A Review of Cigarette Marketing in Canada -- 4th Edition -- Winter 2003

 
$300 million and counting
Tobacco companies spend $10 per Canadian and $1,000 per retailer promoting their brands

The amount that tobacco companies spend on advertising and promotion was, until recently, a secret closely guarded by the companies.  Although the companies have been required to report all promotional expenditures to Health Canada, these amounts reported were not made public.

In June, 2003, a Member of the Canadian House of Commons, Svend Robinson, filed a "Question on the Order Paper" (below) asking for this information to be made public.  This is a parliamentary device which allows legislators to exact answers from government departments.

The results were staggering.  In each of the year 2001 and 2002, the total spent by the companies exceeded $300 million - and that over $77 million was provided to more than 70,000 retailers. 

Given that Parliament has twice passed laws which ban most forms of tobacco advertising, this figure is all the more startling.

Previously, some market research firms (like ACNeilsen) had monitored advertisements in publications, billboards, television and radio advertisements - but they did not track the expenses in retail outlets, bars and other newer promotional vehicles.  The most recently-available ACNeisen report (made public in the last issue of Filtertips) showed roughly $20 million spent on conventional advertising in 2000.

We don't yet know how this sum was distributed among the many companies, nor on which promotional activities (the figure reported included expenditures on packaging).  Hopefully the government will make the information required of tobacco companies in the Tobacco Reporting Regulations (below) available to the public in the near future.

$300 million is more than enough for:
(click to enlarge)
JTI-Macdonald to pay women to bare almost all to promote their cigarettes. BAT/Imperial Tobacco to paint the town - and nightclubs - duMaurier Red (Lotus Nite Club, Toronto)

37th PARLIAMENT, 2nd SESSION
EDITED HANSARD • NUMBER 115
Tuesday, June 10, 2003

Question 222:
Mr. Svend Robinson:

    Have Canadian tobacco manufacturers and importers provided reports to Health Canada under the requirements of the Tobacco Reporting Regulations and, if so, for each reporting period since January 1, 2001: (a) what is the total expenditure for all promotional activities reported under section 16; (b) which sponsored events were reported under section 18; (c) which permanent facilities were reported under section 19; (d) which services were reported under section 21; (e) what is the total payment to retailers and what is the total number of retailers receiving payments reported under section 22; and (f) which non-tobacco products displaying a tobacco brand element were reported under section 24?

Hon. Anne McLellan (Minister of Health, Lib.):

    A number of Canadian tobacco manufacturers and importers have provided reports to Health Canada in accordance with the requirements set out in the tobacco reporting regulations, TRR.

    With respect to (a):

Reporting Period Total expenditure
January 1 - June 30, 2001 $140,156,028.72
July 1 - December 31, 2001 $164,397,314.31
January 1 - June 30, 2002 $171,711,800.61
July 1 - December 31, 2002 $128,855,215.64

    With respect to (b), a previous request under the Access to Information Act (ATIA) for information submitted under section 18 of the Tobacco Reporting Regulations was received in 2001. At the time, our decision to release this information was challenged before the Federal Court by the tobacco industry. The request was withdrawn by the requester and the determination of whether the information could be released under the ATIA was never resolved by the court. The information is not currently available for disclosure in this manner and the use of a statutory system such as the Access to Information Act (ATIA) is the most appropriate avenue for a request of this third party information.

    With respect to (c), none. This section of Tobacco Reporting Regulations only comes into effect after October 1, 2003

    With respect to (d), none.

    With respect to (e):

Reporting Period Number of Retailers Total amount paid to retailers
January 1 - June 30, 2001 60,551 $34,115,932.88
July 1 - December 31, 2001 73,218 $40,353,758.40
January 1 - June 30, 2002 63,163 $32,683,025.45
July 1 - December 31, 2002 69,954 $44,540,242.51

    Note: The number of retailers do not represent individual retailers as the different tobacco companies may have made payments to the same retailer and retailers would therefore be included more than once in totals.

    With respect to (f), the following non-tobacco products that displayed a tobacco brand element were disclosed under section 24 of TRR: golf balls, pocket knife, pen, blanket, banner, display booth, bag, ballot box, clock, port glass, pipe, and filter tip tubes.
Tobacco Reporting Regulations

Part 5
Promotional Activities

Promotional activities
16. (1) Every manufacturer of a consumer tobacco product shall report

  1. subject to subsection 18(2), quarterly and at the following times, the dates of release of any promotional activity in respect of that consumer tobacco product and the applicable descriptive information set out in sections 17 to 24:
    1. for the period beginning on January 1 and ending on March 31 of a year, on or before April 30 of that year;
    2. for the period beginning on April 1 and ending on June 30 of a year, on or before July 31 of that year;
    3. for the period beginning on July 1 and ending on September 30 of a year, on or before October 31 of that year;
    4. for the period beginning on October 1 and ending on December 31 of a year, on or before January 31 of the following year.
  2. semi-annually, the information described in subsection (2) in respect of each promotional activity undertaken by the manufacturer or for the manufacturer for consideration in respect of that consumer tobacco product
    1. for the period beginning on January 1 and ending on June 30 of a year, on or before July 31 of that year, and
    2. for the period beginning on July 1 and ending on December 31 of a year, on or before January 31 of the following year.

Content of report
(2) In addition to the information to be reported under sections 17 to 24, the semi-annual report mentioned in paragraph (1)(b) shall set out, for each province and specifying national totals,

  1. by brand family and, where applicable, by brand
    1. the total semi-annual costs of each of the promotional activities described in sections 17 to 24, and
    2. by type of consumer tobacco product, the total semi-annual costs of all promotional activities; and
  2. in respect of all of the manufacturer's promotional activities for all of their consumer tobacco products, the total semi-annual costs of those promotional activities.

Advertisements in Publications

Information about advertisements
17. (1) If a consumer tobacco product is advertised in a publication, the manufacturer of that product shall report the following information:

  1. every province in which the publication was distributed;
  2. the dates the advertisement was published; and
  3. the total cost of the advertisement.

Copy of advertisement
(2) The manufacturer shall attach to the report a copy or a reasonable facsimile with a detailed description of any advertisement reported under subsection (1).

Sponsorship

Information to be provided
18. (1) If a consumer tobacco product-related brand element is displayed, before October 1, 2003, in a promotion that is used in the sponsorship of a person, entity, event, activity or permanent facility, the manufacturer of the consumer tobacco product shall report the following information:

  1. if the sponsorship is in respect of
    1. a person or an entity, the name of the person or entity and a description of any items bearing the consumer tobacco - product related brand element of the manufacturer,
    2. an event or activity, a description of the event or activity and its date, or
    3. a permanent facility, the name of the facility, a description of it and its street address;
  2. whether the consumer tobacco product-related brand element was displayed between January 25, 1996 and April 25, 1997 in promotional material that was used in the sponsorship of an event or activity that took place in Canada and, if so, the date of the event or activity;
  3. a copy or reasonable facsimile with a detailed description of any promotional material containing a brand element of the manufacturer, including, with respect to the promotional material,
    1. the colours used in it,
    2. its size, and
    3. a copy of any text appearing in it;
  4. the expected duration of the display of any promotional material used in the sponsorship;
  5. if promotional material used in the sponsorship appears in a publication, the information required by section 17; and
  6. the total cost of the sponsorship.

When required
(2) The material required in paragraph (1)(c) must be provided no later than the date of its release.

Permanent facilities

19. If a consumer tobacco product-related brand element, or the name of a manufacturer, is displayed, on or after October 1, 2003, on a permanent facility where the brand element or name is not thereby associated with a sport or cultural event or activity, the manufacturer of the consumer tobacco product shall report the following information:

  1. the name, the street address and a description of the facility;
  2. a description of the brand element or name displayed, including
    1. the colours used in it, and
    2. its size;
  3. the expected duration of the display; and
  4. the total cost of the display.

Packaging

Information to be provided
20. Every manufacturer of a consumer tobacco product shall report, by brand and each type of package, carton or kit containing the brand, the cost of manufacturing the packaging of the consumer tobacco product.

Services

Information to be provided
21. If a service uses a consumer tobacco product-related brand element of a manufacturer for consideration by the manufacturer, the manufacturer shall report the following information:

  1. a detailed description of the service;
  2. in respect of the service, the expected duration of the use of the consumer tobacco product-related brand element;
  3. the province in which the consumer tobacco product-related brand element is used by the service; and
  4. the consideration given by the manufacturer for the promotion of the consumer tobacco product.

Display at Retail

Report
22. Every manufacturer of a consumer tobacco product that uses a sign to promote the product, specifies the manner of displaying the product at retail or pays a fee for the display of the product shall report the following information in respect of the display at retail of the product:

  1. if a sign or display is used,
    1. a detailed description of the sign or display,
    2. a photo or reasonable facsimile of the sign or display, and
    3. the cost of providing the display or using the sign, including the cost of their production and distribution;
  2. the total amount paid to retailers to display the product or sign, by province;
  3. the number of retailers, by province and by each of the following categories, that have received a fee to display the product or sign:
    1. a convenience store, including
      1. an independently owned convenience store, and
      2. any other convenience store,
    2. a grocery store,
    3. a pharmacy,
    4. a restaurant,
    5. a tavern, bar or beverage room, and
    6. any other establishment not described in subparagraphs
    7. (i) to (v); and
  4. in the case of a sign,
    1. the number of establishments, including their names and addresses, that do not permit entry to young persons and that displayed the sign; and
    2. the period during which the sign was specified to be displayed.

Accessories

Information to be provided
23. If an accessory that displays a consumer tobacco product-related brand element is promoted, the manufacturer of that consumer tobacco product shall report the following information about the accessory:

  1. photograph or reasonable facsimile of it;
  2. a detailed description of it;
  3. the number sold, by province; and
  4. its cost
    1. of development,
    2. of manufacture,
    3. of distribution, and
    4. of promotion.

Other Products

Information to be provided
24. If a non-tobacco product, other than an accessory that displays a consumer tobacco product-related brand element, displays a consumer tobacco product-related brand element of a manufacturer, the manufacturer shall report the following information in respect of the non-tobacco product:

  1. a photograph or reasonable facsimile of it;
  2. a detailed description of it;
  3. the number sold, by province; and
  4. its cost

 

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