B.A.T MAY LIGHT ADS FOR LUCKY STRIKE, PALL MALL

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Lucky Strike cigarettes, a fixture of 1950s and '60s advertising, may be slated for a quick ad revival following the $1 billion purchase of American Tobacco Co. by B.A.T Industries, owner of Brown & Williamson Tobacco Corp.

"It would be amazing to have acquired a great name if they were not going to do something with it," said Paul Beaufrere, an analyst who tracks B.A.T for James Capel & Co., London.

Mr. Beaufrere said the company already had rights to Lucky outside the U.S., so turning Lucky Strike into a world brand would only be logical. Rivals Philip Morris Cos. and R.J. Reynolds Tobacco Co. already use Marlboro and Camel, respectively, as world brands.

Other industry observers suggest advertising would be for a new filter-tip Lucky identical to that sold in the rest of the world. The U.S. version has no filter and lost its traditional "LSMFT/Lucky Strikes means fine tobacco" advertising as Americans switched to filtered brands.

Similarly, Pall Mall is an American Tobacco brand B.A.T had rights to and advertised outside the U.S. Pall Mall may get increased support from B.A.T in the U.S.

B.A.T bought American Tobacco Dec. 22 after settling Federal Trade Commission objections to the deal by agreeing to sell off U.S. rights to American Tobacco's discount Montclair brand in the next year and offer the acquirer American Tobacco's premium-price Tareyton brand.

B.A.T also picks up Carlton, Misty and Bull Durham; Brown & Williamson's brands include Kool, GPC Approved, Viceroy and Capri.

All will be merged into Brown & Williamson, making a series of quick brand decisions incumbent. A Brown & Williamson spokesman said no decisions about advertising have been made.

LCF&L, New York, which B.A.T dropped following the deal, had handled American Tobacco's $20 million in ad spending-primarily on Carlton, Misty and Montclair-while Grey Advertising and Tatham Euro RSCG, Chicago, share Brown & Williamson's $40 million in ad spending.

Grey is expected to be the big beneficiary; the agency's London office along with the Bates Worldwide network already do Lucky Strike's current "American original" campaign in various countries.

Analysts expect B.A.T to up Brown & Williamson's brand support well above the $60 million combining of the two ad budgets.

"There is an amalgamation of two businesses with a substantial reduction of extra cost and the possibility of a wider portfolio for the long term," Mr. Beaufrere said. "They will tend to use some of the savings to make more of a push."

B.A.T said the deal will give it 17% of the U.S. tobacco market and make for a more competitive environment in the market dominated by Philip Morris and RJR.

Brown & Williamson said American Tobacco Chairman-CEO Donald S. Johnston left and it was starting an intensive study of how to integrate American Tobacco's operations into its own.

Other analysts said they don't see any immediate major changes.

"It's not going to have a major effect on fundamentals in the industry," said Barry Ziegler, an analyst with A.G. Edward & Co., St. Louis. "It presents a little stronger player on a combined basis."

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