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Item 2 is our final evidence-taking session at stage 1 of the Tobacco Advertising and Promotion (Scotland) Bill. Mr Tim Lord and Mr Chris Ogden of the Tobacco Manufacturers Association are here to give evidence.
Thank you and good morning. I have been the chief executive of the Tobacco Manufacturers Association since January 2002, when I succeeded David Swan. We thank the committee for the opportunity to give evidence.
Thank you.
On that theme, I refer to paragraph 52 of the TMA's written submission, which says:
Yes. We feel that the bill should be referred to the EC. It is interesting that the Scottish Parliament and the Westminster Parliament did not agree with that view, but that the Dutch and the Danes, in similar legislative reviews, felt that it was appropriate to refer the matter to the EC. We asked for clarification in a letter to the EC. A key reason for doing so was that, if a bill is enacted and subsequently questioned by the European Parliament, that could cause much confusion for our members.
I presume that you would be happy to give us a copy of it.
With pleasure.
I will leave it at that, as it is obvious that we will have to return to the matter.
We have read many of the statements from previous witnesses. For us, the overwhelming conclusion is that studies around the world and reviews of the relevant literature provide no convincing evidence that a ban on tobacco advertising will result in a reduction in tobacco consumption. For every study that states that there might be a reduction in consumption, another states that that there will be no such reduction. On framing legislation in that context, we do not believe that there is convincing and irrefutable evidence that an advertising ban will impact on consumption.
Given the irrefutable evidence that tobacco is linked with heart disease and lung cancer, what effect will the bill have on public health? What action should be taken on smoking to enhance public health in Scotland?
We see no reason why the bill would result in a reduction in tobacco consumption in Scotland. To bring about a reduction in smoking, in the consumption of cigarettes and in the number of children who smoke, the health ministries should sit down with the industry. The voluntary agreement that has been in place since the 1970s has been modified 11 times, I think, because we have sat down with ministers to understand their agenda and their objectives. We would be more than happy to sit down with the Scottish Executive health department to discuss whether it would be possible to amend the voluntary agreement in line with the health objectives.
It is indisputable that there is a difference of opinion on the effect of advertising. The issue is made more complicated by the fact that different countries have introduced different types and levels of bans, which are set in different contexts. You are correct to say that there are two sides to the debate but, despite all that, the Smee report to which you referred states:
It is difficult to answer a hypothetical question. We have examined a lot of the evidence from around the globe for banning tobacco advertising, but we have not found convincing evidence. You have quoted Smee's qualitative comments, which were made after Smee was unable to produce an estimate of what the reduction in consumption would be.
Mr Lord, I wish to tackle you on the idea that advertising does not affect the consumption of tobacco because it is aimed exclusively at existing smokers. Indeed, you say that under the voluntary agreements any tobacco advertising that
Yes.
In Scotland during that 25-year period, about 13,000 smokers died every year. A much larger number of smokers died in Britain every year during that period. Does that 37 per cent drop reflect the number of smokers who died from cancer?
It represents the absolute reduction in cigarettes smoked. Does that answer your question?
No. The point that I am trying to get at is that, if non-smokers are not affected by advertising, consumption is reducing because smokers are dying from cancer. Do you accept that?
That is not what I mean. I mean simply that the number of cigarettes smoked throughout the UK reduced by 37 per cent, which reflected a reduction in the incidence of smoking among men and women and a reduction in the number of cigarettes smoked.
You concede that, during the period from 1971 to 1996, millions—or thousands, anyway—of new smokers took up smoking.
I suspect that that is true.
Your argument is that they were totally unaffected by advertising.
It is not I who says that; it is said by people who are expert in the area and who talk to children, such as Goddard did in the 1990s, and by the Nursing Standard report, which reviewed the literature. It is said by people who have attempted to understand why children smoke. With respect, that is what we need to examine. Those people gave reasons why children smoke, which I referred to earlier.
It is difficult to prove that the purpose of advertising is to target particular groups. Let us consider brand stretching. Why do tobacco companies sponsor motor cars and have the names of their products all over the cars? Is it to attract people who are not smoking, particularly young people, who find racing driving exciting?
Would you like me to talk about formula 1?
Whatever. You stretch brands into designer clothes that young people wear. You stretch them into exciting sports that young people watch. You are targeting young people. You are trying to encourage them to smoke.
Let us be absolutely clear: we have a voluntary agreement and we do not target young people. The objective of our advertising is to persuade existing smokers to make an alternative brand decision.
So only smokers watch formula 1 car racing.
Let us talk about formula 1. That is an example of where the voluntary agreement can have effect. We can talk only about the United Kingdom, because the TMA's remit is restricted to the UK. Following discussions on formula 1 with the Department of Health, we have made some changes to the way in which sponsorship is managed in the UK. Cars do not have cigarettes branded on them. Cameras are not supposed to go on to—
But the names of products are branded on the cars.
The brand names?
Yes. People know exactly what those names mean. Just because there is not an image of a packet of fags on the car does not mean that people do not know what Rothmans and Gallaher are.
We have achieved a situation in the UK where formula 1 cars do not carry cigarette brands.
In snooker, everyone knows what Benson and Hedges is; they do not have to be told. Snooker players do not have to have a packet of fags branded on their waistcoats for people to understand what Benson and Hedges is. That is brand stretching. That is attracting people who are not smoking. Your advertising is deliberately designed to attract non-smokers.
If I may, I will chip in, because I have been more directly involved with the operation of the voluntary agreements. It is important for the committee to understand, as I am sure members do, that the term "voluntary" does not mean that we can take it or leave it. The agreement is voluntary only in the sense that we have chosen to submit to a set of regulations that were imposed by the Government, without the need for legislation. The voluntary codes are strict and are rigorously applied.
To brand stretching?
They apply to advertising, promotion and sponsorship.
Let us be absolutely clear: do they apply to brand stretching?
They apply specifically to tobacco brand advertising and promotion and to sponsorship. Other goods are not our concern. We represent the tobacco manufacturers and we are concerned with the brands of tobacco and cigarettes that they sell and manufacture.
I would like to be clear about that, because that answer was not clear. Is a racing car with the word "Rothmans" on it covered by the voluntary agreements?
Absolutely.
Is the Benson and Hedges snooker tournament covered?
In the United Kingdom, a racing car would not display the word "Rothmans", because the voluntary agreement forbids the use of identifiable brand names on cars at events in the UK.
What about snooker tournaments?
At televised events, the brand image would not be portrayed on screen, although its name may be included in the title of a tournament.
Are designer clothes that just happen to carry a brand name banned under the voluntary agreement?
Having a brand name on clothes is banned. If a participant in a sport, whatever it is, has branded clothing—
I am not talking about sport; I am talking about designer clothes.
As I have tried to point out, that is an entirely separate matter.
So designer clothes are not covered by the voluntary agreement.
They are covered only in the sense that, if goods or services carrying tobacco brand names are portrayed in such a way that smoking is encouraged or addressed, they are banned.
So simply carrying the name is not banned.
If the name appears on another product that has nothing to do with tobacco, that is permitted. Some aftershaves carry tobacco brand names.
It was said that the voluntary agreement lacks a statutory basis. However, the agreement has changed a number of times—at the request not of tobacco companies, but of ministers—to match changes in elements of the health agenda. We expect changes to be made in future. We could sit down with the health department in Scotland to discuss areas of concern and changes to the voluntary agreement. That is one of the offers that we are making to the committee.
I cannot believe that the industry is spending £30 million a year to target people who already smoke.
We bandy around figures such as £30 million—
That is your figure, not mine.
That is correct; I do not dispute the figure. However, no tobacco brand appears in the top 10 advertised products in the UK.
The total amount spent on car advertising is about £250 million.
All the data to which I refer come from external sources. The amount of money that is spent on advertising cigarettes is relatively small compared with the amount that is spent on advertising detergents, cosmetics, toiletries, cars and banks. The biggest advertiser in the UK is the Government.
The Government does not kill you, at least not yet—although that depends on which country you live in.
I want to pursue advertising, targeting and consumption. Many people have difficulty accepting your assertion that tobacco companies are not interested in using advertising to attract new customers, even though every year in Scotland the industry is losing 13,000 people through death alone. To some extent, the intentions of the tobacco companies are irrelevant, because whatever the adverts are intended to do, everyone will see a billboard advertising a packet of cigarettes, regardless of whether they live in a deprived or a non-deprived area or whether they are young or old.
I have no evidence to support that, although I understand what you are saying.
Do you not feel instinctively that that is likely to be the case?
The rules to which we conform are absolutely clear. Tobacco advertising must not encourage people to start smoking or encourage smokers to smoke more. It must be targeted at existing smokers.
I do not dispute that you target your advertising at existing customers. However, the Government's priority should not be to manage the decline of the tobacco industry; it should be to cut the number of people who die of smoking-related illnesses every year. Even if you target your advertising only at existing customers, that surely undermines the efforts of the Government and of Government agencies to encourage existing smokers to give up smoking. It may be that 20 per cent of every advert is a health warning, but 80 per cent concentrates on the product that is killing people. Even if we accept what you say, the effect of cigarette advertising is surely, at the very least, to reinforce positive images of smoking among existing customers and to undermine efforts to cut the number of people who smoke and who die from smoking.
We have to remember that cigarettes are not banned in the United Kingdom and that the tobacco industry is a legal industry.
I accept that.
We believe that we have a right to talk to adult smokers. At the moment, the voluntary agreement allows us to use the posters to which you have referred. In 1997, we went to the Government in Westminster with proposals, one of which was to give up using posters. We were trying to help the new Government to deliver our perception of what its health objectives were. The Government refused to talk to us. Those proposals were on the table back in 1997. I say that to re-emphasise a point that I made previously. Voluntary agreements are living and breathing things—we can add, we can take away and we can negotiate.
If you are happy to stop advertising on billboards, as you were in 1997, why do you not just do it?
With or without advertising, awareness of tobacco products and their availability will not go away. As Tim Lord said, tobacco is a legal product. We have to face the increasing problem of smuggling and the availability of tobacco in pubs and car-boot sales around the country. Even at Ayr races, where we undertook one of our pack-collection studies, we found that, on average, 30 per cent of discarded cigarette packs were non-UK duty paid. That is the level of penetration in Scotland. People are aware of the products.
You have talked about the existing voluntary system that governs tobacco advertising and sponsorship. Will you outline for us the consequences for a company that is found to be in breach of those regulations?
The voluntary agreements are overseen by the Committee for Monitoring Agreements on Tobacco Advertising and Sponsorship. Until 1999, it met under an independent chairman. The last chairman was Sir Clive Whitmore. He retired in 1999 and the Government chose not to replace him. However, the committee still meets. When complaints are received, they are dealt with by representatives from the TMA and Government departments: the Department of Health and the Department for Culture, Media and Sport, which is concerned with sponsorship issues. Complaints are considered against the code and adjudications are made. In all events, we defer to the Department of Health's decision. If there is a breach of the code, our companies act promptly to redress it.
Do you consider those actions adequate? Are any financial penalties invoked?
No financial penalties are invoked. I suppose that the penalty that overhangs the whole matter—the ultimate sanction—is for the Government to refuse to proceed on a voluntary basis and to hasten legislation. Details of the complaints are published in an annual report. The process is open.
You suggest in your submission that, instead of legislation, we should consider a new system of voluntary regulations and that that could be explored for Scotland. What could such regulations bring to bear that is not already in place, given that what seems to be in place is not all that exacting, certainly not financially? Would you consider complying with a voluntary system to which financial penalties were attached?
I am not sure that we want to get into negotiations at the moment.
I am asking a hypothetical question.
We would be happy to discuss anything. I have not answered your question directly because I am not going to.
Would you care to elucidate? Could you throw a little more light on your comment?
I go back to the tangible example that I gave in response to Nicola Sturgeon's question. In 1997, we made a proposal to the Westminster Government that we would, among other things, stop using posters. We are keen to understand what the Government wants and to respond to that. Over the past 20 or 30 years, we have responded to successive Governments by amending the voluntary agreement to reflect their needs. We are happy to do that.
On page 4 of your submission, you suggest that there is
The main point is that, if we had clear evidence that advertising bans had an effect on consumption from places where such bans have been implemented, it would be difficult to argue what we argue. We do not consider that there is a clear or consistent message from around the world about the impact of a ban on advertising tobacco consumption. To draft legislation around the premise that an advertising ban will reduce consumption is disproportionate and inappropriate.
I thank the witnesses for their advance submissions, which are always useful. Has your organisation—or have member companies—ever made donations to political parties, whether Opposition or Government parties?
The TMA has not. I cannot speak for our member companies.
I cannot speak for them on that, either. My understanding is that the current practice is not to make donations to political parties. I do not know what happened in the past and would not want to comment on it.
We could get the answer for you.
Yes, you could give the committee the answer in writing later. Donations have been made to political parties while they were in opposition, but donations to parties that are in government are perhaps more important. We would also like to know the sums from individual companies, because over the years there has been a known relationship between some political parties in government and the tobacco industry. That leads on to the tax issue—
Can we ferry back to the points that you were—
I am leading on to the tax issue.
I do not particularly want you to go down that line of questioning.
I am sure that you do not.
I would prefer you to go down the line of questioning that we talked about, which included consideration of identity cards. That is what you told colleagues you were going to ask about.
We will hop on to that.
Yes, with pleasure. Thirty per cent of the UK tobacco market is contraband product. Of that, 5 or 6 per cent consists of people who go to Europe to buy cigarettes for personal consumption. Although some of that amount is indeed for personal consumption, some of it consists of products that are brought back by white van man. A large proportion of the remaining 20-odd per cent of cigarettes are counterfeit cigarettes that come from places outside the European Union. How do children get hold of those products? Those products are sold on high streets, in car parks, at boot sales, in pubs and in many locations. I can name streets—for example, Holloway Road in London—where people selling those products can be found.
I presume that the people involved are adults, who sell the product on to children.
No constraints on whom they sell their products to apply to such people. If a 10-year-old child goes up to a guy who is selling on the street, that guy will sell to the child. Shopkeepers are under an obligation not to sell to children under the age of 16 and are increasingly encouraged to ensure that the young people to whom they sell have proof of identity. That is one of the schemes that we support, as my colleague indicated. Trading standards officers are vigilant in ensuring that that obligation is enforced.
Are you saying that, overall, the heaviest threat of illicit sales to children has moved from rogue shopkeepers to the sale of contraband cigarettes on the streets, in which advertising does not feature?
Yes—you will never have heard of many of the brand names involved, although you will have heard of some of them, especially in the case of counterfeit cigarettes. Such cigarettes are uncontrolled. None of the regulations that normally apply to the purchase of cigarettes applies to street sales, much of which is run by organised crime. That is frightening. We use the term "disorderly" to describe street sales. If you pay £4.50 for a pack of cigarettes from a retailer, you may pay only £2 on the street corner.
You spoke about proof-of-age cards to show retailers that people were buying cigarettes legally. Is that idea now less important because street contraband sales pose a greater threat?
You are correct: cards will work only in the legitimate retail sector. The Government will have to address contraband sales, especially, as you suggest, because of sales to children.
The Government has its own billboards and is currently advertising the fact that it has recruited 900 extra Customs and Excise officers to combat illegal tobacco sales. I have no doubt that you approve of that.
Indeed.
Why do you think that the Government has recruited 900 extra Customs and Excise officers to fight cigarettes but not to fight heroin?
I cannot speak—
I think, Dorothy—
Is it because heroin does not bring in tax revenues as tobacco does?
I do not think that that is an appropriate question—
I do.
Well, you may do, but I am in the chair and I do not. That is my ruling.
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