11.2 Tobacco industry expenditure on advertising

Show / hide chapter menu

It is difficult to assess how much money the Australian tobacco industry invests in advertising and promoting its products. In the US, all tobacco companies must annually report the total amount that is spent on advertising and promotion to the Federal Trade Commission.28 Unlike their American counterparts, Australian tobacco companies are not legally required to disclose equivalent information.

The FCTC requires: 'if (a party) does not have a comprehensive ban, the disclosure [should occur] to relevant governmental authorities of expenditures by the tobacco industry on advertising, promotion and sponsorship not yet prohibited'.1 p 12 For example, as point-of-sale advertising is not currently banned at the federal level, Australia could legitimately call for the industry to disclose all promotional spending in this area.

In 2000, eight years after the 'above the line' advertising ban in Australia, advertising agency Belgiovane Williams Mackay (BWM) obtained the $10 million account for the newest entrant into the Australian tobacco market, Imperial Tobacco, which then controlled just 16.5 percent of the market. BWM's advertising brief for Imperial was for 'below-the-line' marketing activity, including point of sale material, packaging, events management, e-commerce and relationship marketing.29 If the remaining 83.5 percent of the tobacco market were spending an equivalent amount, then at least a further $50 million was then being spent on tobacco advertising. This is likely to be a very conservative estimate because it does not include any price discounting or promotions that the manufacturers would pass on to retailers who stock and sell their products.