The European Court of Justice in Brussels ruled Oct. 5 that the European Union directive banning advertising of tobacco products should be annulled. Meanwhile, a full ad ban, including stricter anti-smoking rules, went into effect in South Africa Oct. 1.
"The court decided that the European Parliament and the Council of Ministers did not have a sound legal basis on which to ban tobacco advertising," said a spokeswoman at the European court. The ban was wrongly adopted as a means to strengthen the European single market, she said, when in fact it was a health measure. The EU would have had difficulty adopting the ban on health grounds, since powers in this area remain largely with national governments.
GERMAN LEGAL CHALLENGES
The European Court was responding to legal challenges to the tobacco advertising directive made by Germany, as well as by four tobacco companies -- Imperial, Gallaher, British American Tobacco and Rothmans. The directive threatened to outlaw billboard advertising of tobacco by July 2001, newspaper and magazine advertising by 2002, and sports sponsorship by 2003, although "world level" sports such as Formula One were exempted from the ban until 2006.
The U.K. government has separately pledged to introduce its own, more stringent legislation restricting tobacco advertising.
In South Africa, the ban signals a defeat for the country's tobacco and free-speech supporters after a prolonged battle.
The Tobacco Products Control Amendment Act, which took effect Oct. 1 except for a phase-in period on certain provisions, bans any kind of tobacco advertising or promotion except for limited point-of-purchase material; prohibits smoking in public places except in specially designated rooms; and prescribes maximum tar and carcinogen levels in cigarettes.
Any ad "designed to promote or publicize a tobacco product or to promote smoking behavior" is outlawed. This means even if no brand name appears, an ad placed by a cigarette company may be illegal.
NO `ORGANIZED ACTIVITY'
Existing sponsorship and promotional contracts will be allowed to continue until next April. Other than those, tobacco companies cannot promote "any organized activity" within the country.
Regulations governing point of purchase took effect Jan. 1, limiting the size of posters to 1 square meter, placed within 1 meter of the point of purchase.
There are almost no loopholes in the act, which provides for a fine of up to $30,000 or a prison term for placing ads or using a tobacco trademark.
Local media have been girding for a ban for some time. While tobacco advertising at its peak accounted for 30%-40% of billboard revenues in South Africa, the billboard industry started working to find substitutes two years ago. In the 12 month period to June 2000, outdoor was the second fastest-growing medium in the country, with a 30% increase in ad revenue. Its biggest advertising categories now are beer, carbonated soft drinks, detergent and soap.
Radio was another medium that depended heavily on tobacco advertising. About 20% of its revenue came from this source. It was hard-hit by the loss of tobacco advertising initially, but has bounced back with a 36% growth in revenues in the 12 months ended in June, an accomplishment gained by cutting rates.
AD SPENDING ALREADY DOWN
Tobacco companies already had cut back their ad and sponsorship activity in anticipation of the new law. Last year, they spent about $30 million on media advertising, which, when adjusted for inflation, represents a 12% to 15% drop from 1998. Tobacco marketers also have withdrawn from several major sporting sponsorships, including local cricket, golf and rugby competitions.
The industry's Tobacco Institute of Southern Africa said the regulations are "unreasonable, impractical, unenforceable, difficult to understand and generally in the nature of a knee-jerk reaction."
Institute CEO Edward Shalala said he was "shocked" that the Department of Health plans to set up a toll-free hot line for the public to "act as informers for the smoke police."
Piet Delport, executive director of the Freedom of Commercial Speech Trust, said the process of consultation with the tobacco industry was "merely to lend some respectability to a course of action that was already decided upon. It is incomprehensible that this manner of making unenforceable laws is still part of the new South Africa under a constitutional dispensation."