Tobacco Advertising and Promotion Bill

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Mr. Ernie Ross (Dundee West): Here we go again.

The Chairman: Order.

Mrs. Spelman: I have to state for the purposes of Hansard that the central section lists tobacco retailers. We understand from the Minister that it would be legal to continue in that way. A series of other businesses that advertise on the same page have larger slots. If I understand it correctly, we are going to make it illegal for tobacco retailers to do the same, but they will not have been used to that. Some who saw other purveyors of retail articles advertise in Yellow Pages products such as recording and cleaning machines and a range of other items might advertise because it was common practice. They will get the message that there is a ban on tobacco advertising, but they might wonder what they can do beyond putting their names and addresses in Yellow Pages. The guidance becomes all important at that stage.

Under the amendment, retailers of specialist tobacco products could be certain that they could include details about their existence, location and activities in directories, references and books and on websites, but they need clearer guidance on what other forms of generic advertising that pertain to their businesses, such as signs saying ``Suppliers of Fine Cigars'', may be outlawed.

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Retailers will find it difficult to accept such constraints on their normal commercial practice. The guidance about what specialist tobacco suppliers may do is not crystal clear. As I have said on numerous occasions, it is unreasonable to expect specialist tobacco retailers to test the opinion of the courts as to what constitutes a generic advertisement for a specialist tobacco product. It should be clearly stated that generic advertising that does not specify a brand will be permitted. A sign that reads ``Suppliers of Fine Cigars'' gives no indication of brand. If we want to cut smoking prevalence and we know that branded products are the driving force behind that prevalence, we must re-examine what generic advertising a specialist tobacconist may be allowed.

The group contains a number of different and unrelated amendments that are designed to make the clause clearer for specialist tobacconists, who will read with great attention the Minister's response. I hope that she will accept the spirit in which the amendments were tabled. The aim was to make the clause more workable for small businesses that do not have the resources to clarify in court what we, as legislators, should be able to clarify for them.

Mr. Ian Bruce: On amendment No. 32, will the Minister clarify what is the difference between retail and wholesale? In clause 4, it is clear that a wholesaler selling to a retailer can send any communication as long as it goes there directly, but there are problems with banning advertising or allowing advertising only in certain areas. Line 21 refers to a

    shop selling tobacco products by retail.

A number of businesses, such as wholesalers that sell to retail tobacconists and the retail alcohol trade—off-licences and publicans—may be selling to two completely separate audiences. Wholesalers that have a legitimate advertising and promotional strategy may have people entering their premises who may be not tobacco retailers, but retailers of other products. That will create a minefield—individuals who purchase products other than tobacco from the wholesaler will be faced with advertisements and promotional items. That will, in effect, encourage them to become smokers or to buy a particular brand for their own consumption.

To specify that exemptions apply only to retailers, not wholesalers, is an example of poor drafting that may lead us into yet another minefield. Legitimate wholesalers that are carrying out promotion work to retailers might be excluded from doing so, because they may be in contact with retailers who buy other products from them.

What about a wholesaler such as Makro? Only retail businesses can have Makro cards, yet I suspect that 90 per cent. of its customers are buying goods for their own consumption. Does the Minister have any thoughts about whether a wholesaler that, in effect, sells cigarettes to people for their own consumption will be excluded from so doing under the Bill when it advertises or takes part in promotional activity within the store, by the use of the word ``retail'' in line 21 of the clause?

Mrs. Spelman: I hope that the Committee will bear with me. I am missing my Whip this morning. He would have kept me in order. My hon. Friend the Member for Mid-Worcestershire (Mr. Luff) sends his apologies to the Committee— following a trip to France, he has food poisoning. No doubt, he would have pointed out to me that I had not explained amendment No. 31. I wish to deal with all the amendments together, albeit that they deal with different items.

Amendment No. 31 would reduce the amount of products that would be calculated for total sales from one half to a third. I shall explain the reasoning behind it. The required 50 per cent. threshold of total sales of

    ``cigars, snuff, pipe tobacco and smoking accessories''

is high, when we take into account that a high percentage of the sales price of cigarettes and hand-rolling tobacco comprises excise duty. The duty on pipe tobacco and cigars is lower and, in general, it is not applied to other smoking accessories. It is therefore easier for sales of cigarettes and hand-rolling tobacco to be high and for those sales not to be of as great significance to the profit margin of the specialist tobacconist as sales of cigars, pipe tobacco and smoking accessories.

That there is differential excise on different tobacco products is an important point. The threshold for qualification as a specialist tobacconist should be reduced from one half to one third. Without the amendment, there is a great risk that certain specialist tobacconists that are not necessarily represented by a big lobby or have any particular clout in respect of certain legislation will be discriminated against. Differential excise duty will affect the calculation of sales on which the clause is based. I am grateful that the Committee has allowed me to explain the amendment, which otherwise might not have been clear.

Yvette Cooper: I shall speak to each of the amendments in turn, as they would have different effects. Amendment No. 9 would remove the regulation-making power relating to specialist tobacconists. We do not anticipate using the powers. The status quo on advertising in the average specialist tobacconist shop is fine by us. The power to introduce regulations is provided to cover future developments and in case the defence for specialist tobacconists is abused and used to promote tobacco advertising in a way that goes against the broad intentions behind the Bill. I refer not to the promotions or advertising that take place in the average specialist tobacconists at the moment, but to new forms of advertising and developments that we have not anticipated that may arise under the defence provided in clause 6. Let us suppose that cigars become the big fashion among teenagers and the big tobacco product that all teenagers want to smoke, or that a specialist tobacconist product becomes the fashionable product for children and results in anxiety about children on public health grounds. It is not the intention behind the Bill that a loophole should be allowed to develop.

If present circumstances continue, we do not anticipate using the powers. However, we believe it right, given the broad intentions behind the Bill, to take the powers in reserve. It is clear in the Bill that specialist tobacconists may advertise cigars, snuff and other specialist tobacconist products anywhere on their premises.

Amendments Nos. 32 and 33 are related. They are designed to end the focus on the shop and focus instead on the business. It would be wrong to broaden the defence for specialist tobacconists to include all forms of business as opposed merely to shops and for good reason. The rationale behind the limited exemption for specialist tobacconists, which relates to the European directive, was that people who go into such shops have already decided that they are interested in purchasing tobacco products.

A purist argument would be that we should prevent all tobacco advertising in specialist tobacconists except at point of sale, regardless of who they are, because they promote and sell tobacco products. We have not taken that approach. We accept that they should have a specialist exemption because people have already chosen to purchase a product or have already decided that they are interested in purchasing a tobacco product when they walk in the door.

However, that principle does not apply to mail order, for example. It does not apply to business conducted beyond the walls of that shop. Why should specialist tobacconists be allowed to bombard households with direct mail about tobacco products, even if those products may be less harmful, depending on how they are smoked? Why should they be able to advertise over the internet or anywhere else tobacco products to people who have not walked into the premises and chosen to go into a tobacco shop to buy a product?

Mrs. Spelman: One answer is that, if the United Kingdom contains only 350 cigar manufacturers, having a shop in a particular village or town would mean that much of the customer base of those manufacturers would be simply too far away for practical purposes for the sale of such products. There are simply not enough of them when divided among 57 million people.

Yvette Cooper: Like everyone else, manufacturers are allowed direct point-of-sale advertising, including on the internet, subject to the regulations. Like everyone else, they can respond to requests for information about their products, just as we have said that other forms of tobacco product vendors or producers should be able to do. However, this is a public health Bill and we judge these exemptions on whether or not people are promoting tobacco products.

There is a distinction between those who walk into a tobacco shop and decide that they want to purchase and those who have not decided whether they want to purchase cigars or anything else receiving mailshots, coupons or any other form of unsolicited advertising through the post. Such people may be trying to give up smoking. Why should we allow that type of exemption? We can accept an exemption if people have already made the choice, but there is no clear justification for an exemption for specialist tobacconists. They will have the same ability as everybody else to do direct point-of-sale advertising on the internet, or to communicate with their customers, subject to the rest of the Bill. However, it would be wrong on public health grounds, given the overall aim of the Bill, to allow a particular sort of direct marketing and advertising to continue.

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Prepared 6 February 2001