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Tobacco Advertising and Promotion Bill


 

These notes refer to the Tobacco Advertising and Promotion Bill as introduced in the House of Commons on 14th December 2000 [Bill 6]

TOBACCO ADVERTISING AND PROMOTION BILL


EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Tobacco Advertising and Promotion Bill as introduced in the House of Commons on 14 December 2000. They have been prepared by the Department of Health in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2.     The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

SUMMARY

3.     The Bill bans advertising and promotion (including sponsorship) of tobacco products, with certain limited exceptions. If passed it will come into force on a date or dates to be appointed by the Secretary of State. The Bill will apply to England, Scotland, Wales and Northern Ireland.

BACKGROUND

4.     The United Kingdom Government entered office with a manifesto commitment to ban tobacco advertising. Initially the government proposed to fulfil its commitment through implementing Directive 98/43/EC banning tobacco advertising, promotion and sponsorship. Two consultation documents on implementing the tobacco advertising ban were published, on 10 December 1998 (at the same time as the White Paper "Smoking Kills") and 17 June 1999. The latter consultation document included draft regulations to implement the Directive. However, the Directive has been annulled by the European Court of Justice on the grounds of an incorrect legal (treaty) base. As a result, the Government's manifesto commitment is to be fulfilled by this Bill.

5.     The ban is part of the Government's tobacco control strategy, as set out in "Smoking Kills", published on 10 December 1998. The Government believes that an advertising ban could reduce tobacco consumption in the longer term by 2.5%. This would translate into an estimated 3000 lives per year saved.

THE BILL

6.     The Bill defines "tobacco advertisement" as an advertisement whose purpose or whose effect is to promote a tobacco product. The term "advertisement" is not defined and bears its natural meaning. The Bill covers direct advertising (for example, posters, billboards and press advertising) and other forms of promotion, such as direct marketing. It also covers so-called brandsharing, a form of indirect advertising whereby non-tobacco products use the tobacco branding of a particular tobacco product as a means of promoting that tobacco product (and thereby widen the promotion of the tobacco product). The Bill also covers media other than paper, eg electronic communications (such as the internet) and video. It does not cover television and radio which are already subject to regulation under the Broadcasting Acts or other means.

7. The Bill sets out in separate clauses prohibitions on tobacco advertising, free distributions (including coupons), sponsorship and brandsharing. The reason for such a comprehensive ban is that anything less far-reaching would leave considerable scope for promotion of tobacco products, as has been demonstrated in other countries.

COMMENTARY ON CLAUSES

Clause 2: Prohibition of Tobacco Advertising

8.     This clause makes it an offence to publish a tobacco advertisement in the United Kingdom. The clause also covers advertising of brandshare products. Essentially anyone who is involved in the commissioning, design, printing, publishing, sale or distribution of such an advertisement could be guilty of an offence. This makes each member of the chain potentially liable, subject to the available defences in clause 5 and 6, from the tobacco manufacturer down to those who distribute or sell an advertisement.

9.     The Bill does not make incidental commentary on smoking or tobacco products an offence. It is not intended that the public at large, journalists etc should be prevented from commenting on tobacco products or that the representation of smoking and tobacco products by those engaged in creative or artistic pursuits (actors, painters, producers etc) be prohibited.

10.     Subsections (1) and (2) include the phrase "in the course of a business" to make it clear that what is prohibited is promoting tobacco products as part of a commercial enterprise designed to persuade others to use tobacco products.

11.     Subsection (3) covers cases where an advertisement, for example, is included as a separable insert in another publication or is attached to a free giveaway included with another publication.

12.     Subsection (4) makes clear that the offence of distributing may be committed by anyone involved in the transmission of a tobacco advertisement by electronic means subject to the defences in clause 5 and 6.

13.     Subsection (5) exempts persons who do not carry on business in the United Kingdom from the offence of publishing (or causing publication) where they do so via the internet. This reflects the fact that access to a website cannot be controlled by its originator.

14.     Subsection (6) recognises the fact that internet service providers (ISPs) may not be in a position to know that a particular electronic communication promotes a tobacco product. Once their attention is brought to the offending communication ISPs need to remove it to avoid committing an offence.

Clause 3: Advertising in Newspapers, Periodicals, etc

15.     This clause makes clear that in the case of advertising in the press, anyone in the chain from commissioning to selling an offending publication could be guilty of an offence. This includes proprietors, editors and advertising agencies. The clause also applies where publication is by electronic means. Defences are set out in Clause 5.

Clause 4: Advertising: Exclusions

16.     This clause sets out the exceptions to the advertising ban set out in clauses 2 and 3.

17.     Subsection (1)(a) deals with communications between those engaged in the sale of tobacco products. This reflects the fact that various parties involved in the chain from manufacturer to retailer need to communicate with one another about tobacco products. As sale of tobacco products to adults is lawful, appropriate commercial communications are not prohibited. So long as these communications do not reach the wider public they will be excluded from the ban. Subject to the decision of any court, this exclusion would be unlikely to apply if such communications were contained in a publication which was on general sale at, say, a newsagents.

18.     The Bill does not seek to define the tobacco trade more closely, but it will cover manufacturers, wholesalers, retailers and distributors, whether or not they also manufacture, sell or distribute other products. In the final analysis, the courts would determine who is in the business of selling tobacco products.

19.     Subsection 1(b) allows information on tobacco products to be sent to consumers who request that information. However, this does not permit tobacco advertisements to be sent to all consumers on a database; each consumer must individually request that information on each and every occasion. A request for information cannot be considered as a request for further information in the future.

20.     Subsection 1(c) deals with foreign publications. Publications printed outside the United Kingdom whose principal market is not the UK market are exempted from the general ban. For example a publication in a language other than English printed in another country is very unlikely to be classed as principally for the UK market. However, in the final analysis, the courts would decide the meaning of "principal market" in any particular case. Internet versions of foreign publications are also covered by this exemption.

21.     Subsection 1(d) excludes from the ban inflight magazines on non-United Kingdom airlines. This separate exclusion reflects the fact that although they are likely to be printed outside the United Kingdom they are not aimed at a clearly defined national market. The definition of "United Kingdom airline" builds on that contained in section 4(2) of the Civil Aviation Act 1982 but excludes airlines whose principal place of business is in the Channel Islands and the Isle of Man (as determined by the Civil Aviation Authority) as this Bill does not extend to the Channel Islands and Isle of Man.

22.     Subsection (2) provides that advertising where tobacco products are offered for sale is allowed as long as it is in accordance with regulations to be made by the Secretary of State and the Scottish Ministers. This covers shops and sales over the internet. In shops, the intention is to allow the display of the products around the till area, typically on a gantry in a corner shop or in a kiosk in a supermarket, but to ban the display of advertising material elsewhere on the premises, for example in window displays. The Ministers will consult on regulations to set out further, detailed conditions to ensure that this exemption is not used to widen the scope of permitted advertising. It is intended that the regulations will also clarify how the exemption applies to sales over the internet to ensure that responsible e-commerce in this area is not hindered.

Clause 5: Advertising - Defences

23.     This clause sets out the various possible defences for anyone charged with an offence under clause 2 or 3.

24.     Subsection (2) provides a defence in relation to an advertisement whose effect is to promote a tobacco product where it could not reasonably be foreseen by the defendant that it would have that effect. In most cases it would be expected that this would only function as a defence once, as the effect would be known thereafter.

25.     Subsection (4) provides a specific defence for distributors who did not know and had no reason to suspect that what they distributed infringed the ban. It applies equally to transmission by electronic means.

26.     Subsection (5) provides a defence for distributors involved in the electronic transmission of a tobacco advertisement who do not carry on business in the UK or were unable to prevent the distribution of the tobacco advertisement.

27.     Subsection (6) provides a defence for a seller of a publication where he did not know and had no reason to suspect that the publication contained a tobacco advertisement. This is to protect a seller such as a newsagent from having to look through all the publications he might sell to ensure that no such advertisement appeared. Again once the seller's attention is drawn to the advertisement he would need to remove the publication from sale.

Clause 6: Specialist Tobacconists

28.     Specialist tobacconists may continue to advertise non-cigarette and hand-rolling tobacco within, and on the outside of, their shops. This reflects the fact that they sell products which are generally not bought or used by children and young people. There are some 350 such shops in the country.

29.     Subsection (1) permits advertisements of specialist products (not cigarettes or hand-rolling tobacco). It also gives the Secretary of State and the Scottish Ministers a power to make regulations to specify the extent of advertising in specialist shops more precisely and to ensure that this exemption is not used inappropriately.

30.     Subsection (2) sets out a definition of specialist tobacconists. These are retailers who specialise in non-cigarette and hand-rolling tobacco products - specifically, cigars, snuff, pipes, pipe tobacco and smoking accessories. These are products which do not appeal to children. The sale of these goods must account for the principal part of the specialist's income; those who merely sell cigars, pipe tobacco and smoking accessories as a sideline will not qualify.

31.     Subsection (3) sets out the basis for calculating whether a shop qualifies for the defence in (1). Subsection 3(b) ensures that new specialist tobacconists may benefit from this defence.

32.      Subsection (4) clarifies the meaning of "shop". Some specialist tobacconists operate from shops within shops, for example in a department store. Such shops within shops may comprise a self-contained cigar room and a counter area which is not physically marked off from the remainder of the store; where this happens advertising for cigars and other specialised products may only take place within or immediately outside the self-contained area. The display elsewhere of all tobacco products will be subject to clause 4(2) and the regulations pursuant to it. This does not prevent there being signposting for customers elsewhere in the store to indicate where the specialist tobacconist is located, so long as that signposting is not branded.

Clause 7: Developments in Technology

33.     This clause gives the Secretary of State a power to make an order to amend the provisions of the Act concerning publication or distribution of tobacco advertisements via electronic means in the light of technological developments if this should prove necessary. The reason for taking this power is that the pace of technological change in this area makes it very difficult to predict what new means of publishing or distributing may emerge.

Clause 8: Prohibition of Free Distributions

34.     This clause bans any free distribution where the purpose or effect is to promote a tobacco product. Experience elsewhere has been that where other areas of marketing are banned, the focus of tobacco marketing moves to direct marketing techniques such as free distributions, for example in clubs and bars. The effect of the clause will be a ban on the giving away of branded products such as cigarette lighters so as to reduce the amount of tobacco branding on display to the public as much as possible. The clause also bans the use of coupons such as the schemes whereby coupons inserted into cigarette packs are collected by customers and can later be redeemed for tobacco or other goods.

35.     Subsection (3) allows for products to be given away free to persons in the tobacco trade for the purposes of that trade.

36.     Subsection (4) provides a defence for someone who can prove that he did not know and had no reason to suspect that the purpose of the distribution was to promote a tobacco product, or that he could not reasonably have foreseen the effect of the distribution would be the promotion of a tobacco product. Once again this is a defence which would not be appropriate once the effect of the distribution had been pointed out.

37.     Subsection (5) defines "coupon". It includes, for example, tear-off strips of a cigarette packet which allows the consumer money off their next purchase.

38.     Subsections (6) and (7) give the Secretary of State a power to make regulations covering distributions at a nominal price. The intention is that this power would only be used if it emerged that products were being offered to consumers at nominal sums to promote tobacco products. For example, branded clothing might be sold for a nominal sum. Any such regulations would be preceded by a consultation process.

Clause 9: Prohibition of Sponsorship

39.     Subsection (1) prohibits anything done pursuant to a sponsorship agreement if the purpose or effect of this agreement is to promote a tobacco product. It applies to both the sponsor and the recipient. The Bill does not specify that the sponsorship agreements have to relate to any particular thing; typically sponsorship relates to an event or activity, such as a sporting competition or an artistic performance, but it could include sponsorship of a building or institution or service. These examples are not an exhaustive list.

40.     Subsection (2) defines a sponsorship agreement to include any form of promotion, whereby an event etc receives help in monetary or other form from an individual or organisation in return for advertising and promoting that individual or organisation's tobacco products. This clause does not prevent a tobacco company from giving money to support an event or activity, so long as the company's products are not given any promotion in return. For example, it is not intended to prevent a tobacco company supporting a theatrical production and being acknowledged for so doing, provided that the acknowledgement mentioned solely the name of the company and not any of its products, and did not involve any special treatment of the tobacco company over and above other sponsors, the purpose or effect of which was promotion of its products.

41.     Subsection (3) sets out a defence, where the defendant did not know and had no reason to suspect that the purpose of what was done as a result of the agreement was to promote a tobacco product or if he could not reasonably foresee that that would be the effect.

Clause 10: Brandsharing

42.     Brandsharing, or brandstretching as it is sometimes known, means the use of tobacco branding on non-tobacco products or services, or vice versa, to widen the promotion of the tobacco product. The rationale for taking action against this form of advertising is that it increases consumption of tobacco.

43.     Subsection (1) gives the Secretary of State power to make regulations concerning the use of such branding. It is intended that the regulations will set out limited circumstances in which brandsharing will be permissible. There will be full consultation on the scope of these regulations. Paragraphs (a) and (b) indicate that the regulations will apply to shared branding both in tobacco and non-tobacco products, goods and services.

44.     Subsection (2) makes clear that the regulations may be made only in relation to brandsharing where the purpose or effect is to promote a tobacco product.

Clause 11: Broadcasting

45.     This clause excludes from the scope of this Bill, the BBC, and all broadcasting media covered by Codes of Practice issued by the Independent Television Commission and the Radio Authority under the Broadcasting Acts. The advertising and promotion of tobacco products is well controlled by these bodies. Other broadcasting media will be subject to the provisions of the Bill.

Clause 12: Enforcement

46.     This clause sets out the authorities who will be responsible for enforcing the ban on tobacco advertising.

47.     Subsections (3) and (4) give Ministers in England and Wales, Scotland and Northern Ireland power to direct that any of the enforcement functions be taken over by them in any particular case or class of cases.

48.     Subsections (5) and (6) give a similar power for the Secretary of State in England and Wales or the Department of Health, Social Services and Public Safety in Northern Ireland to take over a prosecution. There is no need for this power to apply to Scotland as the Procurator Fiscal decides whether to prosecute (and then deals with any prosecution) once the authority considers that there should be a prosecution.

49.     These powers are intended to ensure that a particularly important or difficult prosecution need not be lost if the enforcement authority involved felt unable to take on or continue with the case, for whatever reason.

50.     Subsection (7) allows any magistrates court in England and Wales, and Northern Ireland to hear a case brought under this legislation. In general alleged offences will be tried locally but there may be reasons that make it necessary to try an alleged offence elsewhere. Again, there is no equivalent provision for Scotland in the light of the separation of the enforcement and prosecution functions there.

Clause 13: Powers of Entry etc.

51.     This clause sets out the powers of entry which enforcement officers may exercise. Such powers are standard powers for enforcement officers (see for example similar provisions in the Consumer Protection Act 1987 and the Food Standards Act 1999).

Clause 14: Obstruction of Officers

52.     This clause makes obstructing an officer of an enforcement body, or making false statements to an officer, an offence. There is a defence to the latter charge if someone can prove he did know that the information was false and had reasonable grounds to believe it was true.

Clause 15: Penalties

53.     This clause sets out the penalties for offences under the Bill as being either a fine or imprisonment. "Summary conviction" means that prosecutions under the Bill will be dealt with by magistrates courts. The penalty for obstructing an officer is a fine not exceeding level 3 on the standard scale; any other offences are punishable by a fine not exceeding level 5 of the standard scale, up to three months imprisonment, or both. A fine at level 3 is currently £1000 and at Level 5, £5000.

Clause 16: Offences by Bodies Corporate and Scottish Partnerships

54.     This clause provides that officers of companies as well as the companies themselves are liable to be prosecuted as appropriate.

Clause 17: Regulations

55.     This clause sets out further details on regulation and order-making powers. These powers cover the following areas in this Bill:

    (i) advertising at point of sale (clause 4(2))
    (ii) advertising within a specialist tobacconist (clause 6(1)(c))
    (iii) advertising by electronic means (clause 7)
    (iv) distributions at nominal amounts (clause 8(6))
    (v) brandsharing (clause 10)
    (vi) sponsorship (clause 18).

Subsection (3) provides that the order concerning advertising by electronic means (clause 7), and the regulations on brandsharing (clause 10) and distributions at a nominal cost (clause 8) will be subject to affirmative resolution, which means that they will have to be debated and approved by both the House of Commons and the House of Lords. Other regulations are subject to the negative resolution process.

56.     The Government and the Scottish Executive have agreed that those regulations and the order which are subject to the affirmative resolution process will cover the whole of the United Kingdom. The Scottish Parliament will make regulations covering advertising at point of sale, specialist tobacconists and sponsorship.

Clause 18: Transitional Provisions

57.     This clause gives the Secretary of State, or Scottish Ministers, powers to make regulations to specify when the ban on sponsorship in clause 9 is to take effect. This may not be later than 1 October 2006. This reflects the final deadline in the European Directive for the ending of tobacco sponsorship.

Clause 20: Commencement

58.     See Paragraph 63 below.

FINANCIAL EFFECTS OF THE BILL

59.     The financial effects of the Bill as far as central Government is concerned are likely to be between £50,000 to £100,000. This will comprise expenditure on training for trading standards officers in relation to enforcement and information campaigns to raise awareness of the ban. This will be met from existing budgets. Enforcement authorities may wish to reprioritise workloads in order to accommodate the initial impact of the Act. The financial implications are likely to be de minimis for any given authority.

EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

60.     The Bill will not increase the number of permanent staff in the public service. The Government expects there to be an initial period following the coming into force of the ban when trading standards officers will want to inform retailers and others of the ban, and possibly carry out enforcement action. This may require reprioritisation of resources.

REGULATORY IMPACT ASSESSMENT

61.     It is difficult to make precise estimates of the impact of a measure of this kind. The Government has estimated that the proposed ban on tobacco advertising, promotion and sponsorship would reduce consumption of tobacco products by approximately 2.5% eventually. Assuming that this estimate is accurate, the turnover of the UK tobacco industry could be expected to fall by around £300m per annum, although the amounts spent on sponsorship would be saved and could be reinvested elsewhere in the business. This would amount to around £90m-£100m per annum. Based on these assumptions, the Government estimates that the companies' profitability could fall by around £20m per annum and that the advertising industry could lose £50m per annum, although much of this could be recouped from other clients. Other businesses would benefit from consumers' redirected expenditure. Sports would lose their existing sponsorship money from tobacco but it is difficult to estimate the extent to which this sponsorship income would be recovered from other sources. The Government has assumed that it will lose £250m per annum in lost tax revenue through the reduction in tobacco consumption which is assumed to follow a ban on tobacco advertising, although some of this would be recouped if consumers spent the money on other taxable products.

62.     On the benefits side, based on the assumption of a 2.5% fall in consumption and prevalence, the NHS in England alone would save between £20m and £40m per annum and at least 1500 lives per annum would be saved, rising to 3000 per annum in the longer term.

COMMENCEMENT

63.     This Bill will come into force on a day to be appointed by the Secretary of State. The intention is that the appointed date will be two months after Royal Assent, save for the following transitional arrangements. A further three months will be allowed for:

  • advertising within retail outlets

  • In-pack promotion schemes ( promotion schemes where coupons inserted into packs, or parts of a pack, are collected by customers who later redeem them for goods)

  • Direct marketing contracts (only contracts which were set up before 8 October 1999).

ECHR COMPATIBILITY

64.     Section 19 of the Human Rights Act requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (defined by section 1 of that Act). On 14 December 2000 the Secretary of State for Health made the following statement on introduction of this Bill in the House of Commons

"In my view the provisions of the Tobacco Advertising and Promotion Bill are compatible with the Convention rights."

 
 
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Prepared: 15 December 2000