FOCUS CRISIS: TRAINING AND MANAGEMENT - Up in smoke. Tobacco companies’ traditional method of crisis management has been to take cover and say nothing. But this approach no longer works in today’s anti-smoking climate. Stephanie France rep

Since the link between smoking and cancer was discovered almost half a century ago, the crisis management policy of most tobacco companies has been to build a fortress around themselves and take cover.

Since the link between smoking and cancer was discovered almost

half a century ago, the crisis management policy of most tobacco

companies has been to build a fortress around themselves and take

cover.



With a UK ban on tobacco advertising and sponsorship imminent, the more

astute tobacco companies are rethinking their approach to marketing,

attempting to substitute conflict for consensus with opinion

formers.



The ban on advertising and sponsorship is not the only crisis facing the

tobacco industry. An increasingly significant issue is litigation

against cigarette manufacturers by individuals and groups of individuals

who say that tobacco companies are to blame for serious damage to their

health from smoking.



So far this has been confined to the US. In Florida, a case is currently

underway which is seen as a landmark by the anti-smoking lobby, as it

could set a precedent for how much tobacco companies should be

punished.



The Engel case involves a group of smokers against Big Tobacco - the

generic moniker that has been attached to big manufacturers such as

Philip Morris and RJ Reynolds. The Florida jury has already found Big

Tobacco guilty of conspiring to make an addictive product that causes

cancer and heart disease, and awarded the group pounds 12.7 million

compensation and is now to decide on the level of punitive payments.



Three similar individual cases have also hit the headlines recently for

going against the tobacco industry - all three are now on appeal.

Speaking to the Times this month, Richard Daynard, chairman of the

Tobacco Products Liability Group, said the key to the cases was the

recent discovery of documents showing that the tobacco industry knew of

the risks of smoking years ago but covered them up. ’In every case where

they have been sued, the plaintiff has won,’ he said.



Whether or not the industry manages to overturn all these cases, the

fact that they are starting to come to court in greater numbers - since

the first case was launched in 1954, only 50 cases have come to court -

is bad news in itself for the manufacturers. It also makes life even

tougher for those PR agencies who work for the industry.



Tobacco is not the only industry to have a bad press, but its apparent

ambivalence towards public opinion marks it out. For decades the tobacco

industry has lived with crisis and rather than addressing it head on,

the industry has preferred to pump millions into advertising,

sponsorship deals and merchandising.



Philip Morris’ senior vice-president of corporate affairs, Steven

Parrish, recently admitted that his company’s PR philosophy had been to

’stay out of the papers’. Speaking in January at the Conference Board’s

Corporate Image conference in New York, he said Philip Morris’ policy

had been to ’hire the best lobbyists in the world to deal with

government, but let public opinion take care of itself’.



Nigel Anderson, chairman of the Chancellor Tobacco Company and former

joint managing director of Gallaher Tobacco, says it is difficult for

tobacco companies to take a proactive PR stance over the health issues

surrounding smoking. ’The industry tends to be proactive only on such

issues as taxation, government restrictions, underage smoking and

smuggling.’



The Chancellor Tobacco Company, which launched Treasurer cigarettes in

April, takes a provocative approach to its own PR: the company name and

product are digs at the Treasury. Anderson himself is no stranger to

controversy - he was a consultant to the Enlightened Tobacco Company,

makers of Death cigarettes.



’Chancellor is a very small company with no history,’ explains

Anderson.



’We can’t be accused of encouraging people to take up smoking. In fact

the reverse is true since our customers are by definition committed

smokers with money to burn.’



But for other industry players, the past failure to deal with the issue

of health has created a climate of mistrust between themselves and

opinion formers, which exists to this day. Representatives from

Gallaher, RJ Reynolds and British American Tobacco were invited to

comment on their PR challenges, but all three choose not to

participate.



Relations between the tobacco industry and the media on the other side

of the Atlantic reached a new low when Business Week called Philip

Morris ’America’s most reviled company’ in its November 1999 issue.

However, Philip Morris is doing more than most to address its corporate

image, recently launching a multi-million dollar PR and advertising

campaign.



David Davies, vice-president, corporate affairs, Philip Morris Europe,

says: ’In the past, we didn’t speak up enough for ourselves and our

critics were able to define us in ways which were inaccurate. As a

result, people don’t know what we stand for.’



Davies admits that the ’contentiousness and conflict’ inherent in many

of the issues surrounding the industry precluded any ’reasonable debate’

with opinion formers in the past. But he says that over the last year,

Philip Morris has been making a conscious decision to address the

concerns it claims to share with the public and government.



For example, the company has been working in partnership with the

Portuguese government and its public health authorities on print and

cinema campaigns to persuade young people not to take up smoking.



’The challenge for us is to get back in step and address the issues,’

says Davies. ’We support the right of adults who are informed of the

risks to smoke, but we also share the view that there must be a

regulatory framework, so that people are informed of the risks. These

are not new commitments.



The difference is that in the past we didn’t seek to make them

public.’



Le Fevre Communications worked with the Enlightened Tobacco Company on

Death cigarettes and is now working with the Chancellor Tobacco Company

on Treasurer cigarettes. Agency chairwoman Joy Le Fevre believes that

honesty should be paramount in all of the tobacco industry’s dealings

with the media.



Media trainers believe it is essential that tobacco companies take a

more proactive stance to their PR. Sarah King, teaching fellow at crisis

management specialist the Henshall Centre in London adds that any new

strategy needs ’the full management buy-in’ if the issue of health and

smoking is to be tackled head on.



’Once the communications strategy has been given the full backing of the

company, a clear respect for the anti-smoking lobby must form the

foundation of the approach.’



King believes that given careful planning a real opportunity exists for

tobacco companies to take a lead in ethical issues, such as employment

and Third World Trade. ’While these will not cancel out the health

issue, they will help establish the foundation for a more positive image

in the eyes of stakeholders,’ she says.



The Tobacco Manufacturers Association (TMA) is the trade body which

represents manufacturers in the UK. Rosemary Brook, chairman of

consultancy Brook Wilkinson, advises the TMA on its communications and

media strategy, as well as providing media relations support.



Brook claims the TMA has always taken a proactive PR stance on behalf of

its members, but has met with a wall of resistance from the media.



’PR practitioners have to break through the resistance of many

publications to carry stories from the tobacco industry which might be

deemed to be ’positive’ in a generally anti-smoking climate,’ she

says.



Edelman group director Nick Archer works for the Tobacco Alliance which

seeks representation for the 26,000 independent tobacco retailers in the

UK. His work includes making presentations to the House of Commons

Treasury Select Committee and liaising with regional media when a member

shop is closed as a indirect result of smuggling.



Archer agrees that it is hard for PR practitioners to pitch a tobacco

story to journalists. Brook and Archer are keen to put across to the

media many of the issues currently facing the tobacco industry. These

include the impact of the UK tax differential on tobacco (which the

industry claims indirectly encourages smuggling), the impending ban on

advertising and sponsorship, and the challenges to the legal basis of

European directives on banning tobacco advertising.



In July 1998, the EU directive to ban tobacco advertising was adopted by

the member states, with timing left to individual members. In September

1998, the principal UK tobacco companies challenged the validity of the

EU directive and a response from the European Court of Justice is

expected later this year. Meanwhile, the Government signalled its

intention to press ahead with a ban in the UK. This was due to be

enforced in December, but is currently the subject of a legal challenge

by the tobacco industry.



In the arena of sponsorship, Formula One has until 2006 to find

alternatives sponsors and all other sports have until 2003.



With a ban on advertising and sponsorship looming large, the importance

of PR as a marketing tool is increasingly important. However, Carl

Courtney, managing director of ICAS Public Relations, says his client

Imperial Tobacco has never underestimated the importance of PR.



’Imperial Tobacco has always thought seriously about its corporate image

and PR is an essential part of its communications strategy,’ he

says.



Last year, ICAS launched Richmond King Size and Richmond Lights for

Imperial Tobacco. The low price cigarettes are its first new product in

13 years.



The launch was a success because the tobacco company and its PR team had

taken the time to build up good working relations with the media.



Tobacco companies which choose not to open up honest lines of

communication with the media cannot expect journalists to then cover the

stories they wish to promote. And with the ban on tobacco advertising

just around the corner, now would be a good time for all tobacco

companies to put their communications houses in order.





ASH CONTINUES CAMPAIGNING TO KEEP CUSTOMERS INFORMED



UK pressure group ASH has been campaigning for almost 30 years against

smoking. For many of its campaigns, ASH teams up with cancer charities

and local health authorities.



Last year, the organisation publicised a joint report between the

Imperial Cancer Research Fund, the US State of Massachusetts and ASH.

The report claims tobacco companies have been adding chemicals to

cigarettes to increase the addictive nature of nicotine, keeping smokers

hooked.



Research manager, Amanda Sandford, says: ’In the UK, over 600 additives

are permitted in cigarettes, including ammonia and flavourings which

make the brand distinctive. While these additives may be harmless in

themselves, when they are burnt, they could be potentially harmful.’ For

example, cocoa is known to dilate the airwaves when smoked, making

inhalation easier.



Sandford says the campaign aimed to raise awareness of additives amongst

the public and encourage the European Commission to include the issue of

additives in its new directive on tobacco product regulation.



’Lobbying at a European level tends to be done jointly with colleagues

in Europe so that we present a united message,’ says Sandford. ’This

includes meetings with Commission staff and MEPs and producing

briefings.’



In the UK, a press conference was held to launch the additives campaign,

at which an expert in the field was brought over from the US to address

journalists.



The Department of Health endorsed the report, and health secretary Alan

Milburn announced he would publish the list of additives on the

department’s web site while giving evidence to the Health Select

Committee during its investigation into the tobacco industry.



In November, the EC published an outline of the new directive on tobacco

product regulation. The proposal states: ’Tobacco manufacturers and

importers should disclose all tobacco ingredients to member states’

authorities by brand name. This shall be done annually, starting not

later than 31 December 2003.’



ASH is now looking to 29 June, when the new directive is scheduled to be

considered by the EU’s Health Council. ASH is also working on a lobbying

campaign for the implementation of the Health and Safety Executive’s

Approved Code of Practice which deals with passive smoking.



’This will give guidance on dealing with passive smoking in the

workplace and also drum up support for the Public Places Charter, which

is a similar code designed to minimise passive smoking in the

hospitality industry.’





CHANCELLOR TAKES ELITIST STANCE WITH TREASURER LAUNCH



When a tobacco company launches a product it faces an uphill struggle.

Not only is the marketplace exceptionally competitive, but the media is

reluctant to cover ’positive’ cigarette stories. The industry is almost

in crisis management mode every time it launches a product.



For the April launch of Treasurer cigarettes, The Chancellor Tobacco

Company and its PR agency Le Fevre Communications adopted a provocative

PR strategy in an attempt to break through this wall of resistance.



The product was helped by its distinct USP - Treasurer retails at pounds

17 for a tin of 20 cigarettes. The cigarettes, which are being targeted

at cigarette connoisseurs, are silver tipped and made from pure Virginia

tobacco.



The UK launch was entirely PR-led. ’Advertising would have been a waste

of time, since the product is on limited sale. We also thought the story

was strong enough to run on its own,’ says Nigel Anderson, chairman of

the Chancellor Tobacco Company, In all press communications, the story

was released with the strapline: ’Treasurer cigarettes seriously damage

your wealth.’ Joy Le Fevre, founder and chairwoman of Le Fevre

Communications says: ’We took a deliberately elitist stance and sold

snobbery. We have openly admitted that a tin costs an incredible amount

and buyers will be very wealthy. Lowest price and best value are common

PR themes and we turned these messages on their heads with

Treasurer.’



The story was pitched at consumer and business titles. With the tax

rises on cigarettes in April’s budget still fresh in people’s minds, the

launch generated a good range of newspaper coverage and radio coverage.

This included the Times and the Evening Standard, plus extensive radio

coverage.



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