The Federal Trade Commission staff opened its official court challenge of R.J. Reynolds Tobacco Co.'s now-retired Joe Camel ad campaign by arguing that RJR "knew or should have known" the campaign would have a direct impact on kids.

"The evidence was that this wasn't a campaign directed to adults with a spillover to kids," said staff lawyer David Shonka during the administrative hearing that launched what could be a six-week trial.

NO STATISTICAL STUDY

Mr. Shonka acknowledged the government agency had no statistical studies to demonstrate the 10-year campaign, which Reynolds abandoned last year, specifically caused youngsters to smoke or increase their smoking.

Instead, he said, growth in the number of underage smokers buying Camels while the advertising was running; Reynolds' own marketing strategy memos; and other government reports showing that tobacco ads do affect kids were sufficient to prove that RJR illegally targeted kids.

The Old Joe advertising was "more successful at increasing underage smokers than adult smokers," Mr. Shonka said, adding that Reynolds "spent years and vast sums of money to develop a consumer profile that bears a remarkable resemblance to 14- to 17-year-olds."

`JIHAD AGAINST JOE'

RJR, on the other hand, accused the FTC staff of a "jihad against Joe" and undertaking a politically popular prosecution against a relatively minor factor in youth smoking without any evidence to back up its charges.

"No study has linked Joe to youth smoking," said John B. Williams, a Washington lawyer representing RJR.

He called youth smoking of the Camel brand a "flyspeck" compared to their use of rival brands.

Mr. Williams said increases in youth smoking cited by the FTC as demonstrating Joe's power coincide with increases in alcohol use in the U.S. and tobacco use abroad and could simply reflect societal trends.

Calling Joe "one of the most effective campaigns in the history of consumer marketing" in turning around brand preferences of adult smokers, Mr. Williams said the FTC has to show the Joe campaign was "the" factor that caused smoking increases by underage smokers before it can take action to restrict the advertising.

"Joe has become a scapegoat, a politically incorrect symbol," he said.

He charged that the FTC "has lost track of the First Amendment."

In the first days of testimony last week, RJR challenged some of the studies that cited advertising as a cause of youth smoking and, specifically, the FTC's reliance on the studies to go after Joe.

CREATING A `NORM'

Under questioning, Paul Torrens, a professor of health services administration at UCLA who chaired the National Institute of Medicine's 1994 report mentioning advertising as a factor in causing kids to smoke, said cigarette advertising creates a "norm" that smoking is acceptable and, together with other influences, encourages children to start smoking.

He admitted, however, that while tobacco ads may play a role, the panel could find no specific evidence of advertising alone causing problems and that it hadn't looked closely at Joe Camel ads vs. other ad campaigns.

Although RJR discontinued the Joe Camel campaign last year, the marketer is fighting the FTC staff action because of the sanctions being demanded and because the agency wants RJR to acknowledge targeting kids.

Camel advertising is handled by Mezzina/Brown, New York.

Copyright November 1998, Crain Communications Inc.