What may be local politics in one country, may, for transnational tobacco corporations, have profound impact on their global strategy.  When Australia decided to insist that cigarettes be sold in plain packages, all hell broke loose, and the tobacco companies came hunting for the government that could upset its global apple cart.

If the Australian experiment was successful and smoking rates decreased, then other countries would follow its lead. For Big Tobacco, this was a potential disaster, and Australia needed to be stopped.

The tobacco industry reached into its bag of tricks, which served it well in past campaigns, to frustrate efforts to reduce its deadly trade. In this case, it turned to the Alliance of Australian Retailers, an association of small shopkeepers who said that the policy would damage their business. As it turned out, this hastily created organization was no stranger to the big tobacco companies, which were quietly bankrolling it.

When this failed, it turned to lobbying foreign governments to use international agreements on intellectual property to stymie the proposed legislation. As only countries can take action under the rules of the World Trade Organization, the unlikely antagonists were Cuba and Ukraine.

Big Tobacco’s are arguing that plain labelling “confiscates” their intellectual property, namely their trademarks and livery, by which their brand is recognized by consumers.

Just like past campaigns, Big Tobacco has been able to convince other industries that they, too, could be threatened. And so, during the APEC meeting in Hawaii in November 2011, US Chamber of Commerce, the National Association of Manufacturers, the US Council for International Business and the National Foreign Trade Council lobbied Australian Prime Minister Julia Gillard.  The campaign against plain packaging is intended to blow smoke into the eyes of the public, diverting them from the real game, which is about recruiting a new generation of smokers. Packaging reform strikes at the heart of their ability to appeal to new customers.

The life blood of the tobacco industry has always been to attract new converts to smoking ever since they started marketing candy cigarettes to children during the 1950s. In February 1990, Philip Morris commissioned a research report that pointed to the potential for increased sales among Australia’s large youth population. Perhaps most worrisome is that this report identified children 15 years and under as representing a “significant market opportunity.” It would be nice to think that the tobacco companies have repented such ruthless exploitation of younger people, but I doubt it. They just need to be more careful, as marketing to underage children is not a good look.

Nevertheless, tobacco companies have studied the data and know where their new customers come from. Most smokers start before they turn 18, about half before 16. This market segment is even more vital as existing customers give up voluntarily or die of smoking-related diseases.

To understand why the tobacco companies have gone ape about government legislation that would force companies into plain packaging, it is necessary to expose the covert world of viral marketing. Cyberspace is the unregulated domain that tobacco companies are now colonizing with gusto.

Facebook, e-mail chain letters, proxy website, Youtube and Tweets are being mined by Big Tobacco for fresh customers. Carefully crafted messages are disseminated through the new media, seemingly in the genuine voices of youth, designed to create a buzz around a brand without being obvious.

Provided this is done without leaving fingerprints (and with the Internet, this is incredibly easy), companies can step around the law and public disapproval. They fully understand the line “On the Internet, nobody knows you’re a dog.” Unfortunately, for the tobacco industry, research by Sydney professor, Simon Chapman and Becky Freeman has found the evidence that tobacco company employees are behind many internet postings, and these probably only represent the tip of the iceberg.

There’s one problem with viral marketing. Its success depends on the new generation of customers recognizing a particular brand and the color scheme that goes with it. Marketing expert Crawford Moodie from Stirling University, Scotland, told a conference in Brussels in February this year that cigarette packaging was the industry’s “silent salesman.” From an online survey Moonie found that almost one in three young people admitted to choosing a certain brand of cigarettes because they were attracted to the pack’s appearance. Another speaker at the conference, Karine Gallopel-Morvan, a lecturer at Rennes University, France, said that “plain packaging can undermine this advertising function.”

Therefore, forcing brands into plain packaging undermines all the good work of viral campaigns, which can only succeed when the internet buzz they create is translated into new recruits identifying and buying a particular brand. Otherwise, advertising dollars spent on the Internet are wasted.

What the tobacco companies fear most is that pioneering legislation in Australia could spread. The UK is already looking into plain packaging, as is the European Union. Australia is the front-line and Big Tobacco can’t afford to lose.

8 Comments for this entry

  • Greg says:

    Your post is spot on. The behaviour of big tobacco companies — especially their ruthless exploitation of the young and vulnerable — is absolutely sickening.

    How do the “marketing gurus” who orchestrate these manipulative media campaigns live with themselves?

    And yet the tobacco companies have for years been teaching their tactics of denial and obfuscation to other industries, as documented in Naomi Oreskes’ recent book Merchants of Doubt.

    I hope the Australian government passes its plain packaging legislation, helping stamp out a filthy habit that claims many innocent lives each year.

  • Steve Halls says:

    Interesting site. I never seen one dedicated to globalization. I’ll keep an eye out for new postings.

  • Henry Thomas says:

    Tobacco companies say that plain packaging will affect sales. Don’t they understand that that’s the point! Why should they get compensation because the government has reduced their ability to kill more of their customers?

  • Larry White says:

    Couldn’t agree with you more.

  • Dennis Kell says:

    There is perceptibly a lot to know about this. I know in my bones that tobacco companies are evil, but never the details. Thanks for the heads-up.

  • What about developing countries? That’s where tobacco companies are really expanding their markets and no one is doing anything about it.

  • Eddy says:

    I hope that the plain packaging works and that what started in Australia spreads around the world.

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