Abstract
This internal Philip Morris memo recounts from the industry's point of view how Canadian tobacco control advocates made such strong in-roads against the industry in Canada. It describes what the industry considers effective strategies used by its opposition. The document tells how Canadian advocates,
"...decided to play hardball with the tobacco industry, countering every [industry] move with their own strategic response. They carefully timed their press releases to coincide with actions by the industry, and their headlines were bold and provocative: WILL TOBACCO INDUSTRY DECEPTION OUTMUSCLE PARLIAMENT? or GANGRENE AND TOBACCO. They accused legislators of collusion with the industry, or conflict of interest, by scheduling news conferences in the legislators' own districts and suggesting that their constituents question the integrity of their elected representatives. They retained Canada's most prestigious law firm to deliver an opinion on the personal liability of tobacco company executives for failing to warn the public that cigarettes are lethal and addictive. When that opinion stated that, according to Canadian tort, charges of criminal negligence could be filed against the executives, the organizations stood mute for nine months until the day the tobacco industry was making its case against the proposed Tobacco Products Control Act before the House of Commons. The news headlines then screamed: JAIL TOBACCO BOSSES, GROUP SAYS."
The document also describes the industry's responses to the developments in Canada. These include filing lawsuits against the Canadian Tobacco Products Control Act (which increased cigarette taxes, banned major forms of tobacco advertising, provided smoke-free workplaces and public places, limited brand-name sponsorships and provided for stronger warning lables on packaging), tobacco farmers filing suit against the Canadian government for excessive cigarette taxes, spending millions on campaigns that portrayed the tobacco industry as defenders of freedom of speech, offering more coupon discounts to get around the increased tax, advertising in American magazines that are read widely in Canada to get around the advertising ban, etc., incorporating new companies under their most popular brand names so they could contiue sponsorships, plus:
"Small shopkeepers were enlisted to write protests to members of Parlaiment; the letters 'some with deliberate typographical errors to create an aura of authenticity,' were prepared by the industry for the shopkeepers.
Rather than reveal additives in its cigarettes, RJR-Macdonald stopped using them.
Fields
- Quotes
There are only three cigarette manufacturers in Canada:
Imperial Tobacco Ltd.
RJR-Macdonald
Rothmans-Benson & Hedges
These companies explain the proliferation of anti-tobacco legislation in the country as a direct result of the wide publicity about the alleged effects of environmental tobacco smoke. Apparently Canadians are extremely environmentally conscious and have allowed these policies to encroach on their personal freedoms in the name of environmental protection....
On the other hand, it appears that much of the credit for the anti-tobacco movement in Canada belongs to the combined forces of the Nonsmokers' Rights Association and the Canadian Cancer Society. These organizations have decided to play hardball with the tobacco industry, countering every move with their own strategic response. They carefully timed their press releases to coincide with actions by the industry, and their headlines were bold and provocative: WILL TOBACCO INDUSTRY DECEPTION OUTMUSCLE PARLIAMENT? or GANGRENE AND TOBACCO. They accused legislators of collusion with the industry, or conflict of interest, by scheduling news conferences in the legislators' own districts and suggesting that their constituents question the integrity of their elected representatives. They retained Canada's most prestigious law firm to deliver an opinion on the personal liability of tobacco company executives for failing to warn the public that cigarettes are lethal and addictive. When that opinion stated that, according to Canadian tort, charges of criminal negligence could be filed against the executives, the organizations stood mute for nine months until the day the tobacco industry was making its case against the proposed Tobacco Products Control Act before the House of Commons. The news headlines then screamed: JAIL TOBACCO BOSSES, GROUP SAYS.
The two societies state that their key to success was "the recongition of the hopelessness of the traditional strategies, such as trying to fight the plague of tobacco-induced diseases with sweet reason, gentle persuasion and endless fund-raising for biological research." ...They instead used advertising and public relations to win the support of the man int he street and lobbying to make allies of the legislators and publishers. The lesson they have taught the world is: "Politicians are sure to hear you when you take your case to the public." Or to put it another way, Kenneth Kyle, a Canadian Cancer Society lobbyist, asked,: "Why spend millions on microbiologists and not on lowyers, if the lawyers will be more effective in fighting the tobacco epidemic?" After the passage of the Tobacco Products Control Act, William Neville, the primary lobbyist for the tobacco industry, "grudgingly" reveald what the Canadian antismoking lobby had done: "Clearly one of the successes of the anti-tobacco lobby was to make this appear to be a health issue, and when that happens that is a difficult area for the industry."
As early as 1984 the Nonsmokers' Rights Association showed its stell when it lost its campaign to prevent the sponsorship of the Canadian Ski Association's team in the national championships by RJR-Macdonald (Export A brand). So much media attention was paid to the issue that the health minister and the minister of fitness and amateur sport adopted a policy whereby for every dollar national sports bodies receive from the tobacco industry they will lose a equal amount from their federal funding....
By the winter of 1987 an extensive campaign to convince leading newspapers to reject tobacco advertisements had resulted in success among five major Ontario dailies, accounting for 20% of the circulation throughout all of Canada. These were shortly joined by The London Free Press and Montreal's Gazette, the former widely read in tobacco-growing areas of the country and the latter being the largest daily in Eastern Canada. By way of comparison, only eleven American newspapers, mostly small dailies representing 0.6% of daily circulation, have adopted such a policy.
We have looked at the 1988-1990 press relevant to the Canadian situation and can identify the following pieces of legislation. Their passage was given the ultimate boost when the Nonsmokers' Rights Association, using its uncanny timing, began 1988 with an advertisement in Canada's most influential newspaper, the Globe and Mail, featuring a photograph of two friends who would rather have kept their relationship secret: Brian Mulroney, the prime minister, and William Neville, president of the Canadian Tobacco Manufacturer's Council...
- Company
- Philip Morris Cos., Inc.
- Author
- DeBardeleben, M. Z.
Assistant Professional
- Recipient
- Sanders, E.B. Dr.
RegionCANADA
LitigationN/A
TypeMemorandum
SubjectEnvironmental Strategies
Industry Strategies
Lawsuits
legislation
Legislatures
smoking bans
strategy
Taxes
Warning Labels
workplace smoking restrictions
Activist Strategies
Document Images
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PHILIP MORRIS U: S. A.
INTER-OFFICE CORRE'SPONDENCE
Richmond, Virginia
To: Dr. E. B. Sanders Date: 1990 August~ 10
From: M. Z. DeBardel6ben
Subject: Industry Resl2onse to, and Impact of. Anti-Tobacco Legislation in Canada
There are only three cigarette manufacturers in Canada:
Imperial Tobacco Ltd.
RJR-Macdonald
Rothmans-Benson & Hedges
These companies explain the proliferation of anti-tobacco legislation in the country as a direct
result of the wide publicity about the alleged effects of environmental tobacco smoke.
Apparently Canadians are extremely environmentally conscious and have allowed these
policies to encroach on their personal freedoms in the name of environmental protection.
However, as early as last summer [Tobacco Reporter, August 1989] it was reported that "there
are increasing signs that many Canadians. ..are beginning to react against this particular brand
of extremismL"
On the other hand, it appears that much of the credit for the anti-tobacco movement in Canada
actually belongs to the combined forces of the Nonsmokers' Rights Association and the
Canadian Cancer Society. These organizations have decided to play hardball withi the tobacco
industry, countering every move with their own strategic response. They carefulliy timed their
press releases to coincide with actions by the industry, and their headlines were bold'. and
provocative: WILL TOBACCO INDUSTRY DECEPTION OUTMUSCLE PARLIAMENT?
or GANGRENE AND TOBACCO. They accused legislators of collusion wiff the industry, or
of conflict of interest, by scheduling news conferences in the legislators' own districts and
suggesting that their constituents question the integrity of their elected representatives. They
retained Canada's most prestigious law firm to deliver an opinion on the personal liability of
tobacco~ company executives for failing to warn the public that cigarettes are lethal and
addictive. When that opinion stated that, according to Canadiani tort, charges of criminal
negligence could be filed against the executives, the organizations stood mute for nine months
until the day when the tobacco industry was making its case against the proposed Tobacco
Products Control Act before the House of Commons. The news headlines then screamed:
JAIL TOBACCO BOSSES, GROUP SAYS!
Page 2: cbs02a00
The two societies state that their key to success was "the recognition of the hopelessness of the
traditional strategies, such as trying to fight the plague of tobacco-induced diseases with sweet
reason„ gentle persuasion, and endless fund-raising for biological research." [The Washin2ton
Monthly, July-August 1990]i They instead used~ advertising and public relations to win~ the
support of the man in the street and lobbying to make allies of the legislators and publishers.
The lesson they have taught~ the world is: "Politicians are sure to hear you when you take your
case to the public."' Or to put it another way, Kenneth Kyle, a Canadian Cancer Society
lobbyist, asked: "Why spend millions on microbiologists and not on lawyers, if the lawyerss
will be more effective in fighting the tobacco epidemic?" After the passage of the Tobacco
Products Control Act, William Neville, the primary lobbyist for the tobacco industry;.
"grudgingly" revealed what the Canadian antismoking lobby had done: "Clearly one of the. .
.successes of the antitobacco lobby was to make this appear to be a health issue, and when that
happens that is a difficult' area for the industry."
As early as 1984 the Nonsmokers' Rights Association showed its steel when it lost itss
campaign to prevent the sponsorship of the Canadian Ski Association's team in the national
championships by RJR-Macdonald (Export A brand). So much media attention was paid to
this issue that the health minister and the minister of fitness and amateur sport adopted a policy
whereby for every dollar national sports bodies receive from the tobacco industry they will lose
an equal amount from their federal funding.
By the winter of 1987 an! extensive campaign to convince leading newspapers to reject tobacco
advertisements had resulted! in success among five major Ontario dailies, accounting for 20% of
the circulation throughout all of Canada. These were shortly joined by The London Free Pre r.
andMontreal's Gazette, the former widely read in the tobacco-growing areas of the country
and the latter being the largest daily in Eastern Canada. By way of comparison, only eleven
American newspapers, mostly small dailies representing 0.6% of daily circulation, have
adopted such a policy.
We have looked at the 1988-1990 press relevant to the Canadian situation and can identify the
following pieces of legislation. Their passage was given the ultimate boost when the
Nonsmokers' Rights Association, using its uncanny timing, began 1988 with an advertisement
in Canada's most influential newspaper, The Globe and Mail, featuring a photograph of two
friends who would rather have kept their relationship secreti: Brian Mulroney, the prime
minister, and William Neville, president of the Canadian Tobacco Manufacturers' Council.
-2-
Page 3: cbs02a00
Legislation
7/88' Tobacco Prodticts Cbntrol Act (a single violation carrying al fine of up to
$250,000), to be implemented' as follows:
1/89 All tobacco advertisement banned from magazines, newspapers,
radio, and television (radio and television advertising was
voluntarily withdrawn by the manufacturers in 1971); no
advertising of Canadian tobacco products in foreign magazines
sold in Canada; all tobacco sponsorships must be held under the
corporate rather than the brand name of a tobacco product;
rebates on tobacco products illegal; no new in-store
advertisements; distribution of free samples prohibited; use of
tobacco brand names on nontobacco items (mugs, hats, shirts)
prohibited
Company d'efenses against smokers' lawsuits were weakened by
disallowing the use of government warnings as a shield from
liability "if the companies had known of but failed to disclose
particular additional healthh hazards relevant to the litigation"
1/91 All tobacco advertisements on billboards banned
1/93 All tobacco advertisements in retail stores, including brand-
relatedmaterials; banned
1'/89 164% increase in fed'erali taxes on cigarettes over 1/85 (plus additional
provincial' taxes)
1/89 Non-smokers' Rights Act, involving:
All smoking, banned in federal workplaces; tobacco put under the
H'azardous Products Act, smoking severely restrictedl in buses and other
forms of public transportation; except for designated areas, all smoking
prohibited in federally regulated workplaces (banks, broadcasting
studios; government agencies)
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7/89 Emplbyers required to set aside 75% of space in offices and factories as
non-smoking areas
Health warnings must be at the top of billboards and must occupy at least
20% of the space (for billboards erected after this date)
8/89 Smoking prohibited by House of Co mmons staff and visitors (but not by
members of Parliament or their staff)
10/89 Tax increase on fine-cut tobacco for roll-your-own cigarettes
11/89 Unattributed health warnings (4 rotating messages) must cover at least
20% of front and back of cigarette packs:
Smoking reduces life expectancy
Smoking is the major cause of lung cancer
Smoking is a major cause of heart disease
Smoking during pregnancy can harm the baby
1/90 54% increase in federal taxes on cigarettes over 1/89 (plus additional
provincial taxes)
1/90 Additional 4 unattributed health warnings (8 rotating messages):
Smoking is addictive'
Sidestream smoke can harm non-smokers
Smoking causes lung disease
Smoking causes strokes;
must cover at least 25% of front (in English) and back (in French) of
cigarette packs; must be in black and white print; must be at top vs:
bottom of package; pack must contain an insert to elaborate on the
Ttiis is a "world firsu" The tobacco industry has successfully defeated all attempts to printthis
warning on~packages
in every country where it has been sought, other than in~Canada.
-4-
Page 5: cbs02a00
warnings, and this insert must hinder the removal of the cigarettes by
the consumer; the "toxic contents" of tobacco smoke must be listed on
the side of the pack; tar and nicotine data listed on the packs must use
the ISO method2 ; CO content must be listed on the side of the pack;
fine-cut products for roll-your-own cigarettes must list tar, nicotine, and
CO values, even though there is no standard method for determination
[All of the above is to be phased in beginning 1i/91 with full'i
implementation by 6/9l]
7/90, Smoking banned on Canadian airline flights of less than 6-hour duration
[originally part of the Non-smokers' Rights Act]
1i1i/90 Cigarettes destined for sale in Ontario must have yellbw band on packs
stating "Ontario"; all cigarettes made for export must have message on
pack, "Only for sale outside Canada"
1/91 Additional value-added tax of 7%
Industry Response
Reactions to the legislation in Canada have been varied. As noted above, there is some hope
for the industry in the reported feeling that Canadians are beginning to object to so many
infringements. But although the following "reactions" have been documented in the trade
press, it does not appear that the tobacco industry has waged an aggressive or innovative war
against the growing anti-tobacco sentiment.
Lawsuits
Imperial Tobacco and RJR-Macdonald have filed a joint suit in the
Superior Court in Quebec against the Tobacco Products Control Act
' The ISO method requires smoking,to a shorter buttlength~ thereby providing greater numbers for tar
and nicotine.
-5-
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Imperial Tobacco and~ Rothmans-Benson & Hedges have filed a joint
suit in the Superior Court in Quebec against the Tobacco Products
Control Act
Rothmans-Benson & Hedges has filed a suit in the Federal Court in
Toronto against the Tobacco Products Control Act
Canadian tobacco farmers have filed a suit against the federal
government for excessive fed'eral and provinciali cigarette taxes
Public Relations
Multi-million dollar campaigns portrayed~ the tobacco companies as
defenders of the freedom of speech, even~ if tobacco products ads were
to be directed at children under thirteen ("Children under 13 today, so
why not 114, 15; or 16 tomorrow?")
Examples of the "failed" advertising bans in the Scandinavian
countries were touted'
Small shopkeepers were enlisted to write protests to members of
Parliament; the letters, "Some with deliberate typographical errors to
create an, aura of authenticity," were prepared by the industry for the
shopkeepers'
A press event in Toronto, sponsored by Rothmans and including
"recruits" from the arts community, denounced the Tobacco Products
Control Act as "potentially dangerous because, by ending the
promotion of tobacco products, it would starve culture and
sports"'
~
7.
~
' The Canadian Cancer Society reacted to this tactic of the industry by bringing the chairman of the
Norwegian Council r.~
,~
on Smoking and Health to Ottawa, where he produced evidencethat the ban hadl worked. .
' A full-page advertisement in the press divulged this tactic to the public, further discrediting
the tobacco industry,
and preventing their use of approximately an additional 800;000 names on their mailing lists.
' However, the anti-tobacco forces gathered1our times as many artiststo speak against tobacco
sponsorship.
w
M
-6-
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Corporate Reorganization
Imperial Tobacco and RJR-Macdonald have incorporated new
companies under their most popular brand names so that they can
continue sponsorships (e.g., duMaurier Ltd.); Rothtnans-Benson &
Hedges did not have to take this step, for obvious reasons
Rothmans-Benson & Hedges has closed a manufacturing plant in
Mount RoyaL outside of Montreal
Patrick J. Fennell, CEO/president of Rothmans-Benson & Hedges, has
publicly stated that inevitably the 3 manufacturers will become 2; in
3-5 years Rothmans will begin to diversify
All three manufacturers are considering increasing their sales staff to
promote brands "personally" under the advertising ban
Promotions
Manufacturers began offering discounts to consumers in response to the
excessive taxes, and this retail price discounting is on the increaseb
Manufacturers are considering more brightly-designed, eye-catching
packaging to off-set the 25% required warnings
RJR-Macdbnald changed~ the packaging of its Vantage brand to match
the U.S. packaging, since 65% of all magazines read in Canada are
from the Ui.S. and they hope to piggyback on U!.S. advertising'
Imperial Tobacco and Rothmans-Benson & Hedges have decided not to
erect any new billboards, because of the health-warning requirernents;
6 Rothmans-Benson:& Hedges is being sued over tftis,since rebates are illegal under the Tobacco
Products Control Act.
RBH maintains that discounts are not rebates.
' Canadian smokers are considered the most brand-loyal of any in the world. There seems to be some,
but littlu serious,
concern about Canadians switching to U.S. brands because of products advertised in Canadian-read
foreign magazines.
-7-
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although RJR-Macd'onald said that it would continue to advertise on
billboards; it has not erected any new ones either
Introductions
The only new product we can identify is Superoll 200 Nkimber 7'
Supercut, a fine-cut roll~your-own product introduced by Rothmans-
Benson & Hedges 11/89'
F lalout
Rather than reveal additives iri its cigarettes, RJR-Macdonald stopped
using them; Philip Morris stopped shipments of its cigarettes into
Canada
Manufacturers withheld remittance to the government of increased
sales taxes of 0.50/package in 4/89 until the federal budget was passed
in 12/89, allowing the manufacturers to enjoy the interest on almost
$630 million
Manufacturers expect that the cost of changing their packaging so
frequently to comply with the required warnings will prompt them to
eliminate small or marginal brands from~their product lines
Smuggling has become a booming business, both inter-country and inter-
provincial; the resident Indians have also discovered a source of income
with black-market tobacco products, since they are allowed~ to
purchase without paying the excessive taxes
The duty-free shops have become a goldmine for Canadian cigarette
manufacturers on both sides of the Canadian/U.S. border; exports are
up
` We cannot verify this through J. E. Wickham, since he no longer follows the Canadian market
-8-
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The anti-tobacco coalition is now trying to push through legislation
requiring all cigarettes to have generic packaging; they also are trying
to place a ban on all chewing tobacco
Decreased sales (down 6.66% in 1989 over 1988) are being attributed
by the industry to increased taxes rather than to "changes in the
incidence of smoking":
1989 1988
160 brands/extensions 169 brands/extensions
4900 mfg employees 5041 mfg employees
Scandinavian Countries
Of related interest is the effect of the ban on~ tobacco advertising in Norway, Finland, Denmark,
and Sweden. Sweden is a snuff (snus) market; Denmark is a cigar/cigarillo market; Norway is
a fine-cut market; Finland is a cigarette market. The tobacco industry in Canada has pointed to
these studies to show that advertising bans are not effective. As stated above, the Nonsmokers'
Rights Association and Canadian Cancer Society arranged for the health minister from Norway
to appear before Parliament to refute these industry claims:
inl n d
A ban; on the advertisement~ of tobacco products, along with far-reaching
smoking restrictions, was instituted in 1973. The tobacco productss
market is growing.
Norway
A ban on the advertisement of tobacco products was instituted in 1975.
The market for tobacco products is considered steady, with a rise in
cigarette demand off-setting a decline in smoking tobacco demand.
-9-
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Denmark
There is very little anti-tobacco legislation in Denmark, with the
exception of advertising directed at youth. However, the country hass
been experiencing, a steady decline in~ the consumption of tobacco
products.
Sweden
Restrictions on smoking have been in~ place since 1971, and an
advertising ban is presently planned. With the exception~ of the fine-cut
products, the tobacco rnarket! in general has shown a steady decline.
Analysts explain~ the situation~ in the Scandinavian countries by out-of-sight/out-of-mind, i.e.,
"the ban on advertising has made the 'enemy' invisible." There are no longer discussions and
debates about the effects of tobacco consumption in the press or on the radio or television, with
the bans in effect in Finland and Norway for so very many years. And the consumers therefore
follow their own minds. However, the theory that advertising does not affect tobacco
consumption is not widely held outside the industry, and anti-tobacco factions still point to the
decline of consumption in Canada as a direct result of the advertising ban and other restrictionss
rather than the severe increases in taxation.
cc: Central! File
