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Smoke and mirrors? Big Tobacco slip(stream)s back into Formula One sponsorship deals

18 February 2019. Published by Stuart Harris, Associate

Despite widespread bans on tobacco advertising in Formula One, Philip Morris and British American Tobacco have secured major partnerships with Ferrari and McLaren, prompting investigations into their compliance with domestic and international advertising laws.

In recent months, two leading Formula One teams have announced major tie-ups that will see them promote non-tobacco 'initiatives' from Big Tobacco companies.

Ferrari announced its deal with Philip Morris' 'Mission Winnow' initiative back in October 2018, with the team featuring the project's brand assets with effect from the 2018 Japanese Grand Prix.

In a statement on 11 February 2019, McLaren confirmed its own partnership with British American Tobacco's 'A Better Tomorrow', with the co-branding revealed at the unveiling of its MCL34 livery on 14 February 2019.  The co-branded car will get its racing debut at the Australian Grand Prix on 17 March 2019.

Both initiatives focus on science and innovation rather actively promoting tobacco related products. Philip Morris's 'Mission Winnow' is centred around a simple goal: "[to] drive change by constantly searching for better ways of doing things", and "efforts to transform not only our company but an entire industry for the 1.1 billion people who smoke and those around them".

The link between 'A Better Tomorrow' and BAT is slightly more overt – in addition to the clear anagram, it states that the "multi-year partnership is focused on accelerating its transforming tobacco agenda, at the heart of which is its commitment to providing a portfolio of potentially reduced-risk products (PRRPs), which can deliver a "better tomorrow" for its consumers".

However, questions have been raised about whether these partnerships break advertising rules - particularly within the EU.

Legal position / issues

In the EU, the Tobacco Advertising Directive imposes an EU-wide ban on cross-border tobacco advertising and sponsorship in most media. The AVMS Directive and Council Recommendation 2003/54/EC extend this to television and wider forms of tobacco promotion. From 2016, the Tobacco Products Directive extended the restrictions on tobacco to electronic cigarettes and other 'reduced-risk' products.

The wording of the ban captures any cross-border sponsorship that has the aim or direct or indirect effect of promoting a tobacco (or e-cigarette) product. This begs the question – are these non-tobacco 'initiatives', operated by tobacco companies, caught?

Some think so. The deals have already attracted the attention of Australian regulators ahead of the season opener in Australia (which operates a similar advertising regime to the UK).

The deals also appear to have caught the eye of EU authorities. In a statement to RaceFans, Anca Paduraru, an EU spokesperson for the EU's Health, Food Safety and Energy Union projects confirmed that:

"the Commission continues to closely follow the implementation of the bans of sponsorship and advertising as foreseen by the Tobacco Advertising Directive, also in the context of Formula 1". "Recently, the Commission has been made aware of these recent initiatives by the tobacco industry. They will require further close examination following which the Commission will proceed as necessary."

In an attempt to quell recent controversies surrounding the tie-ups, Philip Morris released a statement emphasising its confidence that it is not in breach of any regulations, whilst McLaren has publicly defended the BAT partnership and has reiterated that it will not be promoting any tobacco products via the deal.

Comment

It remains to be seen whether the European Commission will class Philip Morris and BAT's sponsorship deals with Ferrari and McLaren as lawful manoeuvres. One thing's for sure: with traditional tobacco companies continually diversifying into new markets, the need for greater clarity around the meaning of 'indirect' promotion will only increase.

The outcome of the EU's 'examination' will therefore be watched closely by a large number of stakeholders, including Formula One teams, other potential sponsors (including tobacco and e-cigarette brands), local advertising regulators and anti-smoking activists.  

RPC's Sports team regularly advises clients on sponsorship matters, including partnership agreements, marketing / advertising regulation and the Tobacco and Related Products Regulations. For more information, please contact Stuart Harris (Associate) or your usual RPC contact.