cigarette advertising and promotion are not responsible for smoking among women, despite oft-repe~ted claims to'the contrary.21/ First, smoking among.women has been increasing in a number of countries where cigarette advertising is banned, while it has bee~ decreasing in a number of countries where cigarette advertLsing is permitted -- particularly in thi's country. This d;~ta is consistent with the overall evidence (Chapter III), and, once again, supports the conclusion that advertising does not make people start smoking or keep them from stopping. ,~f cigarette advertising were responsible for smoking amon,~ women, the reverse would be true. Second, in countries whe,'e smoking among women has increased, that increase h~s bee,~ part of a general disintegration of sex- based consumptio,-, patterns over the past 20 years. Women and men today arc. purchasing many products that used to be favored by the o~.posite sex. Advertisers, including PRIVILEGED AND CONFIDENTIAL I~roduced as requked by the Court's M~ch 7,1998 Order in St~e Court F~e No.: C1-9@8565 21/ Tobacco Use in America Conference, Final Re~ort 30 (Jan. 1989). TININ0033291

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IV-8 cigarette manufazturers, simply respond to these shifting consumption patterns. If cigarette advertising and promotion were responsible for ~moking among women, one would expect to find increases i~ smoking among women where advertising and promotion are pe:mitted and decreases in smoking among women where advertising and promotion are prohibited. The facts confound that h~0othesis. (:L) Non-Ban Countries United States. Between 1965 and 1987, the inci- dence of smoking among women (aged 20 years and older) declined 16 perc:~nt -- from 31.9 percent to 26.8 percent.. Virtually all of that decline occurred between 1977 and 1987.22/ Yet~ no significant additional advertising restrictions wer:~ imposed after 1977. Canada. Between 1970 and 1985, the incidence of smoking among wo~,~en (all ages) declined 14 percent -- from 32.4 percent to 97.8 percent.23/ pKI~ILEGED AND CONFIDENTIAL Ih:oduced as requked by the Court's M~ch 7,1998 order in St~e oi Minnesota, et i. ~ philip Morriw et ~. Couxt F~e No.: C~94~856~ 22/ Report of the Surgeon General: Reducing the Health Consequences of Smoking, pp. 269-70 (1989). 23/ Government statistics compiled by Professor Jean J. Boddewyn, Evidentiary Submission to the Legislative Committee of the House of Commons Considering Bill C-51, Table i, p. 4 (1989). T]MN 0033292

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IV-9 United Kingdom. Between 1974 and 1986, smoking among women ages 20 and older declined 25 percent -- from 41 percent to 31 pe,~cent.24/ The Ne;:herlands. Between 1967 and 1985, the inci- dence of smoking among women (all ages) declined 21 percent -- from 42 perce,~t to 34 percent.2-5/ Denmark. Between 1975 and 1987, the incidence of smoking among wo,~en declined significantly in most age groups -- from 3C.7 percent to 24.4 percent (nearly 40 percent) among wcmen ages 15-19, from 55.8 to 42.2 percent (over 20 percent) among women ages 20-24, and from 49 to 39.8 percent (abcut 20 percent) among women ages 40-49.2-6/ Korea. Between 1980 and 1985, smoking among women of all ages decreased from ii percent to 6.8 percent.2-7/ PRMLEGED AND coNFIDENTIAL Produced as requked by the CouP's March 7, 1998 C~ ._ St~e o~ Minnesota, et al. ~ Philip Morris, e~ ~.~, Court File No.: C1-94-8565 24/ Pierce, "International comparisons of trends in cigarette smoking prevalence," Am. J. Pub. Health, Feb. • .... 1989, p. 152. 25/ B. Baan, "The Dutch Non-Smoking Approach, "Smoking and Health 1987, p. 785 (eds. M. Aoki, S. Hisamichi & S. Tominaga 1987). See also J. van Reek, "Smoking Behaviour in The Netherlands from 1958 to 1982," 5th World Conference, vol. I, p. 790 (1983). 26/ P. Neilsen, J. Zacho, J. Olsen & C. Olsen, "Aendringer ~ danskernes ryge~aner 1970-1987," Ugeskr Laeger 150/36 - 19 September 1988 - ~denskab og praksis, Table 4, p. 2231. The incidence of ~moking among women ages 25-49 remained stable during thi:~ period. 27/ Korean Institute of Tuberculosis, Surveys on the SmokinQ Habits in Korea, Table 8-3 (1987).

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IV-lO Japan. Between 1966.and 1985, the incidence of smoking among wo, aen (all ages) declined 30 percent -- from 18 percent to 12.6 percent.28/ {~) Ban and Near-Ban Countries Finlan.i. In Finland, cigarette advertising Was completely banne,! in 1978. Between 1980 and 1987, smoking among women (all ages) increased 18.5 percent -- from 15.6 percent in 1980 ;:o 18.5 percent in 1987. An increase in smoking among wo,~en occurred across the board in Finland. Smoking among wo,,~en ages 15-24 increased from 18.6 percent to 20.5 percent; smoking among women ages 25-44 increased from 17.2 percent, to 23.0 percent; and smoking among women ages 45-64 incre~.sed from 11.3 percent to 11.7 percent.29/ Norway. In Norway, cigarette advertising was completely banne,_, in 1975. Between 1976 and 1987, smoking among women (all ages) increased from (about) 38 percent to (about) 43 percent.-- _~ ~DCOM~Iw ~, 1998 0~ !n ~G~U ~" Co~WS MarCh ~' - et ~. Stare o Co .-t No.. 28/ T. Shimao, "Smoking and ~ts Control in ~apan," ~o~ng and ~ea2th 2987~ ~. 53 (eds. ~. ~oki, S. Hisamichi & S. • om~naga 1987). ~ccording to t~is source, ~owever, the incidence o~ smoking among women ages 20-29 recently has been increasing. • 29/ R. Kurkela, Tupakka tupakkalain j~Ikeen, p. 19 (1987). 30/ H. Thurmer, K. Bjartveit & A. Haukness, "Smoking among Norwegian Doctors," Smoking Behaviour and Health 1987, p. 699 (eds. M. ADki, S. Hisamichi & S. Tominaga 1987). TIM_N 033 94

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IV-ll Sweden: In Sweden, cigarette advertising was severely restric:~ed in 1979. Yet smoking was more preva- lent among women aged 35-55 and 65-74 in 1986 than in 1977.31/ While .~moking reportedly was less prevalent among women aged 16-34 and 55-64 in 1986 than in 1977,32/ the prevalence o~ smoking among 16-year-old girls has been increasing since 1984 and the use of smokeless tobacco among Swedish ad¢lescents of both sexes in the last. several years "has increased heavily. ,,33/ (3) The Disintegration Of Sex-Based Consumption Patterns Because antismokers focus only on smoking, they overlook a basic fact: Across a broad spectrum of prod- ucts, women more and more are purchasing products traditionally characterized or seen as "male" products and men more and more are purchasing traditionally "female" products. Trends in cigarette consumption are only one example in this general disintegration of sex-based con- sumption patterns -- a social phenomenon that advertising reflects but for ~hich it is not responsible. uced as req_u.,reu_ prod State o{ Minnesot,*, et .... CoU--'t ~ile No.: Cl.9~-t~ 31/ National Board of Health and Welfare, Tobacco Control in Sweden 2 (1987) (National Bureau of Statistics.). 33/ Id. at 7. TIMN 0033295

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IV-12 During the 1960s, the role of women in society broadened dramatically. Women began to enter the work- force in record numbers. The incidence of divorce also rose, resulting in many more female-headed families.34/ Women increasingly decided to delay, or even forego child- bearing These trends continued during the 1980s and are predicted to continue into the 1990s.35/ As women moved into the workpla:e, and as traditional family structures disintegrated, classical sex-stereotyped consumption pat- terns also erode.~. In discussing consumer products and sex roles, two U.S. experts observed in 1983: "Within every society, it is quite common to find products that are either exclusively or strongly associated with the me,~bers of one sex. In the United States: for example, shaving equipment, cigars., pants, ties, and work clothing were hostorically male products; whereas bracel~.~ts, hair spray, hair driers, and sweet-:~melling colognes were generally consid~.~red to be feminine products. For most o~ these products, the sex link has either diminished or disappeared * * *."36/ 34/ Marketing C~_~mmunications, vol. ii, no. i0, p. 25 (Nov. 1986); Advertisi~!g Age, vol. 57, no. 20, p. 26 (Mar. 13, 1986). 35/ American De,!ographics, vol. i0, no. Ii, pp. 22-26 (Nov. 1988); American Demographics, vol. 8, no. 8, pp. 22-25 (Aug. 1986). 36/ L. Schiffma~ & L. Kanuk, Consumer ~ehavior, p. 443 (2d ed. 1983). TIMN 0033296

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IV-13 This t.~ansformation has been in both directions. In 1970, women bought 23 percent of the new cars sold in the U.S. In 198-~, they bought 45 percent of the new cars sold.37/ As a result "Detroit has recognized women."38/ • With U.S. women now spending upwards of $30 billion aye on new car purchases, automobile manufacturers "are now recognizing women as a valued target market.''39/ Indeed• women now repres::nt the fastest growing segment of car buyers. Ford Mo~:or Company is now promoting even its tractors with women.40/ Manufacturers are advertising ~ condoms to women -- indeed one company advertises onl~ t~ women.41/ Estim~.tes of women condom purchasers range between ten and lorry percent.42/ Other products have ~ actually undergor, e a sex-change operation. Jockey now makes underwear £or women, while Calvin Klein produces boxer shorts for women.4-3/ 37/ American Demographics, Nov. 1988• p. 29. 38/ Marketing Communications, vol. I0, no. ii, p. 100 {Dec. 1985). 39/ Ibid. 40/ Advertising Age, Feb. 27, 1984, p. 57. 41/ Adweek Special Report on Women• Jul. 6, 1987, p. W.R. 18. 43/ Advertising ~ge, Sept. 12, 1988, p. 17. TIMN 0033297

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IV-14 Meanwhile, as women have entered the labor force in large numbers, financial services companies have begun to compete fiercely to sell women credit cards, brokerage services and other products.4-4/- Hotels and airlines have begun to woo women travelers.45/ Yet no one seriously suggests that it is because advertisers "targeted" them~~7 that women are buying a greater proportion of the new car~ sold in the U.S., or increasingly are using credit cards ~ or other financi.~l services or going out of town on ~ business trips. Rather, the advertising followed the ~ Simila~:ly, "men now make numerous purchasing6/ ~ decisions that were once considered women's domain.''4-,- ~ From being nextto nothing 15 years ago, men's fragrance ~ and toiletries n,~w account for $i 7 billion in sales in . the U.S.4-7/ Men are becoming a significant factor in food marketing as wel~..48/ One 1985 study found that men accounted for 40 percent of all food dollars spent, a 44/ Advertising Age, Jul. 16, 1982, p. M-16. 45/ Advertising Age, Aug. i, 1985, p. 4. 46/ Magazine Aga., Spring 1982, p. i0. 47/ Inside Prini~, March 1989, p. 35. 48/ Ma~azine Age, D~c. 1981, p. ~. TIMN 0033298

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IV-15 significant inc~:easeo4-~9/ Cookware manufacturers and food packagers have begun gearing their advertising to male consumers.~0/ ~]ew concern among men for their physiques also has led so~!t drink makers to position their "diet" ~ manufacturer of Taster's Choice instant coffee pulled the ~ image of a woman-, off the product's label and replaced itO ~ with that of a ,~an 52/ O • These data confirm that the consumption' habits ~ o men and womeD are converging across the spectrum of ~ consumer products. The consumption patterns of women with~.~ respect to smoking are simply one instance of this general~ trend• That trend is rooted in the vast transformation in the role of women in Western society over the past genera- tion. Men, in turn, have assumed new responsibilities within the home, complementing their conventional roles, and the line separating the "masculine" from the "feminine" has become blurred. It is this trend that supplies the explanation for ~moking among women today. 49/ Advertising Age, Oct. 13, 1986, p. $4. 50/ Advertising Age, Mar. 14, 1985, pp. 15, 22. 5--1/ Marketing C,~mmunications, vol. ii, no. 3, p. 43 (March 1986). 5--2/ Advertising Age, Sept. 12, 1985, p. 17. TIMN 0033299

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IV-16 Those :~eeking an explanation for smoking among women cannot fin,! it in advertising. Advertising is not responsible for :~moking among women, and banning advertis- ing would not re,~uce smoking among women. Censorship cannot be justif~.ed in the name of "protecting" women from cigarettes. pRIVILEGED AND cONFIDENTIAL l, roduced as ~equired by the Court's March 7,1998 Orde~ in State oi Minnesota, et al. v. Philip Morris, et ai Co~-'t l~ile No.: C1-94-856~ TIMN 0033300

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have increasingl~, relied on promotional activities such as event sponsorshiD and sampling. Advertising Age, a weekly trade magazine, ,'eported last year that "[i]n the battle for growth, sales pr-,motion is whomping general advertising."!/ Cutting across i~~dustry boundaries, sales promotion has been growing 2} times "faster than general advertising.~/ The cigarette indust~y's ratio of promotion to advertising is'in line with the ra~.io for other industries.~/ As with adver- tising, promotioral activities do not aim to advocate smoking. Sales ~romotion includes a wide variety of mar- keting techniques, "ranging from sophisticated computer- driven sampling and testing programs to actors in chicken suits handing out coupons for fast food. ''~/ Standard promo- tional techni~es include couponing, premiums and money-back i/ Advertising Age, p. S-I (May I, 1989). z id. 3/ Cite to come. 4/ Advertising ~ge, p. 13 (Feb. 6, 1986). TIMN 0033301

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offers, sweepstakes, cents-off, sampling and contests. Many manufacturers, sILch as Gillette, also tie their promotions to specific events ~uch as the Super Bowl, Olympics and World Series. Ragu, fci~r example, sponsors an annual Italian Festival that gives retailers a chance to group promotions on olives, spaghett~ noodles, olive oil, meats and vegetables.~/ This is not an altempt to inculcate a taste for olives in the 'general populati~.n but to attract consumers to a particular brand of Italian food. Cigarette manufacturers who rely on similar devices to promote their brands are no different. i. Sampling SampliDg is a time-honored method of introducing consumers to new brands of a product or reintroducing them to old ones. Tobacco product sampling is directed toward adults who are already smokers -- not to nonsmokers or to children. Indeed, in almost every state the sale and distribution of cigarettes to minors are prohibited by law, and the cigarette manufacturers themselves subscribe to a code of sampling pra6tices that prohibits the distribution of cigarette samples to persons under 21. Many states also make purchase or possession of tobacco by children a civil or criminal offen~e. Vigorous enforcement of state laws 5/ Id. at 26. TIMN 0033302

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D cO~ ~ ~u~ be suffic.en~ to address any problem in this regard that may be thought to exist. 2. Trad~rks Some h~ve proposed banning the use of tobacco product trademarks in connection with nontobacco products. Such proposals m~.stakenly assume that the use of such trade~rks in a ,~ontobacco context is an indirect means of advertising or p~omoting tobacco products. In fact, trade- mark "transferen,~e" is not a promotional technique at all. Rather, it is a ,~eans of exploiting a trademark that has become known and therefore has value. Perhap~ the best example of this phenomenon is the "designer label." Internationally known clothing designers s~ch as Calvin Klein, Yves St. Laurent and Ralph Lauren have licensed their names for use on products ranging from eyeglasses and underwear to umbrellas and bedsheets. Few would maintain that an advertisement for cologne under the "Polo" trademark is an indirect advertisement for "Polo" shirts or jeans. It is, instead, a standard attempt to sell a new brand in one product category by taking advantage of a trademark made po@ular in another. The same is true of marketing a nontobacco product under the trademark of a tobacco product. The val~e of trademark transference from one product category to another is underscored by the vigorous efforts TIMN 0033303

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ma~e by ~rademarK ogne~s ~o preven~ o~ers ~rom for example, sue~ their brother Joseph for trademark infringe- ment for marketing cheeses under the Gallo name. No one claimed that Joseph was attempting to promote Gallo wine. Similarly, Fabbr[en D'~i Pietro Beretta, the gunmakers, sued General Motors for the latter's unauthorized use of the B~retta nam~ to ~nacket a compact car. Clearly, GM's use of the name "Berett-~" for its car was not a charitable effort to encourage gun sales. Rather, GM obviously chose the name "Beretta" in order to help sell a new car. The tobacco industry believes that smoking is a.n adult activity, ,~nd therefore it does not countenance associations of its products with products which are used primarily by you~h. Consistent with that position, no .tobacco company i~as ever authorized any manufacturer of youth-oriented i~ems (including video games) to incorporate into their produ.~ts any tobacco product package, logo, trade name or trademark. The tobacco companies consider any such use as a violaticn of their trademark rights, and, as with any trademark in£ringement, take legal action to protect those rights. 3. Movie Product Placement Arrangements involving the paid use of tobacco product brand names in motion pictures are relatively rare TIMN 0033304

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compared with th~ number of paid placements forother prod- uct categories. There have been literally thousands of U.S. movies made in t~e last ten years. Cigarette manufacturers have paid for the use of their brands or signage in only a ~few these • of fi1,.s. • " Film,sakers use products in films to achieve ~ realism or other artistic effects. Sometimes, the filmmaker ~_~ay seek payment from a manufacturer in return for using the ~ ~manufacturer's b.:and instead of a competitor's. Suggestions ~that such placements be banned are nothing more or less than a proposal to censor film content. However well intentioned, such paternalism is no justification for government censor- 4. Event Sponsorship Sponso.,ship makes possible events as diverse as art exhibitions in m;~jor or local museums, symphony hall concerts, folk festivals, tennis tours and racing competitions. Banning brand sponsorshi[~ of cultural and athletic events will have no effect on smokin,~l, but it will have many adverse consequences for sporting and cultural activities. S~onso~ship bans and restrictions intrude on the right of private groups and individuals to freely select their own sponsor. As Richard Luers, President of New York's Metropolitan Muscu~ of Art, has observed: "[P]rivate sector support of the arts involves two basic freedoms of choice; the TIMN0033305 •

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V~5 compared with the number of paid placements for other prod- uct categories.. There have been literally thousands of U.S. movies made in the last .ten years, Cigarette manufacturers ~have paid for the use of thelr brands or signage in only a ~few of these films. Pil~makers use product~"~.o~-'-5i~:.~.~.~i.~:,;_:.~~/. realssm or other artistic effects .... ~.Z~ may seek payment from a manufactur~£?-.~-(-.~ such paternalism is no 3"ustificat[o~---f~rg ship. 4. Event Sponsorship Sponsorship makes possible events as diverse as art exhibitions in m~jor or local museums, symphony hall concerts, folk festivals, ~:ennis tours and racing competitions. Banning brand sponsorship) of cultural and athletic events will have no effect on smoking, but it will have many adverse consequences for sporting and cultural activities. Sponso,:ship bans and restrictions intrude on the right of private groups and individuals to freely select their own sponsor. As Richard Luers, President of New York's Metropolitan Mus~um. of Art, has observed: "[P]rivate sector support of the arts .involw~s two basic freedoms of choice; the TIMN 0033306

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potential sponsor may or may not wish to participate; the potential grantee mayor m n ay ot wish to accept what has been ~ proffered. These two freedoms serve to ~ ~ ratlon~lize both the buslness and cultural ~ ~ interest in terms of the ultimate societal ~ interests. They need not, in our opinion, ~" ~ be further curbed in unnecessarily restric- ~ In addition to their interference with the right of ~ . p ...~~i~ ~ee choice, sponsorship restrictions can have devastating ~inancial effects on recipient organizations. The support ~hat cigarette m.~nufacturers contribute to such events is ~ubstantial. In some cases., it has made the difference in ~whether the eveni: will be held at all, or the way in which a sport, such as women's tennis, is perceived by the public. Its loss would h;~ve severe financial and other consequences for those who depend on it. Replacing so important a source of private funding would be difficult, and frequently may be impossible. It .s not enough to point to one or two events wh{ch, thanks to earlier support, are now economically viable or which could draw other sponsors. One also must consider whether the evenh could have achieved its current viability without steady s,~pport over the years. In the absence of this support, the, next event may never have an opportunity to become viable. ~/ "Arts Progrc.m Publisher Hits Measures to Ban Tobacco Ads," The Washington Post, p. F-7 (August 12, 1987). TIMN 0033307

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V-7 Corporate sponsorship means much more than simply providing funds. Experience and knowledge of mass marketing, ~for example, can be critical to the success of a sporting or artistic event, ~articularly events with which the general public is unfamiiiar. Mass marketing expertise plays an especially critical role in "democratizing" various cultural events. For example a touring display of Vatican art treasures sponsored by Phi.ip Morris in 1983 brought in scores of ~~viewers who had ,lever been to an art museum. Similarly, the appeal of countrl, music in the U.S. and dart-throwing tournaments in B~'itain has been broadened to include fans. of all classes and ~'aces. In add~.tion to public relations expertise and services, sponsors often provide logistical and operations support and ancillary event staffing as needed. They help create and maintain sound financial management programs to ensure the long-term viability of the donee organizations. They also donate computer tim~, advertising space, constrdc- tion help, office space and transportation. They commission art for display in the workplace and make lobbies available for exhibits. The claim that sponsorship is a form of advertising that influences people to smoke is unfounded. There is no basis for the supposition that seeing a cigarette brand TIMN 0033308

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name on a racing car, or associating a brand name with a ~'azz festival or a tennis tournament, will make anyone start ~smoking or dissu~de anyone from stopping. Indeed, as dis- cussed above, th~o evidence shows that even total advertising ~.~bans have not be~n effective in reducing smoking. There is even less reason to believe that brand or company sponsorship ~bans would have ;n effect on the incidence of smoking. By ~any age may be overcome with an irresistible urge to begin smoking simply b._cause they occasionally attend an event like a Virginia ~lims tennis tournament, a Kool Jazz Festival, or a Winston Cup stock car race. Moreover, the. cigarette manufacturers do not sponsor sports or cultural events held primarily for children. Claims that event sponsorship is a form of adver- tising that encourages smoking also overlook the basic pur- poses of corporate sponsorship and philanthropy. The central goal of most corporate sponsorship is not to advertise a particular product or brand. Rather, sponsorship is a means both of enhancing a corporation's image and repaying the loyalty of its consumers and communities. It demonstrates a corporate donor's responsibility to society and its good citizenship. Equally important, sponsorship enriches a corpo- ration's internal culture by boosting morale and encouraging creativity. Employees feel an extra sense of pride when TIMN 0033309

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they work for a company that honors the arts and contributes to the life of t~e community. Philanthropic activities by corporations have been increasing generally, and tobacco ~companies are no exception to that trend. Sponsorship bans and restrictions reduce the right ~of private groups and individuals to freely choose their own " ~sponsor. They threaten the very existence of many valuable ~ sporting and cultural endeavors. They are a form of censor- ~S . They punish, hip that is contrary to democratic values ~~ather~m~ than encourage, altruistic behavior by private com- panies. At the s~e time, sponsorship restrictions offer no positive benefits. Reducing or eliminating tobacco sponsor- ship will have no effect on the incidence of smoking among either adults or .ninors. 5. Vending Machines ProposaLs to ban cigarette vending machines are wide of the mark. Nearly eight out of ten cigarette vending machines are located in places where young people under 18 are not allowed o~: rarely frequent -- such as bars and cock- tail lounges, industrial plants, offices, hotels and motels. In other location:~ -- such as restaurants, service stations, retail stores and other places -- the owner or manager of the establishment typically is present and is able to monitor and supervise suc~ sales. In establishments that minors TIMN 0033310

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V-10 widely patronize -- notably, fast food restaurants -- cigarette vending machines are rarely found. A receipt study by the Michigan Distributors and Vendors Association, for example, found that of the 4,048 machines surveyed, 95.6 percent were located in places wher~ ~ minors either ar,~ not allowed or are well supervised. Over 70 percent of th:~ machines were located in factories, offic.~ or bars. An addl.tional 5.6 percent were located in hotels and motels, and ].4.3 percent were located in restaurants, where the machin:~!s are directly monitored,z/ The ve,.ding machine industry is a responsible industry that hat followed for 27 years a self-regulation~ program designed to ensure that vending machines are not a source for cigarcttes for minors.~/ The success of this program can be demonstrated by studies that consistently [/ Survey by the Michigan Distributors and Vendors Association (1988). ~/ The vending industry's six-step program of self-regulation, adopted in 1962, includes, among other things, removing machines from locations where the sale of cigarettes to min~rs cannot be prevented and soliciting the location owner's ~ooperation to prevent minors from purchasing cigarettes from vending machines. See Hearing on H.R. 1250 before the Subcomm. on Transportation and Hazardous Materials of the House Comm. on Energy and Commerce, 101st Cong., Ist Sess. (1989) (statement of Richard W. Funk, Chief Counsel,-National Automatic Merchandising Association, pp. 1-2). TIMN 0033311

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V-ll show vending machines to beat most a minor source of cigarettes for persons under 18 who smoke. Certainly no one wants to see minors smoke. The cigarette manufacturers have gone on record supporting state laws prohibiting under-age smoking and ensuring that vending machines are always under adult supervision. Buh banning all vending machine ~ales of cigarettes will do nothing to stop such sales. The industry, which depends on tobacco sales for a significant portion (over 14 percent) of its revenue,~/ should not be ma.~e to suffer unjustly for a ban that will not achieve its stated end of reducing smoking by young people. pRIVILEGED AND cONFIDENTIAL ~z.~duced ~ ~quired by the Court's March 7,1998 Order State of Minnesota, et al. v. Philip Morris, et ai Court File No.: C1-94-8565 9/ Vending Tim~s, Census of the Industry Issue (1989), p. TIMN 0033312

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~ 0~ ~ ,~ CONCLUSION ~ ..0~ • Michael Per tschuk ~¢ ~ Former Chair~n • ~¢5~0~ Federal Trade Co~ission The wo~id-be censors o~ cigarette advertising have utterly faired to support their premise that adver- tising is respon:~ible for smoking. They acknowledge that f~ily and peers are the principal influences on the deci- sion by young people to start smoking, while gover~ent- sponsored research finds smoking by young people to be on the rise in count:ties where tobacco product advertising is banned and smokiag among young people to be the most preva- lent in such ban countries. Government statistics and gover~ent-sponsored research from around the world also confirm that adv:~rtising restrictions cannot be related to smoking by adult:~. In light of this evidence, it is not surprising that leading ant .smoking advocates, such as Dr. Kjell Bjartveit of Nor~Tay, have refused to "accept the challenge" to demonstrate that banning tobacco product advertising .i/ "Smoking Co~ttrol and Media Advocacy," Smoking and ~ealth 1987, p. ,~3 (eds. M. Aoki, S. Hisamichi & S. Tominaga 1987). 0033313

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.................................... " .......... v-~z/e C , ~e/-/~ -'~-~ ...................... - " COeC~U-2Co ~ et a] s ~a_rc~ wou~d ~educe smo~:~ng among young people o~ adu~Ls.~/ Onde~ o~,sysLem, Lheb~den ~esLs w~Lh Lhe p~oponenLs o~ bans and the gover~ent t,) justify restrictions on speech; the speaker is not required :o prove that his speech should be allowed. Even i~ it were the responsibility of the tobacco, advertising and ))ublishing industries to show that an adver- tising ban would not result in reduced smoking by young people or adults, this paper "proves the negative" -- insofar as that is ever oossible. The evidence demonstrates that banning cigarette) advertising would not reduce smoking in this country. I:: confirms the thesis that cigarette adver- tisin'g is not a :)ignificant determinant of smoking. While the evidence sho~s that banning cigarette advertising would not reduce smoking, it would violate our basic co~itment to individual autonomy and free choice, stifle competition among the cigarette manufacturers, and cause severe hardship for other indust,:ies as well. For th,)se reasons, banning cigarette advertising, or imposing rest.'ictions on the content of cigarette adver- tising that woul([ be tantamount to a ban, cannot be justified in a free society. ~/ Bjartveit, "Legislation and Political Activiiy," 5th World Conference, vol, i, p. 36 (1983). TEVIN 0033314

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