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Tobacco Industry Outsmarts Ban
|by Dinesh C. Sharma|
Indian sportspersons no more wear the logo of a cigarette manufacturer on their sleeves, nor do we see those "made for each other" hoardings on bus stops or on slides in movie theaters. All forms of tobacco advertising including sports sponsorship are supposed to have come to an end following the ban imposed in May 2004.
The Indian tobacco control law - Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 - is among the toughest in the world. But apparently, this hasn't dampened the spirits of the industry, which has come up with several ingenious ways of keeping their brands in public view. In fact, visibility of some brands has gone up after the new law came into force.
Cigarette companies are taking advantage of loopholes in the law. While banning all forms of advertising - print, radio, television, outdoor, film and so on - the law exempts point-of-sale displays not exceeding 60 cm by 30 cm. And this is being fully exploited by all tobacco manufacturers.
In several cities, paan and cigarette vendors are flooded with displays from cigarette companies, but the size of such displays is much bigger than that specified. So the displays look like mini-hoardings. Since the number of retail outlets selling cigarettes and gutka (paan masala with 15 to 40 per cent chewable tobacco) runs into millions (throughout the country), this has opened up a whole new avenue of advertising. And it is not practical to deal with such a large number of violations.
"The law allows two boards with the top 25 per cent devoted to warning and only the picture of a product without any promotional message. Now, every shop has at least two boards, sometimes more. And nowhere does the warning area seem to be 25 per cent," points out Dr Prakash C Gupta (Director, Healis Sekhsaria Institute of Public Health, Mumbai). "I have also seen flashing and rotating models of cigarette packets of specific brands."
As a result of enhanced point-of-sale advertising, ad budgets of companies have risen. A ban on advertising should have meant a fall in ad spends, but these figures are projected to go up further. Before the ban was imposed, the annual advertising budget for cigarettes was about Rs 3 billion (1US$=Rs 44). A year after the ban, this figure is projected at Rs 3.5 billion, according to a recent report of the Ministry of Health and Family Welfare. Similarly, manufactures of gutka and other tobacco products have also raised their ad budgets. "Tobacco companies are using their money power to circumvent the spirit of the law," says the health ministry report.
Leaving out pan masala from the advertising ban despite scientific evidence connecting it with adverse health conditions is yet another loophole being exploited by the industry. Advertising of gutka is banned under the law. To overcome this, gutka manufacturers are now advertising pan masala bearing the same name as gutka and highlighting that pan masala is a non-tobacco product. Gutka brands such as Goa 1000 and Simla are doing this. Similarly, 502 pataka, a popular beedi brand, is now being advertised as 502 pataka tea.
"These new brands have names identical to their tobacco containing brands and therefore essentially it works as surrogate advertising," says Dr Gupta. "Research has shown people, especially children, associate a name or even a slogan with the original product. For instance, not only does any advertisement of Manikchand represent gutka, any mention of 'Oonche log, oonchi pasand' in any context brings gutka to their mind."
ITC has launched greeting cards with the same logo, design and colour as one of its popular cigarette brands. The government has asked the company to withdraw these cards from the market. "As all the greeting cards have the logo printed both on the cards as well as on its cover, it amounts to indirect advertisement of the cigarette brand which is a violation of the law," says the notice to ITC.
Brand stretching, diversification, and aggressive promotion of other products that bear the same brand name or logo as a popular tobacco product is a strategy that the liquor industry has been resorting to so far. A major reason for diversification could be to protect tobacco companies against legal action and criticism that the industry is facing globally. "Diversification allows movement of finances between companies, possibly making funds inaccessible in the event of a successful lawsuit against the industry," points out the health ministry report. "The diversification of tobacco companies immediately magnifies the business and community influence, expanding their lobby base in the event of legislation or other external threat."
Gutka manufacturers have also launched mouth fresheners containing areca nut, catechu and sugar. "Deficit in sales of tobacco products, if any, due to the ad ban is being compensated by areca nut products such as paan masala and sweet supari. Some of them may contain areca nut treated with tobacco water and certain other addicting chemicals which are carcinogenic," says Dr Manoj Sharma, associate professor in radio therapy, Maulana Azad Medical College, Delhi. "We don't have independent laboratories where such products can be tested to see if they are really tobacco-free or contain no known carcinogens."
Meanwhile, ITC is trying to shrug off its image as a tobacco company with diversification into new product categories like Agarbathis (incense sticks) in association with spiritual groups like the Art of Living and Aurobindo Ashram, Pondicherry, as well initiatives like e-chaupal. This is helping it kept its flagship brand floating in the market. Its cigarette sales are up and so are profits, despite the ban on advertising. In December 2004, the company reported that it has "registered a robust growth on the back of growth in cigarette sales" in the last quarter of 2004. Its total revenue in 2003-04 was over Rs 127.5 million, of which Rs 92.3 million came from cigarettes alone. Of the total profit of Rs 22.1 million, cigarettes accounted for as much as Rs 20.3 million.
The launching of mobile smoking vans, promoting hookah cafes, free distribution of gutka sachets and cigarette packs in restaurants, and the publication of private newsletters on tobacco are other methods being used by the industry to overcome the ad ban. The industry is now engaged in lobbying to weaken rules relating to pictorial health warnings to be printed on tobacco products. These rules are currently being framed and may come into force in 2005.
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