Bringing down the POWERWALL A review of retail tobacco displays SECTION 1 SECTION 2 Janine Paynter Becky Freeman Action on Smoking and Health (ASH) New Zealand Legal Opinion David Collins QC, Lambton Chambers Belinda Hughes Cancer Society of New Zealand Inc.
Bringing down the POWERWALL A review of retail tobacco displays SECTION 1 SECTION 2 Janine Paynter Becky Freeman Legal Opinion David Collins QC, Lambton Chambers Action on Smoking and Health (ASH) New Zealand Belinda Hughes Cancer Society of New Zealand Inc.
All rights reserved. ASH New Zealand 2006 ISBN: ISBN-10: 0-473-11647-2 ISBN-13: 978-0-473-11647-7 Edited by Sneha Paul, ASH Designed by Paradigm Printed by Ideal Print ASH NZ, PO Box 99 126, Newmarket, Auckland, New Zealand ashnz@ash.org.nz
Executive Summary Retail displays of tobacco increase the chances of a young person starting and continuing to smoke and form part of an environment that is not supportive for people who desire to stop smoking (84-90% of people who smoke). Selected evidence that retail displays contribute to uptake and continuation of smoking includes: Australian students shown photos with tobacco displays were more likely than students shown non-tobacco displays to think it would be easier to access cigarettes. This perception increases the risk of smoking. There was significantly more shelf space for cigarettes and more brands that youth smoke in Californian stores where more adolescents shop. Seeing tobacco marketing in stores increases the likelihood that 13-year-olds will experiment with smoking. Even in an environment with complete advertising bans, youths reported exposure to tobacco marketing, inclusive of retail displays, and this was predictive of smoking. Tobacco packaging, prominent behind the cashier, is considered an important marketing tool. Tobacco company investment in retail displays is incongruous with the amount of sales the companies are likely to derive if they have the sole goal of attracting adults to smoke or to maintain brand loyalty. The point-of-sale environment is considered as a tool for increasing sales and prompting impulse buying. Other countries have banned retail displays of tobacco. A ban on retail displays would simplify compliance with the legislation. The current display restriction, in addition to being a successful opportunity to keep advertising, makes compliance difficult and is vulnerable to exploitation. Implementation of a ban on retail displays would involve either a change in the current regulations or a statutory amendment to the current Smoke-free Environments Act 1990. Legal opinion considers a statutory amendment as the most robust process for implementing a ban on retail displays of tobacco. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 3
Acknowledgements The authors would like to thank Lisa Woods and Stephen Hall from Australian Council On Smoking & Health. The section with responses to retailer arguments is based on and in some sections uses a critique written by Lisa Woods (please see footnotes). The authors are also grateful to David Booth, Public Health South, Dunedin for his examples demonstrating difficulties with the current retail display restrictions and how some NZ displays appear not to comply with the intention of the Smoke-free Environments Act. George Thomson and Nick Wilson provided useful reference lists that helped to get the report underway. 4 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
Contents Executive Summary............................................ 3 Acknowledgements........................................................ 4 Introduction SECTION 1........................................ 7 How the industry makes the most of the limited marketing environment.................. 8 Slotting fees, Trade Promotions and Payments for Prime Placement...................... 8 Tobacco company returns for their investment........................................ 9 Why the retail display is advertising................................................ 10 Communicating a brand identity and personality..................................... 10 Repetition.................................................................... 11 Reassurance..................................................................12 The role of the point-of-purchase environment in promoting sales and current market knowledge about its impact................................. 13 How tobacco marketing influences children and adolescents........................... 13 How tobacco marketing deters quitting and contributes to relapse....................... 14 Why the retail display is advertising summary...................................... 15 Current legislation relating to tobacco sales in New Zealand........................... 16 Vending Machines............................................................. 18 The Point-of-Purchase Environment in New Zealand.................................. 18 Current examples of displays and the legislation..................................... 20 The Ministry of Health s Tobacco Display Guidelines.................................. 20 Assessment of a tobacco display in a New Zealand dairy.............................. 21 Assessment of a tobacco display in a New Zealand supermarket....................... 22 Tobacco Display Guidelines Under Review......................................... 24 Another example of tobacco industry creativity...................................... 25 Benefits of Tobacco for Retailers.................................................. 25 Retailer Associations............................................................ 26 International Precedent for Banning Displays........................................ 27 Canada.....................................................................27 Saskatchewan............................................................... 27 Retail experience and compliance implementing the ban in Saskatchewan............... 27 Manitoba..................................................................... 28 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 5
Ontario.................................................................... 28 Ireland.................................................................... 28 Iceland.................................................................... 28 Other Jurisdictions............................................................. 29 Responses to statements by retailers about display bans.............................. 29 No evidence that displays cause smoking.......................................... 29 Imposition of costs and inefficiencies.............................................. 30 Tobacco purchases are planned: Retail displays are not an inducement or enticement to purchase... 31 Under-age sales laws and enforcement are adequate to deter youth smoking.............. 31 Legal to sell, legal to buy........................................................ 32 Tobacco market as a significant contributor to small retailer sales....................... 32 Tobacco as a trigger to other incidental purchases................................... 33 Conclusion: Is a ban on retail displays of tobacco worth fighting for?.................... 33 SECTION 2.................................................. 35 Purpose of opinion.............................................................. 35 Options for implementation of retail ban............................................ 35 Explanation.................................................................... 35 Statutory Amendment.......................................................... 36 Statutory Regulations........................................................... 36 Overseas Experiences........................................................... 37 Canada....................................................................37 Saskatchewan.............................................................. 37 Manitoba.................................................................. 38 Nunavut................................................................... 38 Quebec................................................................... 38 Ontario.................................................................... 38 Summary.................................................................... 38 United Kingdom............................................................... 39 New Zealand Bill of Rights Act 1990................................................ 40 Conclusions.................................................................... 40 References.................................................. 41 6 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
Introduction SECTION 1 Marketing is about attracting customers, keeping customers and encouraging customers to buy more of a particular product or brand. Tobacco marketing is a problem for public health. The addictive nature of tobacco makes maintaining customers relatively easy, however they die prematurely through using tobacco. New tobacco customers are almost always children and adolescents younger than 18 years. Children and adolescents are more vulnerable to marketing of tobacco. Tobacco marketing is based largely on ethereal, emotive imagery and lacks information 1. This style of marketing combined with an immature ability to make informed decisions about using tobacco and its consequences means we do not want children and adolescents exposed to marketing of tobacco. Tobacco marketing also provides false reassurance to people who smoke, so they keep smoking and may in fact smoke more. A key tobacco control strategy is to develop an environment that prompts people to quit and that is fully supportive of people who are trying to stop smoking. Hence there are laws prohibiting advertising of tobacco via the media, billboards and sponsorship. Point-of-sale restrictions currently only limit the number of tobacco packages and cartons on display. The first section of this report discusses the tobacco industry investment in the limited environment it has for promotion of its brands and products. Further discussion illustrates why, despite the limitations, the current point-of-sale environment, specifically packaging and the displays of packaged products, is still an effective environment for tobacco marketing and promotion. The report then covers the current display legislation in New Zealand and describes the point-of-sale environment in New Zealand. Two examples of current displays and problems with compliance are described. This report lists countries that have already implemented bans on retail displays of tobacco with short description of the law and salient issues that have arisen. Retailers and the tobacco industry have consistently opposed bans on retail displays of tobacco. The final section of the report examines the statements and arguments proffered by these business groups and demonstrates why they should not prevent the implementation of good public health policy a ban on retail displays of tobacco. RETAIL DISPLAYS OF TOBACCO 7
How the industry makes the most of the limited marketing environment Slotting fees, Trade Promotions and Payments for Prime Placement Tobacco companies in Canada spend over $300 million on marketing communications and an additional $77 million on listing allowances to retailers. Some of the $300 million is used on other promotional strategies such as controlled circulation magazines, websites, eg. mychoice.ca, events (models are hired to promote products in bars or at outdoor events) and sponsoring c-store and other retail industry associations. However most of these marketing funds are spent on POP (point-of-purchase) displays and signage 2. Tobacco companies in the USA have also increased their funding for the retail environment. In 1987, trade promotions were 33% ($US 856 million) of the promotion budget and increased to 44% ($US 3.54 billion) in 1999 3. A more recent article, quoting data from the Federal Trade Commission, reveals that US tobacco firms spend 85% of their promotional budget on retailers. Convenience retailers in the USA can be paid as much as $US 20,000 per year by cooperating fully with relationship marketing programmes. Retailers receive significantly more money for tobacco than other product categories. 4 Convenience stores in the US are a target for aggressive marketing by tobacco companies 5. Retailers surveyed reported that volume discounts and display allowances were included in contracts they had with the tobacco industry. Clearly marked shelving units and displays placed in prime locations indicate that stores are participating in tobacco company incentives. 5 Considerable investment in the POP environment in Australia also exists. The tobacco industry had a number of trade promotions in the mid-1990s. 6 Tobacco companies also provided display units and assistance with POP marketing. 6 Tobacco company sales representatives assist convenience retailers in a number of ways. 6 They provide information about legal aspects of displays. They develop and provide display units that orient the packets towards the customer such that the brands are immediately obvious. The industry representatives also assist with placement and arrangement of the display in store. All three Australian tobacco manufacturers frequently advertise in retail trade journals. They promise better service and urge retailers to work with their representatives to maximize retailer profits. 6 Within New Zealand there is evidence of similar relationships and contracts between the tobacco industry and retailers. In 1999 a dairy owner showed ASH NZ a contract with Rothmans involving a payment of $1700, which required the owner to ensure an unobstructed display of cigarettes 7. Following bans on POP advertising the display units for tobacco became bigger and changed shape such that the tobacco was pushed forward. 8 Service stations and dairies in New Zealand often have tailored display units for cigarettes that were identified by convenience retailers 5 as indicators that the owner is participating in tobacco industry incentives. In 2005, one New Zealand dairy owner reported receiving more than $10,000 a year from British American Tobacco. 9 The tobacco company also supplies the display cabinet. 8 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
Tobacco company returns for their investment Tobacco companies maintain that retail displays have no impact on non-smokers and youth. According to the tobacco companies the displays are for the benefit of people who smoke they might like to switch brands. However, people who smoke generally don t switch brands. British American Tobacco (BAT) New Zealand s managing director, Peter Henriques says, We have about a 70% loyalty factor, which means when consumers walk into a store and ask for a packet of Dunhill and the store doesn t have them, 70% will walk out and go somewhere else to find them. 10 Other figures given for the people who switch brands are 4% (Canadian industry data) to 14% (US Trade) of people who smoke. 2 An Australian study found less than 1% of people who smoke used the point-of-purchase to inform brand choice 11. So, considering the low numbers of people who change brands and the fact that most cigarette brands are owned by one or two companies there is little to be gained by the considerable investment. British American Tobacco NZ has a 76% market share in New Zealand 12. Gottheil 2 estimates the value of a smoker who switches brand to be $600 per year (this value excludes taxes). The estimated investment per person likely to switch is $1000. This represents a significant ongoing loss unless people who don t normally smoke start smoking. More overseas data indicates that tobacco companies may only have a net change in market share of 1% due to brand switching, again this estimate is not worthwhile given the marketing and promotional investment 13. The chair of a British Advertising Agency has this to say about the money invested in marketing of tobacco, I think arguments like shifting brands are just insulting in their shallowness. There is no other category where you can spend between 70 million pounds and 100 million pounds and not have an effect in protecting or increasing the market. 14 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 9
Why the retail display is advertising Communicating a brand identity and personality The National Alliance of Tobacco Retailers (NATR), Australia submission 15 to the Inquiry into tobacco smoking in New South Wales contends that advertisement does not include the concept display in the Australian legal context. They maintain that the product is not in and of itself an advertisement because the display of the product is passive exposure and advertising is a process that actively motivates the customer to purchase the product. This is a statement that needs careful analysis consider a billboard or an advertisement in a magazine and compare it to the distinct, synergistic rows of colour and brand symbols. How is one image passive and the other active, particularly when the display is three-dimensional as opposed to two-dimensional? Consider further these comments about packaging by the tobacco industry and their consultants. In a future where increasingly the product may have to sell itself through the pack, a fuller understanding of the way in which perception of such packs affects perception of their contents is desirable. 16 The primary job of the package is to create a desire to purchase and try 16. Are we to believe the package is passive when Phillip Morris describes a pack that: projects a distinctive young masculine appearance 16 Or when a Wills marketing manager describes a cigarette display as follows: We ve been pushing retailers to put their cigarettes on the back wall, and we ve had some initiatives where we ve block-stacked our products. Instead of using a gravity-fed overhead dispenser, we ve used a cascade tray to build up a big brand image. That orients the product towards the consumer rather than having it facing the floor so you see more of the packet. The company has also changed the packet colours on one of its major brands Horizon so that it s a uniform blue. The aim of the exercise is instant recognition: along with Benson and Hedges, that s given us full gold and blue blocks on display and that helps our brands stand out 6. 10 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
Marketing literature describes packaging as: A billboard on a highway, except that it must attract more than the attention of the passer-by. It must stop them in their tracks and make the sale 17. The New Zealand definition of tobacco product advertising 18 is any words, whether written, printed or spoken, including on film or other medium, broadcast or telecast, and any pictorial representation, design or device, used to encourage the use or notify the availability or promote the sale of any tobacco product or to promote smoking behaviour. Retail displays of tobacco can credibly be interpreted as a design or device, used to encourage the use or notify the availability or promote the sale of any tobacco product Retail displays boldly and unambiguously notify the availability of tobacco. However, the display of tobacco is an exception by virtue of a separate section of the Smoke-free Environments Act 1990 (the Act), Section 23A: Compliant product display. There is no statement within the Act that retail displays are not advertising. Other definitions of advertising also encompass a retail display, eg. advertising is the business of drawing public attention to goods and services 19. Indeed the Framework Convention on Tobacco Control, which New Zealand has ratified, defines tobacco advertising, as any commercial communication whose main, secondary or incidental aim or effect is to promote a tobacco brand or to promote tobacco use. Direct and indirect tobacco advertising includes but is not limited to sponsorship, promotional activities and/or brand-stretching that makes use of the brand name (alone or in conjunction with any other word), logo, symbol, motto, selling message, recognizable colour or pattern of colours, or any indicia of product identification, identifiable with those used for any brand of tobacco product 20. Repetition Peacock tails are disproportionately large, have repeated designs and luminescent colours. There is no doubt about the purpose of this bird s display. The tail is a call to action from the female, Pick me, pick me, PICK ME. The peacock s display has had a considerable impact beyond the female peahen. Humans have carried peacocks from India and they are ubiquitous with the exception of the Antarctic or Artic circle. Hence, repetitive, colourful displays are very good at encouraging possessive behaviour in humans. Cigarette displays have the same elements; luminescent repeated colour, repeated pattern and a volume and presence larger than that required for satisfying demand. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 11
The retail displays and packages also serve as a point-of-sale link to other tobacco promotions aimed at young people such as music festivals, fashion parades, private parties or dance events. An audit of youth events in Perth, Australia, with a cigarette promotional presence, found that half of the events did not restrict the audience to 18+ years 21. Designs and colours (Fig 1) that are easily linked to the packets are placed on promotional material, decorations or clothes of glamorous sales representatives. The industry is able to build brand images that become associated with fun and popular youth culture 21, 6. Brand images and smoking become associated with happiness, fun and socialising and reminders of this are in every convenience store or petrol outlet where tobacco is displayed. Figure 1. Pictures are a comparison of cigarette packets with promotional materials for dance or music events in Dunedin (Photos courtesy of H. Darling). Reassurance Marketing needs to dispel doubts that consumers have about their purchasing behaviour. In response to growing concerns about the health impacts of smoking, the tobacco companies sought to reassure and thereby maintain customers. One way they have done this is by brand variations that imply a healthier choice, the products are labelled light and mild 22. These lighter designations are supported by package colour changes such as red for full strength, blue for light or mild and white for ultra light. These lighter choices, therefore reassurance, are visible in the retail display. 12 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
The role of the point-of-purchase environment in promoting sales and current market knowledge about its impact Point-of-purchase displays of cigarette packets and cartons within retail settings are currently successful for marketing tobacco with growth in sales (37.2%) recorded to Jan 1, 2006 23. They are considered the industry s most important sphere of influence 24. Advertising of tobacco is banned in New Zealand but there has been considerable investment by the tobacco industry in displays 4, 3, 7, 25 and packages 16 such that they become effective as advertising per se. 26, 27, 28 Any level of marketing exposure is predictive of 29, 30, 31 future smoking expectations. Studies in private sector journals indicate that point-of purchase stimuli, especially vibrant visual images such as those on cigarette packaging, encourage unplanned purchases. 32 One study found four out of five purchase decisions are made while the shopper is in the store. Another study found that 27% of consumers bought unplanned items because of in-store displays. Seventy to eighty percent of decisions are made in the store; so appealing packaging may have considerable influence over purchase patterns. 32 According to the Point-of-Purchase Advertising Institute, New Jersey, USA, 66% of purchase decisions are made in the store and not before entering. 17 How tobacco marketing influences children and adolescents There are a number of factors to consider when examining the impact of marketing on children and adolescents. Firstly, most people (75-90%) start smoking before they are 18 years old 33. There are complex and multiple reasons why children and adolescents start smoking. However, the factors relating to retail displays and advertising need to be highlighted here. Adolescents face developmental challenges that include physical maturation, transition to emotional independence from parents and establishing a coherent sense of self and values to guide behaviour. Experimenting and risk-taking are usually characteristic ways of meeting these challenges 33. Being able to identify and link a brand with personality traits means that if the particular personality trait is desirable, young people who are in the process of discovering and establishing their identity, are vulnerable to feeling or thinking that they need to smoke to convey that message about themselves 34. Cigarettes are described as badge products meaning that the brand image gives the user some of the identity and personality of the brand image 35. This ability to identify brands and link a brand with personality traits is a predictor of smoking 33. Longitudinal studies consistently indicate that adolescents exposed to tobacco advertising and promotions are more likely to smoke. 30 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 13
If we examine the impact of displays and packaging on children we gain more evidence that retail displays should be considered as advertising and as having similar impacts to advertising. A Canadian survey of children from non-smoking households, with limited direct exposure to tobacco products, found that 40% were able to spontaneously name cigarette brands 2. Eighty-five percent of children surveyed were able to recall convenience stores as a place they ve seen cigarettes. Two-thirds of the children surveyed believed children their age might try smoking if they see cigarette displays in convenience stores 2. Students, aged 12-17, in Canada described people who would smoke cigarettes in branded packaging as fun, popular, cool, with it and good-looking 36. Hence, more evidence that the brand colours, designs and packages themselves plus the retail display, comprising packages, are associated with desirable personality traits. In a qualitative study by Beede 28, New Zealand adolescents were able to elicit user personality traits from previously unseen US tobacco packaging and an absence of advertising. Children, including preschoolers, and adolescents are more susceptible to the elements of tobacco displays than adults 32. Preschoolers are able to recollect brand names using visual cues 32. The repetition of pack design and colours within cigarette displays and the frequency of similar displays (every dairy, service station and supermarkets) give the mistaken impression that tobacco use is desirable, prevalent and socially acceptable. 1 It has been reported that retail displays are more prominent in stores proximal to schools and in stores where adolescents shop frequently 37. Overestimation of tobacco use and social acceptability increases the risk that an adolescent will smoke 33. Availability and the perception of availability also contribute to an increased risk of starting to smoke 33. The presence of retail displays of tobacco in many stores where children are allowed to and frequently shop gives a message that is in direct contrast to the underage restriction on tobacco purchase. Retail displays make it clear tobacco is available and that there is lots of it. Australian students shown photos of tobacco displays had better recall of tobacco brands and thought it would be easier to obtain cigarettes than students shown point-of-sale displays with no tobacco. 38 How tobacco marketing deters quitting and contributes to relapse People who smoke often express a desire to quit and have tried to quit. In New Zealand, 84% of people who smoke have tried to quit 39. Ninety percent of Australians who smoke want to stop smoking 40. A physiological addiction to nicotine will often make it difficult to stop smoking. Various marketing stimuli and reassurances also make it difficult for people to stop smoking. The marketing stimuli include respondent conditioning, operant conditioning and vicarious learning. These stimuli are all subtly different but have a similar effect on tobacco purchasing behaviour. The purchasing of tobacco and the symbols associated 14 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
with brands ie. retail displays become associated with positive feelings such as happiness, excitement and satisfaction. They may also confer a feeling of well-being and achievement. This link means purchasing tobacco circumvents processes that weigh up the considerable risk that smoking entails 35. Significantly greater subconscious responses or cravings are stimulated when people who smoke are shown photos of cigarette packages compared to photos without smoking or cigarette imagery 41. While the physiological responses are general, and the response isn t specifically linked with a particular outcome, it does indicate that packages of cigarettes serve as stimuli for action. A concerted, conscious effort is likely to be required in order to change what is usually routine, primarily subconscious, behaviour stimulated by cigarette imagery, eg. cigarette displays. Other examples of routine behaviour are found in some of the actions required to drive a car, it would be difficult to stop knowing how to drive a car unless the car was taken away or not used for a very long time. An additional example is people who change to left hand drive or vice versa. They will often drift back to their normal side of the road or reach down to a gear lever on the wrong side. They will have done this without a conscious decision to do it and usually have a clear knowledge of the risk. Why the retail display is advertising SUMMARY Consider some fundamental elements of advertising in relation to retail displays. One element is creating a brand identity or personality. In a marketing textbook 42, two examples illustrate branding. The first, think about Levi and Warehouse jeans, they are both denim jeans, but they have very different personalities and perceptions associated with them. The jeans, because of their personality, will make a person want to wear them in order to communicate something desirable about themselves. The second, some blind taste tests were conducted using cornflakes. The choice of sample A increased from 47 to 59% when sample A was identified as Kellogg s and sample B left as sample B. Do retail displays and packaging contribute to creating a brand personality? The aforementioned statements by tobacco industry employees and studies described in how marketing influences children and adolescents indicate that they do. Another element is repetition. Pollay describes friendly familiarity as a component of cigarette advertising. Consumers are exposed to brand messages on a frequent and regular basis. This familiarity effect renders the frequently encountered object as benign 1. High levels of repetition enhance attitudes to products particularly when the advertising is simple and rich in imagery (emotive, pictures, shapes & colours) rather than information 43. Retail displays have this friendly familiarity. They are in every supermarket and convenience outlet. The design elements of the package are also repeated in the displays. More repetition is achieved when packaging is linked to other promotional strategies such as dance or music events. Repetition also creates a mistaken impression that many people smoke and that smoking is socially acceptable. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 15
Finally advertising is concerned with reassuring customers that they are making the right choice. For cigarette marketing this means counteracting health concerns that arise for people who smoke. This reassurance is present in the cigarette displays as colour variations denoting lighter or milder versions of a brand. These variations do not lessen the devastating health effects of smoking. There is overwhelming evidence that advertising and promotion increase tobacco consumption and there is sufficient justification for a legislated ban on ALL forms of tobacco advertising and promotion 44. Retail displays are a component of tobacco advertising and promotion. Current legislation relating to tobacco sales in New Zealand Cigarette sales in New Zealand are regulated by the Smoke-free Environments Act 1990, which incorporates amendments made by the Smoke-free Environments Amendment Act 2003. Part two of the Act is the section covering sales, promotion and advertising of tobacco. The purpose of this part is to reduce social approval of tobacco, particularly by young people; by imposing controls on advertising, promotion and marketing, requiring health messages and prohibiting the sale of toy tobacco products to people younger than 18 years. The other purpose of the Act that is relevant to sales is to facilitate harmonization of the laws of New Zealand and Australia relating to labeling of tobacco products. There are a few exceptions but basically no advertising, other than the retail display, is allowed in New Zealand and this includes the point-of-sale. Other exceptions include; price lists for retailers of tobacco (these price lists must have health messages), books, magazines, newspapers, radio and television transmission, films or video printed or made outside New Zealand as long as they are not intended for transmission or distribution primarily in New Zealand. The retailer is allowed to display a list of products and prices available as long as the notice meets the specifications of the Act and does not have a tobacco product logo or the company name. Point-of-sale advertising was ended on 11 December 1998. 16 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
No person may sell tobacco to a person younger than 18 years. There are no restrictions on where or who sells tobacco. Tobacco cannot be exposed for sale unless it meets the requirements in the Smoke-free Environments Act 1990 for a compliant product display and whatever regulations are required. Information about a compliant product display is available on the Internet 45, brochures 46 and the Smoke-free Environments Act 1990 booklet reprinted in Feb 2005. British American Tobacco has also provided information on displays in the C-Store retailer s magazine. 47 There is also a telephone number provided for additional information. A short summary of a compliant product display, based on the Ministry of Health website and the Smoke-free Environments Act 1990 (Reprint 2005) 48, is provided in the blue box section that follows below. Compliant Product Display The display of tobacco products at each point-of-sale is limited to a maximum of 100 packages and 40 cartons, unless the retailer s place of business is a specialist tobacconist. Brand names must not be visible from outside the shop. The following restrictions are also in force: There is a limit of two packages of the same kind (no block displays). The packaging and sale of tobacco products with other products at a single price or a reduced price is prohibited. Tobacco products may not be made available free of charge or with some kind of inducement or reward, or at a reduced rate other than a normal trade discount. Tobacco products may not be displayed on a counter top or similar surface, whether at point-of-sale or not. Tobacco products may not be displayed within one metre of children s products such as confectionery and ice cream, soft drinks, and products that are marketed primarily for children If tobacco products are displayed within two metres of a point-of-sale, a Smoking kills sign must be displayed in clear view of the customer at the point-of-sale (the Ministry of Health supplies free signage) The maximum face size of any displayed tobacco product may not exceed the following dimensions; package 66cm 2, pouch pack 105cm 2, carton 266cm 2. Point-of-sale refers to a checkout, till or cash box, eg. if a store has two tills then the maximum number of cigarettes packages on display may be 200. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 17
The Smoke-free Environments Act 1990 (Clause 28, 1,1A & 2), due to a 1997 amendment, prohibits any inducements to retailers to place tobacco in certain parts of their premises, advertise tobacco or buy tobacco. The retailer is unable to participate in any lottery, contest, game, or receive cash rebates or gifts. The proposed Smoke-Free Environments (Enhanced Protection) Amendment Bill 1999 (the Amendment Bill) prohibited displays of tobacco products. However, the Supplementary Order Paper was also passed in 2003 alongside the Amendment Bill and this muted any ban on retail displays to the current display restrictions. 49 Vending Machines These are most commonly found in bars or clubs. They must be controlled by the bar manager or someone who checks the age of the person wanting to purchase tobacco. The Point-of-Purchase Environment in New Zealand According to British American Tobacco New Zealand there are approximately 8,600 50 businesses that sell tobacco in New Zealand. Places that sell tobacco include supermarkets, dairies, service stations, pubs, specialist tobacconists and some liquor outlets. Point-of-purchase tobacco displays (POP) in New Zealand comprise tailored display cabinets supporting multiple rows of cigarette packets, cartons, cigars, tobacco packets and a small proportion of the display is tobacco related products such as papers and filters for roll-your-own (Figure 2). The shelving for cigarettes often stands out from other shop fittings because it is usually smooth and reflective in contrast to other shop fittings that are dull, painted, scratched metal or wood. Figure 2. Photo of a cigarette display in an Auckland service station showing attractive, bright colours, repetition and a distinctive display cabinet. (Photo courtesy: ASH NZ) 18 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
There is a requirement for cigarettes to be 1m from products that are attractive to children such as chewing gum, chocolates, sweets etc. The displays are usually placed such that they are still in the same line of sight as children s products (Figure 3) making the physical separation irrelevant. The legislation also stipulates that displays should not be visible from outside however many are easily visible from the street or footpath (Figure 4). Figure 3. The bright cigarette packets are viewed very easily with the similarly coloured children s products. (photo courtesy: ASH NZ) Figure 4. Photo showing a tobacco display clearly visible in the window, from the footpath, in a liquor outlet. (photo courtesy: ASH NZ) Further evidence of retail displays, which do not seem to comply with the intention of the Smoke-free Environments Act are described by David Booth in the following section. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 19
Current examples of displays and the legislation The Smoke-free Environments Act states that a retailer of tobacco products must not expose a tobacco product for sale inside the retailer s place of business unless certain requirements are met. In section 23A(2)(b) one of those requirements is as follows: unless the place of business is a tobacconist s shop, not more than 100 tobacco packages are exposed for sale at any point-of-sale. The Act defines the terms exposed for sale and point-of-sale, but does not define what it means to be exposed for sale at a point-of-sale. A standard dictionary definition of the word at denotes the presence of something in or near a specific area or location. Thus to be at a point-of-sale would mean to be in or near the area in which a point-of-sale is located. However, a creative interpretation of the legislation in relation to point-of-sale tobacco displays has resulted in a degree of ambiguity (albeit forced) with respect to what it means to be at a point-of-sale. In cases of actual, perceived, or even forced ambiguity in legislation, the Interpretation Act 1999 needs to come into play. The purpose of the Interpretation Act is to state the principles and rules for the interpretation of legislation, and in section 5(1) it says, [t]he meaning of an enactment must be ascertained from its text and in the light of its purpose. One of the purposes of the Smoke-free Environments Act is to regulate the marketing, advertising, and promotion of tobacco products... This sentiment is repeated in section 21(a)(i) which speaks of reducing the social approval of tobacco use, particularly among young people by...imposing controls on the marketing, advertising, or promotion of tobacco products... The Ministry of Health s Tobacco Display Guidelines In order to ensure the purposes of the Smoke-free Environments Act are realized the Ministry of Health has produced Tobacco Display Guidelines, which will be used below to assess two specific tobacco product displays. In the Guidelines the Ministry considers the purpose of the Act s display restrictions as being to reduce the potential for impulse buying at check-outs and to limit the ability of the tobacco industry to circumvent the tobacco advertising ban, by using the display of packages in a manner akin to advertising. In order to clarify what it means to be at a point-of-sale, the Guidelines say that, the distance between areas of tobacco display must be reasonable and that the area of tobacco display at each point-ofsale (POS) should be separate, and able to be differentiated from another area of tobacco display. The Guidelines offer an example of this requirement, saying a maximum 100 tobacco packages from POS 1 should not be mixed with 50 tobacco packages from POS 2 in the same display unit. 20 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
The first example of a tobacco product display to be assessed in this section in the light of the Act and the Guidelines is found in a New Zealand dairy (Figures 5 and 6) in which there are two points of sale 2 metres apart. There are two cabinets located near POS A, each displaying approximately 93 tobacco packages, making a visual cluster of 186 tobacco packages. Assessment of a tobacco display in a New Zealand dairy Cabinet 1 93 packs Cabinet 2 93 packs Counter POS A Counter POS B Counter Shop/customer area Figure 5. Layout in a New Zealand dairy. POS represents point-of-sale. In terms of this layout and the fact that the two cabinets are in such close proximity to POS A, one would assume that the visual cluster of 186 tobacco packages constitutes one display and is at POS A only. However, the manager of the dairy and the tobacco industry representative who advised him, argue that each cabinet constitutes a separate display, one for each point-of-sale. The Guidelines state that displays must be clearly differentiated from each other, which in this case they are. But the Guidelines also state there must be a reasonable distance between displays, which in this case there is not. In addition, both cabinets are close to POS A, but not POS B. All this suggests that the one visual cluster of tobacco packages, even though divided between two cabinets, is one display of 186 packages. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 21
Such a large visual cluster of tobacco packages runs counter to the purposes of the Act which seeks to impose controls on the marketing, advertising, or promotion of tobacco products... and which, according the Guidelines, is to limit the ability of the tobacco industry to circumvent the tobacco advertising ban, by using the display of packages in a manner akin to advertising. And so, the dairy s tobacco display appears non-compliant when considered in the light of: 1) a common sense interpretation of the word at ; 2) the Ministry s Guidelines; and Figure 6. Photo showing tobacco display in the dairy. (photo courtesy: ASH NZ) 3) the purposes of the Act. Assessment of a tobacco display in a New Zealand supermarket The second example of a tobacco product display to be assessed in this section the light of the Act and the Guidelines is found in a New Zealand supermarket (Figures 7, 8, and 9) in which there is an express lane with three points of sale at 1.5 metres intervals. There are two cabinets located in the same area occupied by two points of sale (POS B and POS C). In these two cabinets there is a combined total of 135 tobacco packets. In addition, there is a round clear Perspex tobacco canister which, while only accessible from POS D (in another lane), adds to the visual cluster of tobacco products shared by POS B and POS C, increasing the number of packets in that cluster from 135 to either 147 or 155 depending on how far the canister s internal device is swivelled. 22 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
POS D Tobacco product display canister (accessed from POS D) Express Lane Either 12 or 20 visible from the express lane 1.3m 54 packs + 45 packs Total 99 packages 36 packages 1.3m POS A 1.3m POS B 1.3m POS C Figure 7. Layout in a New Zealand supermarket. POS represents point-of-sale. Figure 8. Photo of tobacco display in New Zealand supermarket. Figure 9. Photo of points of sale with tobacco display in New Zealand supermarket. BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 23
Because points of sale B and C are located within such close proximity to the tobacco display it would seem that the 135 (or more) packets are at both points of sale. This means that point-of-sale B and pointof-sale C each share a visual cluster of tobacco products that exceeds the maximum of 100 packets permitted by the Act. Exceeding the 100 packet limit in this way could be justified by arguing that because there are two points of sale there can be an upper limit of 200 tobacco packets. However, there is no gap separating any of the 135 tobacco packages from each other, therefore if there is more than one display it is clear that there is no reasonable distance between them. The size of this visual cluster of tobacco packets, along with its proximity to POS A and POS B, seems to run counter to the purposes of the Act which seeks to impose controls on the marketing, advertising, or promotion of tobacco products... and which, according the Guidelines, is to reduce the potential for impulse buying at check-outs and limit the ability of the tobacco industry to circumvent the tobacco advertising ban, by using the display of packages in a manner akin to advertising. And so, as with the dairy, the supermarket s tobacco display appears non-compliant when considered in the light of: 1) a common sense interpretation of the word at ; 2) the Ministry s Guidelines; and 3) the purposes of the Act. Tobacco Display Guidelines Under Review The Ministry s Tobacco Display Guidelines are currently under review and a letter of consultation was sent to selected stakeholders on the 6th April 2006. It is expected that certain modifications will change some of the interpretative details presented here and will also offer a tighter interpretation of the restrictions the Act places on tobacco displays. However, the examples noted here demonstrate the difficulty in policing the current Act because of the way the tobacco industry takes advantage of, or even creates, the slightest ambiguity in legislation in order to maintain compulsive retail environments. 24 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS
Another example of tobacco industry creativity There is a further example of the tobacco industry taking advantage of the weaknesses in the Smokefree Environments Act 1990 (NZ) as it relates to display restrictions and updated regulations in Australia. Repetition of images and colours (several cigarette packs together in a display) attract more attention and create a distorted perception that the product is popular and socially acceptable 1. The more popular and socially acceptable smoking is perceived to be the more likely it will encourage smoking in adolescents. The display restrictions in the New Zealand and Australian legislation aim to prevent this increase in impact by limiting the number of packs displayed to two. However, following the legislation, five popular brands were varied slightly but the packages remained very similar and the result is more than two similar packages are displayed, 51 maintaining the effect of repetition despite the law prevent it. Benefits of Tobacco for Retailers Tobacco sales are 3% of total sales in supermarkets and 38% of total sales in convenience stores in New Zealand. 52 An alliance of tobacco retailers in Australia (National Alliance of Tobacco Retailers NATR) considers that purchase of tobacco products by customers is planned and while the customers are in the store they purchase other products. The NATR submission 53 to the National (Australia) Tobacco Strategy 2004-2009 has two graphs that show people who smoke are more likely to buy all major retail categories than non-smokers. Seventy-one percent of retailers responding to a survey in Western Australia felt that cigarettes and other tobacco products attracted customers. 88% reported that, at least half of the time customers buying cigarettes bought other things. 54 There are similar figures for Canadian convenience store purchases smokers buy more of everything else. 2 According to an UK survey conducted by Imperial Tobacco, 14% of smokers will buy newspapers, 12% milk and 6% bread in conjunction with a tobacco purchase 55. However, there is no way to verify that tobacco is not in fact the incidental purchase, bought when a consumer makes a planned purchase of bread, milk or newspapers. 55 BRINGING DOWN THE POWERWALL: A REVIEW OF RETAIL TOBACCO DISPLAYS 25