Ban on Tobacco Ads by the Government of India: Introduction

On Feb 6, 2001 Government of India (GOI) dropped a bombshell on the tobacco Industry when it announced that it would shortly table a bill banning Tobacco Companies from advertising their products and sponsoring sports and cultural events. The objective of such a ban was to discourage adolescents from consuming tobacco products and also arm the Government with powers to launch an anti-Tobacco Program. This decision seemed to have sparked an intense debate, not just over the ethical aspects of Government's moral policing but also over the achievability of the objective itself. Reacting strongly against the proposed ban, Suhel Seth, CEO, Equus Advertising said, "The ban does not have teeth. It is a typical knee-jerk reaction by any Government to create some kind of popularity for itself. The Legislation has not been thought thorough". In its reaction to the GOI's decision, ITC Ltd1. announced that it would voluntarily withdraw from all of the sponsorship events, irrespective of the legal position on the subject. In a statement it said, "ITC believes that this action on its part will create the right climate for a constructive dialogue that will help develop appropriate content, rules & regulations to make the intended legislation equitable and implementable". The complexity of the issue was that, the issue involved the tussle between the ethical and commercial considerations. On the one hand, was tobacco, the most dangerous consumer product known, which killed when used as the makers' intended. Therefore from an ethical standpoint, the Government had to discourage the habit, as it was responsible for the welfare of its citizens. On the other hand, the tobacco Industry was a major contributor to the State Exchequer (In the Year 2000-01 it contributed about Rs. 8000 crores in excise revenue) which was extremely important, given the financial crunch which it faced. In the light of the above statements, what approach should the government choose-the ethical or commercial and is it proper for government to interfere in matters of personal choice in the first place? To make the matter more complex, there was the question- was the objective achievable at all and was it equitable? The answers to these questions lay in understanding the viewpoints of both sides-those in favour and those against such bans.

The Ayes'

The ban was not unusual keeping in view the international precedents. Countries like France, Finland, and Norway had already imposed similar bans. Advocates of free choice opposed to these bans, saying these amounted to unwarranted intrusion by the state in the private lives of its citizens. But, others pointed out that the state had the right to intervene in the overall interest of the citizens. They cited the example of drugs like cocaine, which was, banned the world over. In 1981, the Supreme Court (of Appeal) in Belgium gave its ruling that a ban on tobacco advertising was not unconstitutional. In 1991 the French Constitutional Council declared that the French ban on advertising tobacco products was not unconstitutional as it was based on the need to protect public health and did not curtail the freedom of trade. There were many precedents of restrictions being imposed on the advertising of dangerous or potentially dangerous products even if these products remained in the market (e.g. firearms, pharmaceutical Products). According to the World Health Organisation (WHO), tobacco accounted for over 3 million deaths in 1990, the figure rising to 4.023 million deaths in 1998. It was estimated that tobacco related deaths would rise to 8.4 million in 2020 and to 10 million in about 2030. There was an increasing fear that tobacco companies were inducing children and young people to begin experimenting with tobacco products, and in this way initiate regular smoking, as this held the key for the industry to flourish. Internal industry documents2 released in the United States, described 14-24 year olds as 'tomorrow's cigarette business.' In a case which started in 1991 and ended in 1997, RJ Reynolds Tobacco company, marketer of Camel cigarettes, was forced to withdraw its mascot, Joe Carmel, an animated camel, from all its advertisements, after the California Supreme Court (USA) ruled that the company could be prosecuted for exploiting minors. The accusation was that the slick, colourful advertisements (using an animated camel) appealed to the children and encouraged them to smoke. In India, analysts estimated that cigarettes contributed only 0.14% of the G.D.P and the health costs roughly translated to 0.21% of the G.D.P. So the revenue logic of huge contribution in the form of excise to the Exchequer did not seem to be valid. Also, given the state's significant contribution to health care, smokers, by damaging their health were in fact enhancing the State's expenditure. Questions were also raised about the economic impact of such a ban, given the fact that the tobacco industry provided direct and indirect employment to 26 million people. However, a study on tobacco consumption and employment3, showed that effective policies to reduce smoking were likely to increase, and not decrease employment. The reason for this was that when people stopped smoking, the money did not disappear from the economy. It was spent

on other goods and services, which the study showed, were more labour intensive. This, in turn produced more jobs. The impact of cigarette advertising on consumers was another contentious issue. A World Bank report4, had pointed out that policymakers who wanted to control tobacco should be aware of the fact that bans on advertising and promotion would prove effective, only if they were comprehensive-covering all media and all uses of brand names and logos. The report also published the details of a comprehensive study of over 100 countries, comparing the consumption trends over time in those countries where were relatively complete bans on advertising and promotion and where were no such bans5. In the countries with nearly complete bans, the downward trend in consumption was much steeper (Refer Figure 1) FIGURE I TRENDS IN CIGARETTE CONSUMPTION

In 1992, the Department of Health (DOH), UK reviewed various forms of evidence to assess whether tobacco advertising affected the aggregate demand for tobacco products.6 Four countries (Norway, Finland, Canada and New Zealand) were chosen, as these countries had already imposed an advertising ban and enforced it effectively. The main conclusion of the DOH was that the evidence available on these four countries indicated a significant effect. In each case, the banning of advertising was followed by a fall in smoking. In 1997, in a similar study for the International Union against Cancer, the available data in the same four countries was examined7. It was found that per capita consumption of cigarettes (15 years +) had dropped between 14 and 37 % after the implementation of the ban. (Refer Table I). TABLE I THE EFFECT OF BAN ON TOBACCO CONSUMPTION Country Date of Ban Drop in Consumption until 1996

Norway Finland New Zeeland France

1st July 1975 1 March 1978 17 December 1990

th st

-26 % -37 % -21 %

1st January 1993 -14 %

In three out of the four countries, smoking among young people had decreased, while in one it remained stable. The conclusion was that advertising bans worked if they were properly implemented as part of a comprehensive tobacco control policy8.

The Nays'
Those who opposed the ban contended that by putting a ban on advertisements and sponsorships by tobacco companies, the state was effectively stepping in to tell smokers that they were incapable of deciding by themselves what was good or bad for their health and that, therefore it had to play the role of a responsible nanny. Said Amit Sarkar, Editor, Tobacco News9, "Adults who consume tobacco do so of their own free choice. The risk falls entirely on them and is fully explained to them. If we lose sight of this principle, then we lose sight of the truth on which all the free societies depend, namely that freedom and risks are inextricable, and whomsoever assumes the right to save us from risks, is also assuming right to limit our freedom". The Supreme Court in Canada, held, "The State seeks to control the thought, beliefs and behavior of its citizens along the line it considers acceptable. This form of paternalism is unacceptable in a free and democratic society". Also, if it were legal to manufacture and sell tobacco products, it should be legal to advertise it as well. Tobacco companies around the world have been vehemently denying that they sell the concept of smoking. They insist that the role of marketing, was merely to assist adults in making an informed brand choice and that advertising merely enhanced the market share of a particular brand. The companies claimed that advertising for a particular brand was most relevant to consumers who already smoked that brand. Cigarette advertisements were least relevant to people who did not smoke and were neither directed at them nor likely to influence them. They also denied that they targeted teenagers and young people as a growth strategy and said that they only targeted adult smokers. In 1998, in a survey conducted by the Indian Market Research Bureau (IMRB), 49% of the respondents said they started smoking to see what it was like, 24% said 'all my friends smoke'; and no one said advertising had induced them to start smoking. The Nays' Contd... Scepticism regarding the effectiveness of the ban also stemmed from the fact that the ban seemed to have ignored the reality of the Indian Market. The organised-sector, which mainly produced cigarettes, comprised only 16% of the market, while remaining 84% was accounted for by other

products like 'beedi,' 'ghutkas,' etc. The ban was likely to have no major impact on their sales. Analysts felt that ban on ads would reduce the consumers ability to distinguish between products of differing quality, and slow down the progression of Indian consumers up the scale from harmful tobacco consumption (like ghutka, zarda etc.) to more refined forms. Some analysts pointed out that the ban could lead to spurt in surrogate advertising, which could defeat the very purpose of the ban. Moreover, there seemed to be no sense in imposing such a ban on the domestic players, when the foreign magazines that sold in India and the television channels that were uplinked from foreign countries carried advertisements by cigarette multinationals. For example Marlboro, which sponsored Formula I racing was very popular with well-to-do Indian youth, even minors. Formula I could be viewed on the sports channels, as they were uplinked from outside the country. Analysts felt that this would put the Indian industry at a disadvantage. The Tobacco industry was a large contributor to the State Exchequer. In 2000-01 it contributed Rs 8,182 crore which was 12% of the total excise revenue. About 90% of this came from cigarettes. India was the world's third largest tobacco maker, with an annual output of 550 million Kg. Analysts were of the opinion that any control may have an adverse impact on the contributions to the state exchequer. Again, the industry provided direct and indirect employment to 26 million people- of this, roughly 6 million were farmers and almost 5 million were 'beedi' rollers. Stringent measures could cause millions of workers to be displaced. It was also felt that, India, being the third largest producer of tobacco in the world, with all the multiplier effect, and with one of the lowest per capita tobacco consumption in the world, should tread the anti-tobacco path with caution. Some analysts contested claims that the state had to spend considerable amounts on providing healthcare as a result of smoking induced illness. They pointed out, that in a developing country like India, where the expenditure on public healthcare, insurance and pension systems was meagre, the argument of health costs was irrelevant. Even allowing that illnesses caused by smoking led to an increase in state spending on healthcare, it could be argued that these illnesses also reduced the state's liabilities on old-age pensions- assuming that those who fall ill would die prematurely as a result. A number of research studies conducted to determine the relationship between advertising and smoking indicated that advertising did not seem to influence people to smoke (Refer Box). A study conducted by the Center for Monitoring Indian Economy (CMIE), found that there was

only a weak correlation between the money spent by cigarette companies on advertisements and the consumption of the cigarette (Figure II). The Nays' Contd... FIGURE II CORRELATION BETWEEN CIGARETTE CONSUMPTION AND AD SPEND

In the US, a study10 was done to examine the relation between cigarette advertising and consumption between 1961-90. The finding was that "aggregate advertising expenditure and total consumption of cigarettes in the United States were not significantly related from 196190." An advertising ban was implemented in Norway in 1975, but consumption of tobacco remained virtually unchanged from the period before the ban all the way through 1995. Researchers from the Norwegian National Council on Smoking and Health11 who compared smoking trends in Norway with those in seven other European countries, also found that Norway had the highest per capita proportion of adult smokers among all the countries surveyed. Smoking among young people increased in Finland after its tobacco-advertising ban in 1978, according to researchers at the University of Helsinki who conducted studies in the late 1980s and early 1990s. A 1993 study12 examined annual cigarette consumption in 22 OECD (Organization for Economic Co-operation and Development) countries from 1964 to 1990. The conclusion was that advertising bans, where they existed, did not reduce tobacco consumption.

The Haze
Tobacco consumption was growing in the developing countries while it was falling in the developed countries. Concerned over the welfare of its citizens, who were fast becoming a prey,

the Indian government decided to ban advertising by tobacco companies as a first step towards its goal of discouraging smokers. But the advocates of free choice and the cigarette companies (the worst hit in the tobacco industry when the ban was imposed) insisted that ban was no solution to the problem. Said Shunu Sen, CEO, Quadra Advisory, "Excess of anything is bad. Excess of coffee, tea...whatever. Where do we draw the line?" They argued that that the ban was unjustified, as advertisements didn't promote smoking, and that the ban was not the right solution to the problem. The Cigarette companies expressed concern that the ban would deny them levelplaying field. The issues discussed above at best gave an idea of how complex the problem was. This was the crux of the problem. The problem itself seemed so intricate as it questioned the very domain of propriety; both ethical and commercial and the 'ifs and buts' were too hazy and one too many. No wonder the debate over the state control on tobacco consumption was clouded in an enigmatic tussle-a tussle between rhetoric and plain talk, of arguments and counter arguments, of claims and counter claims. Only time would say who would have it, the Ayes or the Nays.