SpinWatch, 17 October 2005
 This week Conservative Party MPs will vote in the first round of their leadership contest. Kenneth Clarke, MP is one of the four contenders standing. Clarke is currently the non-executive Deputy Chair of British American Tobacco. Until last year, he was also Chairman of British American Racing.
Earlier this month, SpinWatch wrote to both the Serjeant At Arms Office and Parliamentary Commissioner for Standards asking them to investigate whether Clarke had abused the privileges of the House, or been negligent in registering his interests.
This week, we are posting further evidence from BAT's own internal documents that once again questions whether Ken Clarke is fit for office.
Documents show that BAT's involvement in Formula One was not only designed to circumvent advertising restrictions put in place to protect public health, but also to appeal to the "youth" market. The documents also undermine BAT's initiative on corporate social responsibility.
At BAT, Clarke chairs the Corporate Social Responsibility (CSR) Committee. Many people argue there is a complete contradiction in terms between a tobacco company whose products kill an estimated 750,000 people a year and the concept of corporate responsibility.
There is evidence that BAT sees CSR as a business opportunity that gives it a "competitive edge" over other tobacco companies.
At a Corporate Social Responsibility Workshop in November 1998, which Clarke attended and facilitated the “Wrap-up” session, one workshop was called “Moving from where we are now to where we want to be”. The first item of this workshop was to “identify actions that would give BAT a competitive edge.”
Later drafts of this document have this statement removed.
More worryingly, is that the documents suggest that BAT was using CSR as a way of "enhancing" their reputation and therefore undermining the need for regulatory control of the company or tobacco industry, through such measures as the World Health Organisation's Tobacco Free Initiative.
Documents copied to Clark show that “Further to the Board presentation at Castle Combe on the WHO Tobacco Free Initiative .. five task force teams” had been “established to enhance the company’s reputation”. The document noted that “Recommendations on action will need to be communicated to the Steering Group and Kenneth Clarke and Rupert Pennant-Rea.”
- British American Racing - a way to market cigarettes to the "young" and a way of circumventing any advertising ban on cigarettes?
As well as being Deputy Chair of BAT, until last year Ken Clarke was also the non-executive chairman of British American Racing (Holdings Limited).
BAT entered Formula One in 1997 by setting up British American Racing. Internal documents show that originally BAT’s involvement in BAR had a dual purpose – to appeal to young males and to circumvent tobacco regulation and advertising bans.
By 2003, BAT was becoming disillusioned with its F1 adventure. British American Racings (Holdings Limited) was actually put in receivership in December 2004, to enable BAT to sell its remaining stake to Honda, which eventually happened in October 2005.
In 1998, the company saw its involvement in Formula One as a “priority initiative” as well as issues such as ETS (environmental tobacco smoke – second hand smoke” and the “EU advertising ban and tobacco control issues.”
There is no doubt that BAT saw BAR and Formula One as a way to market cigarettes for two of its most popular brands, 555 and Lucky Strike. BAT documents call Formula One “The single most powerful global sports medium”.
Jimmi Rembiszewski, Global Marketing Director, for BAT wrote that “Formula One offers massive unprecedented exposure to British American Tobacco's international brands State Express 555 and Lucky Strike”.
Company documents show that F1 was a way of promoting their own brands: “Two of BAT's strategic international brands will sponsor the BAR Formula I team: Lucky Strike and 555. Both brands will compete under the umbrella of BAR. This means that 3 brands: "Lucky Strike", "555" and "British American Racing" will be visible and exploited to the public.
- BAT saw F1 as a way of reaching youth
But who was BAT marketing to? Other marketing documents talk about F1 offering “Image Ratings” that were “Youthful, popular; international and Masculine.”
A creative brief for BAT outlined its Key message: “British American Racing is THE new young, exciting, dynamic, international Formula One racing team with a tradition of excellence”
The same document talks about “Tone of voice” is appropriate to market BAR. “Young, exciting, aggressive, authoritative”.
- BAT saw F1 as a way of Circumventing the EU Advertising Ban and other restrictions
To coincide with BAT’s entry into Formula One, the company undertook a “Brand Amplifying” campaign with the creation of BAT’s “Lucky Tribe” logo. This could be used to indirectly promote BAT’s brands, especially “Lucky Strike”, but the company hoped it would not be directly seen as tobacco advertising as it was a “non-tobacco brand”.
This is what is known in the trade as “TMD” - Trade Mark Diversification - and was a way of promoting the brand, without supposedly promoting tobacco. Therefore it circumvented the forthcoming EU advertising ban on tobacco advertising. It could therefore be seen as a cynical way of exploiting BAT's involvement in Formula One.
The documents show that Lucky Tribe and Lucky Strike were actually the same thing:
Early marketing documents called “Lucky Tribe”, the “Lucky Strike Tribe,” although the Strike was later dropped for being too close.
Other documents suggested that "Lucky Tribe" was a synonym for "Lucky Strike" -
“Strategy: To portray the team as the "Lucky Tribe" as a synonym for Lucky Strike”.
And that Lucky Tribe was a way of communicating the Lucky Strike brand:
“Communicate the key Lucky Strike brand values through the "Lucky Tribe" TMD [Trade Mark Diversification] (both TV product and merchandise range)” Therefore the concept was to use the TMD – Trademark Diversification – tactic in countries where tobacco advertising restrictions already applied. The same marketing document talked about the need to:
“Deliver long-term brand communication in mediums/activities not available to core brand exploitation using TMD”. In case there is any doubt as to what BAT was up to, a draft of a “British American Racing Lucky Strike Formula 1 Briefing Film” included the voice over: “… and clearly, in years to come, legislation will become more rigorous and restrictive. Lucky Tribe gives us the opportunity to develop an Affinity brand which is free from restrictions”. This is then struck out as obviously being too sensitive.
Although the company denied that Lucky Tribe was the use of a non-tobacco trademark to be used in countries were tobacco advertising was banned, another document shows that this was exactly the case: it states that in “In Branding restricted markets : Team logo "Lucky Tribe" application to replace Lucky Strike logo” Another document puts forwards “potential questions and lines of interrogation" that had to be rebuffed. Questions included:
“So you are building an alibi brand”
“So the fact that the EC is banning advertising in a couple of years has nothing to do with this?
“If Lucky Tribe is linked to your F1, some of the reasoning must lie in the forth coming tobacco ban”
“I don’t understand why a tobacco company is launching a non-tobacco brand. And a non-tobacco brand that is called practically the same name as a tobacco brand.”
Another briefing document gave draft answers to be given on the tricky question of Lucky Strike and Tribe, but the interviewee was only to give responses if asked:
One question was: “Is Lucky Tribe not simply a marketing device to maintain the visibility of Lucky Strike imagery in markets where the use of tobacco trademarks is banned?
Another Is British American Tobacco's return to Formula One anything more than an effort to circumvent the growing restrictions on tobacco advertising around the world? The answer for this was “To be provided”.
- Lucky tribe – a way of marketing to kids?
The company’s advertisers were also mindful the F1 and Lucky Tribe were ways of promoting cigarettes to kids. Questions to be rehearsed on F1 were:
“What steps are you taking to ensure that your sponsorship of Formula One is not targeted at children?” The answer was “to be provided” On Lucky Tribe they included:
“Is the web-site a way of attracting minors to cigarettes?”
“How will you control it not attracting minors?”
The document then says: “But the advertising will attract minors to Lucky Tribe”.
What more can we say ...
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