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As Roger Federer sets out to win his fourth consecutive Swiss Indoors title in Basel, a debate has reignited over tobacco sponsorship in sport.
The tournament, which has been sponsored by Swiss luxury brand Davidoff since 1994 and starts on Monday, is one of the last in the world to be sponsored by a tobacco company – and health campaigners aren't happy.
"First of all, linking sport and tobacco is utterly perverse," Jürg Hurter, president of Pro Aere, Switzerland's largest organisation against passive smoking, told swissinfo.ch.
"Second, the tobacco industry – who aren't idiots – try to get around tobacco promotion laws by sponsoring sporting events or by branding various products."
Pascal Diethelm, director of the anti-smoking group OxyRomandie, said last year "players drowned in an advertising soup for Davidoff".
"At the end of the match the young ball boys and ball girls received a medal from Roger Federer in recognition of having served the cause of Davidoff so well. Each medal bore the Davidoff logo in order to make sure that these potential smokers would know which cigarette brand to choose," he said. . . .
"This discussion is like the Loch Ness monster – it comes back every year!" Jürg Vogel, a member of the Swiss Indoors organising committee, told swissinfo.ch.
"Davidoff sells not only tobacco but also perfumes and other accessories. I think you have to see the whole picture.
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The CR Reporting and Communications Summit (http://www.ethicalcorp.com/reporting) is the largest gathering in Europe on this topic. For two days in late November, many of the world's biggest companies will gather in London to debate and discuss the future of corporate responsibility reporting.
The Marriott hotel in Swiss Cottage will play host to 18 individual workshops, where over 30 of Europe's leading companies will present their own CR/sustainability reporting and communications strategies.
Julia King, Vice-President of CR at GlaxosmithKline will demonstrate how the pharmaceutical giant embeds sustainability reporting throughout the company's many offices in the second plenary session of the first day.
As global excise taxes on tobacco products continue to rise, the cigarette producers have their work cut out for them in protecting profits in spite of declining volume. Smaller producers such as Vector Group (NYSE: VGR) could be particularly at risk as consumers decide how much they're willing to pay for a cigarette break.
Domestically, Altria hasn't fared much better, with declining sales and volume owing in part to rising excise taxes, while Reynolds American (NYSE: RAI) also reported an 11% volume drop. On the other hand, Lorillard (NYSE: LO) served up a better-than-average 6.1% volume decrease even as it showed a 2.6% increase in operating income. British American Tobacco holds a 42% stake in Reynolds American.
While the tobacco market isn't growing in the U.S. now, consumers here aren't completely scared off by increased excise taxes. Similarly, global tax increases are just beginning to unfold. And while those taxes are not likely to kill the industry, global consumers are increasingly turning to gray- or black-market smokes as a result of increased excise taxes, leaving growth prospects for premium products like Marlboro in some jeopardy.
British American Tobacco, maker of Lucky Strike and Kent cigarettes, said Wednesday that sales strengthened in the first nine months of the year thanks to a string of acquisitions.
Sales volumes climbed two percent to 533 billion cigarettes in the nine months to the September, compared with the same period of 2008, BAT said in a trading update.
BAT became the market leader in Denmark and Norway after buying Skandinavisk Tobakskompagni's cigarette businesses for 2.06 billion pounds (3.1 billion dollars) in 2008. That was followed by the acquisition of Turkish group Tekel.
"Group revenue for the nine months grew strongly, driven by the continued good pricing momentum and volume growth from the acquisitions made in the middle of last year," BAT said in a statement.
It added that sales were also boosted by the more recent acquisition of an 85-percent stake in Indonesian group Bentoel in June.
British American Tobacco PLC (BATS.LN) said Wednesday its revenue growth remained strong in the first nine months of the year, despite a further softening in volumes in the third quarter, as smokers struggle with a tough global economy and rising unemployment.
The tobacco group said revenue grew strongly in the nine months to Sept. 30, driven by good pricing momentum, the contribution from acquisitions in Denmark, Turkey and Indonesia as well as favorable exchange rate movements. No specific revenue figures were released.
While volume rose 2% to 533 billion cigarettes in the nine-month period, this was wholly a result of acquisitions. Stripping out these acquisitions, volumes fell 3% in the nine months, compared with a 2% decline in the fist six months of the year.
"Volumes are undoubtedly softening," said the group's director of corporate and regulatory affairs Michael Prideaux, "but it probably look worse than it is."
He said the volume fall was largely a result of BAT's decision not to support low-margin brands bought last year as part of its Tekel and ST acquisitions in Turkey and Denmark.
British American Tobacco (BATS.L), the world's second-biggest cigarette maker, posted a 3 percent dip in underlying nine-month sales volumes on Wednesday but said price rises led to "strong revenue growth."
The maker of Kent, Dunhill, Lucky Strike and Pall Mall cigarettes said third-quarter volumes fell 4 percent, similar to larger rival Philip Morris (PM.N), slightly worse than analysts had forecast, as global unemployment headed higher and as it shed low-margin cheaper cigarette business.
London-based BAT said trading conditions had deteriorated especially in Japan, Russia, Brazil, Italy and South Africa.
"Our consumers are clearly finding the current economic conditions difficult, as unemployment continues to rise," said Chief Executive Paul Adams in a third-quarter statement.
"This has led to a softening of our volumes, although I am encouraged by the growth in our global drive brands and the strong growth in revenue," said Adams, adding volumes of its top four brands grew 4 percent in the nine-month period.
British American Tobacco Plc, Europe’s largest cigarette maker, said shipments declined for the first time in almost two years during the third quarter as markets deteriorated from Brazil to Japan and South Africa.
The quantity of cigarettes sold in the three months ended Sept. 30 fell 2.6 percent to 185 billion, the London-based company said today on its Web site. Nine-month shipments rose 2 percent to 533 billion, weakening from 5 percent growth in the first half and 7 percent in the opening quarter of the year.
BAT Chief Executive Officer Paul Adams said consumers are finding economic conditions “difficult” as unemployment rises. Smokers are switching to cheaper brands and cigarette smuggling is increasing in places such as Germany and eastern Europe as the recession leads consumers to tighten their purse strings.
“This statement had a more bearish tone than previous ones,”
Cigarette maker PT BAT Indonesia (BATI.JK) said Tuesday it plans to merge with sister company PT Bentoel Internasional Investama (RMBA.JK) in order to create a stronger entity.
"The combined market share of the two companies is expected to be around 8%," BAT Indonesia, a unit of British American Tobacco PLC (BTI), said in a joint statement with Bentoel.
It said each BAT Indonesia share will be exchanged for 7.68 Bentoel shares.
The merger proposal follows the 99.74% acquisition of Bentoel's shares in July by British American Tobacco.
An anti-tobacco lobby group says revelations that Imperial Tobacco Canada attempted to destroy its own damning studies will put pressure on the firm to settle lawsuits by several provinces.
"What can they say? That our studies are wrong? They have no real answer," said Michael Perley, executive director of the Ontario Campaign for Action on Tobacco.
On Wednesday, the Canadian Medical Association Journal published online a review that examined 60 cigarette studies thought to have been destroyed by the Montreal-based firm.
The internal studies, done from 1967 to 1984, were destroyed in 1992 on orders from head office at British American Tobacco in the United Kingdom to avoid "exposing the company to liability or embarrassment," the authors of the review say.
But other copies kept in a U.K. depository were later discovered. . . .
The 60 studies were among 70 million pages that cigarette firms were forced to disclose for a landmark anti-tobacco trial in Minnesota in 1998.
Perley could not say if the 60 studies were ever made public and presented to the jury.
"That's part of the reason this is such a dramatic discovery. Researchers could examine them and put them in some kind of context," said Perley. "The problem is making sense of them and creating a pattern of corporate behaviour."
Researchers have uncovered copies of sensitive internal documents destroyed by a Canadian tobacco company that could boost efforts by provincial governments suing the industry over health costs linked to smoking.
The documents destroyed by Imperial Tobacco Canada reveal the firm had scientific data decades ago showing that cigarettes were addictive and caused cancer.
"This evidence suggests that the industry wasn't sharing absolutely critical findings about addiction and the health hazards," said David Hammond, a professor in the University of Waterloo's department of health studies. "There's real potential that if they had done so, we would have had laws that saved lives implemented much sooner."
Prof. Hammond is the lead author of a review of 60 documents that was published yesterday by the Canadian Medical Association Journal. British American Tobacco, the principal shareholder of Imperial Tobacco Canada, ordered Imperial to destroy its copies of the documents in 1992. But other copies had remained in the company's UK headquarters and were included in millions of pages of information released by the tobacco industry as part of court settlements since 1998. That's where Prof. Hammond and his co-authors discovered them.
The records will likely come into play in lawsuits by three Canadian provinces . . .
Most of the records are reports of original scientific studies conducted between 1967 and 1984 by British American Tobacco. Some studies examined the effects of second-hand smoke on rats and found it was dangerous. Other research cast doubt on the comparative benefits of low-tar cigarettes, finding that smokers compensated by inhaling more intensely.
"The studies are notable both for the wide range of research designs used to examine the health effects of smoking and for the consistency of the findings," the CMAJ review says.
Documents destroyed by Imperial Tobacco Canada contained scientific proof that cigarette smoke was potentially deadly, and could be used as evidence as provinces fight legal battles with big tobacco, according to a study published in Canada's top medical journal.
The Canadian Medical Association Journal, in the first published account of a Canadian tobacco company destroying documents, reviewed 60 scientific reports that Imperial Tobacco tried to conceal from the public.
The authors found evidence that could have had important implications, dating back as far as the 1960s, for government regulation of tobacco and the future health of Canadians.
Imperial Tobacco Canada destroyed documents related to the dangers of smoking. (Canadian Press)Imperial Tobacco Canada destroyed up to 60 early studies that linked cigarettes to addiction and carcinogens, according to a review published Wednesday in the online Canadian Medical Association Journal.
The studies were later uncovered in British American Tobacco files, which began to be made available through disclosure during a U.S. trial in 1998, Dr. David Hammond of the University of Waterloo said in an interview.
Hammond said he and his team undertook the review because they knew the studies existed and involved high-quality research into cigarette design and the health effects of smoking.
Imperial Tobacco Canada destroyed seven million pages of research which included decades worth of studies that indicated the devastating effects of smoking, a new medical journal article alleges.
The University of Waterloo researchers examined 60 scientific studies conducted between 1967 and 1984, and published their findings in the Canadian Medical Association Journal.
They said one of the studies showed tobacco company researchers exposing hamsters to cigarette smoke, and concluding that they developed cancerous lesions as a result.
They also said the studies demonstrated how second-hand smoke was worse than first-hand smoke.
The researchers said the documents were destroyed in Canada in 1992 at the request of Imperial's British head office, but copies remained stored at British American Tobacco headquarters in the United Kingdom. . . .
"Originally we found a document from Imperial Tobacco to British American Tobacco, their parent company, saying, 'We've destroyed the 60 sensitive documents as you requested,"' Hammond said, adding there was a list of internal codes indicating a number for each destroyed document.
Copies of the documents were then located in the British American Tobacco files in England.
The destroyed documents reveal a vast body of scientific evidence on the health effects of smoking. Forty of the 60 documents pertain to carcinogenicity and “biological activity” of cigarettes. . . .
All 60 documents ordered destroyed were reports of scientific work, performed either by British American Tobacco or contractors hired by British American Tobacco. The earliest report dated from 1967 and the most recent was produced in 1984. Of the 60 reports, 11 were reviews of internal research or methods development, 2 were statistical re-analyses of previous studies and the remaining 47 documents contained research findings from original studies conducted by British American Tobacco. . . .
Nicotine and addiction
Six of the destroyed documents depict a sophisticated program of research on nicotine addiction . . . Collectively, these research reports include convincing evidence about the addictive nature of nicotine — a fact that was vehemently challenged at the time in public by British American Tobacco and Imperial Tobacco Canada. . . .
Second-hand smoke
Eleven of the destroyed documents included original research findings on the effects of second-hand smoke.26,27,72–80 Nine of studies were experiments performed on rats to determine the effects of second-hand and mainstream smoke.26,27,73-79 The primary outcome of the tests was the finding that “In all exposed animals there was a consistent smoke-induced change in the larynx …
in 1990, the president of the Canadian Tobacco Manufacturers’ Council submitted a written objection to government proposals for a new health warning on the risks of second-hand smoke, stating that “we do not accept that there is any credible or reliable evidence to establish that environmental tobacco smoke (ETS) constitutes a genuine health hazards to smokers.”82 The destroyed documents indicate that this evidence had already been collected by the industry and was concealed in confidential files. . . .
In 1954, the Canadian Medical Association issued its first public warnings about the risks of smoking, followed in 1963 by the landmark statement in the House of Commons from Canada’s Minister of National Health and Welfare that smoking was harmful to health. Despite these historic proclamations, there remained considerable uncertainty about the extent of the health risks, whether some products were less harmful than others, and what government measures should be taken to reduce the harm from tobacco. During this period, British American Tobacco and Imperial Tobacco Canada collected high-quality scientific evidence that bore directly on these issues and had the potential to hasten effective public health regulation. However, British American Tobacco and Imperial Tobacco concealed this information and argued that there was a lack of evidence to support government measures such as workplace smoking restrictions and mandatory health warnings on packages.81 For example, in 1990, the president of the Canadian Tobacco Manufacturers’ Council submitted a written objection to government proposals for a new health warning on the risks of second-hand smoke, stating that “we do not accept that there is any credible or reliable evidence to establish that environmental tobacco smoke (ETS) constitutes a genuine health hazards to smokers.”82 The destroyed documents indicate that this evidence had already been collected by the industry and was concealed in confidential files.
Efforts to conceal research findings on “low-tar” cigarettes have been particularly damaging to health policy and government regulation. Canadian manufacturers began producing and marketing “lower-tar” cigarettes during the 1960s and 70s as a direct response to growing health concerns among consumers.81 Without the benefit of independent evidence on the potential benefits of “lower-tar” cigarettes, many leading health agencies supported this industry strategy.83 For example, in the 1970s, Health and Welfare officials urged the Canadian manufacturers to reduce tar levels further and to print tar numbers on packages to help guide consumers.81 The destroyed documents indicate that British American Tobacco had collected evidence that cast doubt on the potential health benefits of “low-delivery” products. In vivo studies indicated that human smokers were compensating for “low-tar” cigarettes by smoking them more intensely, while biological testing from Projects Janus and Rio revealed negligible differences in the carcinogenity and mutagenicity of cigarette brands. Without access to this evidence, several decades elapsed before regulators and health agencies reached consensus that “low-tar” products did not reduce risk.81,84 In the meantime, millions of smokers switched to these brands, many under the assumption of reduced harm as an alternative to quitting.84 The legacy of low-tar cigarettes continues today . . .
Had the tobacco industry been forthcoming about the evidence collected about human smoking behaviour and low-tar cigarettes, much of the confusion over these products may have been averted.
Imperial Tobacco’s attempt to destroy the evidence in the 60 documents is consistent with the tobacco industry’s welldocumented efforts to undermine science on the risks of smoking and to engineer doubt in the minds of health professionals and consumers.87 Imperial Tobacco Canada and British American Tobacco publicly denied the importance of the health effects that were clearly shown in the 60 destroyed documents. For example, in 1987 — 9 years after the conclusion of Project Janus, which showed the carcinogenicity of tobacco smoke — the chairman of Imperial Tobacco Canada and the chair of the Canadian Tobacco Manufacturers Council, Jean-Louis Mercier, testified in front of a House of Commons Legislative Committee, stating that “It is not the position of the industry that tobacco causes any disease. … The role, if any, that tobacco or smoking plays in the initiation and the development of these diseases is still very uncertain.”88
Further, in 1996, Martin Broughton, the chief executive of British American Tobacco stated, “We have not concealed, we do not conceal and we will never conceal. … we have no internal research which proves that smoking causes lung cancer or other diseases or, indeed, that smoking is addictive.”89
Finally, the destruction of documents by Imperial Tobacco Canada has direct implications for industry liability and new litigation that is proceeding in Canada. Canadian courts are currently being asked to consider whether the tobacco industry should be liable for the health care costs attributable to smoking.
In the first Canadian trial of its kind, the province of British Columbia has launched health care cost-recovery litigation . . .
Tobacco companies have yet to pay any compensation either to the Canadian government or to their consumers as a result of their actions.
Background: In 1992, British American Tobacco had its Canadian affiliate, Imperial Tobacco Canada, destroy internal research documents that could expose the company to liability or embarrassment. Sixty of these destroyed documents were subsequently uncovered in British American Tobacco's files. . . .
Results: Imperial Tobacco destroyed documents that included evidence from scientific reviews prepared by British American Tobacco's researchers, as well as 47 origin al research studies, 35 of which examined the biological activity and carcinogenicity of tobacco smoke. The documents also describe British American Tobacco research on cigarette modifications and toxic emissions, including the ways in which consumers adapted their smoking behaviour in response to these modifications. The documents also depict a comprehensive research program on the pharmacology of nicotine and the central role of nicotine in smoking behaviour. British American Tobacco scientists noted that "... the present scale of the tobacco industry is largely dependent on the intensity and nature of the pharmacological action of nicotine," and that "... should nicotine become less attractive to smokers, the future of the tobacco industry would become less secure."
Interpretation: The scientific evidence contained in the documents destroyed by Imperial Tobacco demonstrates that British American Tobacco had collected evidence that cigarette smoke was carcinogenic and addictive. The evidence that Imperial Tobacco sought to destroy had important implications for government regulation of tobacco.