The big smoke job: a century of peddling a killer product

Australia is known as the darkest market for big tobacco. Our laws and regulations are some of the strictest in the world.

But no matter our laws and policies, big tobacco is always one step ahead. Its current tactic is to rebrand itself as a friend of public health, marketing nicotine-laden “harm reduction” smokeless devices like vapes, e-cigarettes and heated tobacco products as safer alternatives to smoking.

Tobacco company Philip Morris paid News Corp tens of thousands of dollars to run four pro-vaping science features in The Australian.

From creating shell associations to represent them, to getting in the ear — and pockets — of politicians, the strategies have stayed the same even as the laws have changed.

And with a Senate committee into tobacco harm reduction handing down its report today, we thought it might be useful to look at a century of big tobacco tactics.

Making cigarettes patriotic, feminist and sexy

Cigarettes were first mass-marketed around the 1920s. Companies had successfully gotten a generation of young men hooked with cigarettes provided alongside military rations to US soldiers in WWI. Cigarette demand in North America tripled during the war.

But there was a social taboo against women smoking. So in 1928, the American Tobacco Company hired Edward Bernays — the father of public relations — to change things.

American Tobacco wasn’t the first company to market to women — but it was by far the best at it. Bernays resolved to make Lucky Strike Cigarettes, made by American Tobacco, the tool of a modern woman. He wanted to make cigarettes a symbol of female emancipation and freedom from suppression.

So the “Torches of Freedom” campaign was launched, one of the most successful PR stunts in history.

Bernays recruited female friends to smoke as they marched in the 1929 Easter Parade down Fifth Avenue in New York. One young woman, Bertha Hunt, stepped out into the crowd telling reporters men had told her to put out her cigarette, and it “it was high time something was done about the situation”.

Ten other women followed her with reporters who had been tipped off about the protest snapping photos. The next day, The New York Times ran a story with the headline “Group of Girls Puff at Cigarettes as a Gesture of ‘Freedom'”.

At the same time he was marketing cigarettes as a symbol of freedom, Bernays was also wiggling his way into women’s insecurities.

Bernays wanted to reinforce the idea that slim was in. He sponsored studies published in major media outlets highlighting the detrimental effect of sugar. He then sent photos of slender models to fashion reporters and industry heads.

Also in 1929, Bernays launched the “Reach for a Lucky instead of a sweet” campaign, appealing directly — and only — to women. Ads showed slender women haunted by their fat shadows.

This early example of advertising preying on consumers’ self-esteem was effective. Sales of Lucky Strikes increased by more than 300% during the first year of the campaign. The number of female smokers doubled within a decade, and American Tobacco’s profits skyrocketed.

Across the next few decades, advertising ramped up with big tobacco advertising cigarettes as a suave, sexy and sophisticated thing to do.

Advertisers’ efforts were only slightly dampened by the landmark 1950 Wynder and Graham Study, the first in a long line of studies to link cigarettes to cancer.

In response to the study, big tobacco launched a major disinformation campaign, running ads in 400 newspapers headlined: “A Frank Statement to Cigarette Smokers”.

For more than 300 years tobacco has given solace, relaxation and enjoyment to mankind. Among one time or another during those years critics have held it responsible for practically every disease of the body.

Big tobacco also formed the Tobacco Industry Research Committee, sponsoring ads, publishing white papers and paying for articles which promoted smoking.

As the evidence against tobacco grew, companies pivoted to selling “healthy alternatives” such as filtered, menthol or slim cigarettes.

Loopholes, lunches and lobbying

When bans on advertising tobacco on TV and radio came into effect in the ’70s, the industry started looking for new ways to market its products, Sydney University senior lecturer in public health Becky Freeman told Crikey.

“The tobacco industry has been incredibly well funded compared to public health,” she said. “They have access to more lawyers, more media firms and more marketing agencies. Public health is always a step behind the tobacco industry.”

Tobacco companies can’t display their logos in stores or on packaging, or in any way market directly to the customer.

So now they’ve started targeting retailers.

In a landmark study which Freeman worked on, Sydney University researchers spoke to 10 informants from four tobacco companies operating in Australia. It found that one-third of tobacco retailers received a benefit or incentive from a tobacco company in return for doing something for the company.

Incentives ranged from lush holidays and exclusive yacht parties to paying for a retailer’s marketing fees and events. Big tobacco offers cash rebates for every thousand cigarettes sold, and even sometimes offer cash in hand to small retailers to display their products at the top of the stores’ price list.

The events were not to be missed, as one participant pointed out:

If you couldn’t make [the party], you were livid because you were like, I missed out on this party that everyone is still talking about months later. And then, it comes up again and people are clawing to go to them, because they were just so much fun!

High profile celebrities like John Farnham and Jimmy Barnes were hired for events, while staff were given training sessions — sometimes at international resorts — to help them better sell the product.

And despite Australia’s stringent regulation around packaging, no legislation exists to stop big tobacco from donating to political parties.

It all came to a head in 2010 when Australia became the first country to pass plain packaging legislation, replacing colourful logos with warning labels and images of cigarette-related diseases. Big tobacco fought back — hard.

The Alliance of Australian Retailers was born, a tobacco industry front representing retailers who would be affected by the law. The alliance sent out an open letter that said:

There is no reliable evidence anywhere in the world that plain packaging will stop people from taking up smoking, or help people to quit. But we do know that it will make it harder for us to run our business.

It was later revealed British American Tobacco had put $2.2 million into the association, Philip Morris had funded $2.1 million and Imperial Tobacco Australia just over $1 million.

By 2011, the group had snatched up Malcolm Turnbull’s former press secretary Tony Barry, who was reportedly earning more than $20,000 a month to lobby Liberal MPs and crossbenchers against tobacco reforms.

The Australian Institute of Public Affairs’ (IPA) Tim Wilson, now an MP, also argued the government may have to compensate tobacco companies up to $3 billion for their lost intellectual property, while saying in 2010:

Any funding has no impact on the policy positions we take whatsoever.

British American Tobacco is one of the IPA’s funders.

When big tobacco lost its case against the plain packaging laws in our High Court — and was made to pay the government’s legal fees after judges called the defence “delusive” — Philip Morris took Australia to the free trade tribunal.

Tobacco lawyers found a 1993 treaty between Australia and Hong Kong which had a provision that Australia couldn’t seize Hong Kong-based property.

So Philip Morris moved its headquarters to Hong Kong and tried to say the trademarks on its cigarette packages were being effectively seized. It lost that case too.

Despite their losses, big tobacco continues to lobby politicians. While Labor stopped accepting donations from tobacco companies in 2004, followed by the Liberal party a decade later, other parties still happily hold out their hand for tobacco cash.

Across the past five years the National Party has raked in $120,000 from Philip Morris. Around $80,000 of that came in the last two years alone

In 2013 the NSW Liberal Democrat Party accepted tens of thousands in donations from Philip Morris, with then-federal senator David Leyonhjelm thanking smokers in the Senate.

Your generosity to the nation’s treasury is truly staggering. The government collects around $8 billion in tobacco excise each year… [We] will actively campaign for smokers’ support in the election.

Is it possible to separate funding from policy? According to a large body of research and 2018 Senate committee into the political influence of donations, the answer is no.

“I think it’s ludicrous,” Freeman said. “As a researcher, if you take any sort of private sector funds or a grant from the government, you have to declare those conflicts of interest because it influences what you do.

“Even if somehow you were able to completely separate yourself from the funds that you get and the people that you’re lobbied by — why on earth would you take money from an industry that’s killing your constituents?”

The restrictions have worked — In 2019 11% of Australians smoked tobacco daily, down from 12.2% in 2016 and 24% in 1991.

But don’t feel sorry for big tobacco — they’re far from broke. Companies have shifted their cigarette sales abroad, where there are fewer restrictions.

In China, 52.1% of men smoke. The six largest tobacco companies have recorded year-on-year profit growth largely thanks to increasing smoking rates in Asia and Africa.

The profits of the world’s six largest transnational tobacco companies were US$44.1 billion in 2013. That’s the same as Disney, Google, Coca-Cola, McDonald’s, FedEx, AT&T, General Mills and Starbuck’s yearly profits combined.

Big tobacco as ‘part of the solution’

In Australia, big tobacco wanted a seat back at the table. In a 2005 speech at the National Press Club in Australia, then-senior vice-president of corporate affairs at Philip Morris International David Davies offered an olive branch to public health. He said big tobacco could be a helping hand in getting people off their product.

Philip Morris could be:

A positive contributor, indeed a partner in shaping future policy for tobacco.

The aim was to get back in the ear of policymakers, scientists and public health groups to promote their products. Only now, instead of cigarettes, it’s vapes, e-cigarettes, and heated tobacco products.

Chief executive of the Australian Council on Smoking and Health Maurice Swanson told Crikey Philip Morris’ offer was seen for what it was: “a Trojan horse to undermine current regulatory approaches in Australia.”

While the speech didn’t work, it hasn’t stopped big tobacco from pursuing their smoke-free goals. Across the UK and US, Philip Morris ran ads saying they were trying to stop selling cigarettes, writing in 2018:

We want to replace cigarettes with products … which are a better choice for the millions of men and women in the UK who would otherwise not stop smoking … No cigarette company has done anything like this before.

They’ve also set up the “unsmoke your world” campaign which claims smoke-free products are less harmful than cigarettes.

The science on how much less harmful — if at all — smoke-free alternatives are to cigarettes is unclear. There have so far been some links found between vaping products and lung disease.

Why are these products so important for big tobacco?

For starters, the global vape market is set to hit revenues of more than US$60 billion between 2020 and 2025. Vapers are on the rise, with vaping among smokers more than doubling to 9.7% between 2016 and 2019.

Vaping has also recruited non-smokers and young people. Nearly two out of three people who currently smoke and one in five non-smokers aged 18 to 24 reporting having tried e-cigarettes in Australia.

One company, Juul, sells brightly coloured, flavoured vape pens around the size of a USB. In the US, the company bought ads on teen-focused websites for Nickelodeon, Cartoon Network, and Seventeen magazine.

Studies have found these flavoured vapes get kids hooked for years. In 2018, Altira Group — which owns Philip Morris — bought a 35% stake in Juul Labs for US$12.8 billion.

E-cigarette brands have gotten around tobacco advertising laws by sponsoring influencer’s content on social media platforms, using celebrities like British singer Lily Allen and Oscar-winning actor Rami Malek to post product endorsements. There is consistent evidence this approach works.

“[Tobacco companies] have fulfilled their strategy in terms of re-engaging with young people and getting as many of them addicted to nicotine as possible,” Swanson said.

To tackle this growing trend, Health Minister Greg Hunt announced in June this year new restrictions around vapes and nicotine juices. Currently, vapes and e-cigarettes can be bought from registered stores or online, while nicotine juices are illegal to buy or import without a doctor’s prescription. The new rules will uphold the nicotine juice restrictions, and ban selling and importing smokeless products.

The industry was up in arms. Lobby groups sprung up from every direction.

The Australian Tobacco Harm Reduction Association also ramped up its pro-vaping campaign. The doctor-led charity has taken around $43,000 from vaping and tobacco industry-related funding to get set up.

The Australian Taxpayers’ Alliance has also lobbied the Coalition. Its executive director Brian Marlow is head of Legalise Vaping Australia, which is funded by vaping stores.

The Australian Retailers Association — distinct from the Alliance of Australian Retailers — established the Australian Retail Vaping Industry Association (ARVIA) in 2019, though dissolved the group earlier this year.

Twenty-eight Liberal and National MPs wrote a letter condemning Hunt’s restrictions.

Meanwhile Philip Morris sponsored pro-vaping articles in The Australian, likening e-cigarettes to the invention of the car and space travel, which may have breached tobacco advertising laws. Pro-vaping politicians also frequently appear on Sky News. (Rupert Murdoch sat on the board of Philip Morris for 12 years.)

This lobbying worked: Hunt delayed the ban until 2021 and established a Senate committee into tobacco harm reduction.

Today the committee handed down its report, supporting the ban. But Coalition senators Hollie Hughes and Matt Canavan broke ranks, recommending vapes and e-cigarettes be legalised and regulated.

With Australia’s relatively small population and dwindling smoking rate, you’d think it would make sense for tobacco companies to cut their losses and focus their campaigns elsewhere. But, according to Swanson, Australia is key in big tobacco’s strategy around “smoke free” products because of our harsh restrictions.

“Australia is described by the tobacco industry as the darkest market in the world because we’ve consistently shut them down,” Swanson said.

“They would be pitching to other countries and saying, look, Australia has very strict tobacco regulations, and they’ve now accepted the information that we’ve given to Australia’s regulatory authorities on the safety and benefit of these devices, you should follow,” he said.

For now big tobacco will have to stick to their century-old tactics: lobbying politicians, sponsoring studies and exploiting every loophole they can.