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Brown & Williamson Tobacco Corp., along with four other tobacco marketers, signed an agreement in November that will remove tobacco advertising from U.S. outdoor boards by April 23. In its place, 46 state attorneys general have the chance to plaster anti-smoking messages on them-at the tobacco companies' expense.

But now the states say that Brown & Williamson tried to renege on the agreement. They say the marketer canceled its media contracts as a way to get out of putting up anti-tobacco messages.

"That was a highly questionable violation of the agreement," said Dennis Eckhart, a California deputy attorney general who negotiated with the company.

Mr. Eckhart and spokesmen for several other state attorneys general said that only Brown & Williamson's decision to buy additional billboards of comparable value and give them to states prevented a lawsuit.

Brown & Williamson denies the allegation, saying it canceled the contracts to make sure its signs were down by April 23.

"In an effort to ensure all our billboards were taken out, we canceled our existing contracts," a company spokesman said.

The states were slow in requesting the space and "some specific locations became unavailable. We have provided equivalent locations," he added.


The tobacco industry spent more than $200 million in 1998 on outdoor advertising. Five months after it agreed to stop advertising on billboards, questions remain as to how it will redirect those marketing dollars.

Tobacco marketers haven't yet indicated if they will spend the money on other media or cut marketing spending. In 1971, when cigarette advertising was taken off TV, the industry switched its sales messages to other ad vehicles; but back then it didn't have to pay a multibillion-dollar settlement.

Two companies can redirect their marketing dollars immediately because they were not locked into long-term outdoor ad contracts. Sensing that an agreement with the states was likely, R.J. Reynolds Tobacco Co. opted for short-term contracts that would take it till the end of the first quarter, according to a company spokesman.

RJR bought $51 million in outdoor boards last year, for such brands as Winston and Salem.

Lorillard also bought only short-term boards, according to the state AGs.


The media contracts of Philip Morris USA, marketer of No. 1 cigarette brand Marlboro, and B&W don't run out until yearend. Each marketer won't be able to redirect outdoor ad funds to other media until 2000.

In the meantime, B&W said it will use some of the current production-cost savings to increase its newspaper and magazine buys.

Philip Morris declined comment on its immediate plans for spending.

"Billboards played a key role in our advertising to adult smokers," an RJR spokeswoman said. "Without them it won't be ideal, but we will focus on the available marketing vehicles we have."

Tobacco-industry analysts suggested that could include additional targeted mailings to smokers as well as mass advertising.


Greg Connolly, director of the Massachusetts Tobacco Control Program, said he has seen indications cigarette marketers are replacing some of their billboards with smaller signs at retail locations.

Although the big boards are history, the agreement allows signs at retail locations for cigarettes, and Mr. Connolly said street cart vendors who sell

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