Leader - BAT invests to stay out of the headlines

Tobacco companies have an undeniably dark reputation. And somehow London-based BAT has managed to outperform the market in this respect.

The maker of Lucky Strike has been in the news again this week. First it emerged that the company has been operating a secret factory in North Korea for the past four years; then its deputy chairman Kenneth Clarke lost his bid to become Conservative Party leader; and now PRWeek can reveal that BAT is preparing a global public affairs offensive (News, page 1).

Understandably, BAT tends to keep a low media profile in the UK, but the past decade has seen a steady stream of revelations about its controversial marketing practices. We have heard about 'cigarette girls' handing out BAT brands in trendy bars across Europe; seemingly independent youth websites encouraging youngsters to visit bars promoting its brands; and subliminal branding in shops.

To a certain extent the firm has been forced into such initiatives as the EU and World Health Organisation have gradually closed off the marketing options for tobacco companies. The powerful channel of Formula One finally 'goes dark' at the end of the 2006 season.

But reports of BAT's tactics further damage the organisation's image.

The Government has long threatened action against BAT - addressing allegations, which BAT denies, of tobacco smuggling in developing markets - without actually doing very much. This is probably due to adept lobbying by Ken Clarke and his colleagues.

So should we read BAT's public affairs review as an indication that the company wants a brighter image? Probably not. More likely it is seeking damage limitation on state anti-smoking initiatives around the globe.

And preparing the ground for acquisitions that will improve margins, and secure distribution.

BAT knows we are unlikely to warm to its business, but believes we can be encouraged to leave it alone.

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