The battle between health experts and the tobacco industry is finally reaching its endgame with the passage of the Tobacco and Vapes bill designed to make smoking illegal in the UK.
It’s worth taking a look at the history of this conflict for what it tells us about marketing, public health and consumer sovereignty as understood by contemporary free marketeers. Because these arguments will be relitigated as other products with negative societal implications come under regulatory scrutiny.
The BMJ first suggested a link between tobacco and lung cancer nearly three-quarters of a century ago. From the start the connection was bitterly contested by the cigarette industry, that well-known fount of medical wisdom. Then, as the damning evidence mounted and their opposition became untenable, manufacturers didn’t just apologise and pack up and go home. Instead, the argument now became about freedom of choice. The grim publicity about cancer and heart disease meant no-one could be in any doubt about the consequences of lighting up. If, in spite of all this, customers still chose to smoke it had to be an informed decision. This argument was undermined, of course, by the fact that cigarettes were addictive. However, even this painfully obvious truth was publicly denied by Big Tobacco. As late as 1994, for example, the CEOs of the major US tobacco companies were still willing to testify to Congress that nicotine WASN’T addictive. They were pictured with their arms raised on the front pages of the next day’s newspapers swearing on oath to this bare-faced lie. It made them a laughing-stock and led to lawsuits resulting in awards of hundreds of billions of dollars in damages; money they are still paying to mitigate the increased costs of health care caused by their products. As the Attorney General of Mississippi put it: “you caused the health crisis – you pay for it.”
In parallel to lying about the damage to public health, the industry lobbied vigorously against all attempts to restrict the advertising of cigarettes and tobacco products.
In the face of growing calls for regulation, as with its response to the march of science, the marketing industry gave ground grudgingly, incrementally. ASH’s summary of key dates in the history of tobacco advertising regulation to 2020 runs to 55 pages.[1] It is an eye-opening read for a number of reasons. I want to draw attention to three lessons from this history because of what they predict about any future attempts to regulate advertising in the markets we have been discussing.
Firstly, as the deadly consequences of smoking were becoming statistically irrefutable, how could manufacturers possibly justify the billions of pounds they were spending to promote the deadly habit around the world?
The overarching defence put forward in the early years of this debate was ingenious: you see advertising had no effect on overall demand for cigarettes at all! It neither enrolled new smokers nor inspired those who already smoked to smoke more. No, its purpose was merely to exhort existing customers to switch brands. Part of the rationale for this position we’ve met before: it was impossible to establish a causal link between marketing activity and demand as smokers themselves didn’t attribute their choices to anything they’d seen on a bill board or cinema screen.
In time this case fell apart for two reasons. Firstly, as advertising became increasingly restricted, guess what, demand for cigarettes did fall. And secondly, internal files made public through legal action by the state of Mississippi, among others, revealed that manufacturers had actively designed their packaging and logos with a view to making them engaging and memorable to children, precisely in order to enfranchise new generations of customers. (A survey conducted by ASH in 1975 showed that 86% of tobacconists sold cigarettes to children. Throughout this period up to 13% of 11- to 15-year-olds smoked in the UK and their favoured brands precisely mirrored those advertised to adults.) The same sources also revealed, by the way, that tobacco company executives had been aware of the health risks and addictiveness of nicotine for decades. Even while they disavowed all such knowledge to the regulator, parliament and the courts.
So, the second lesson to bear in mind from the history of tobacco regulation is that the companies in question were bad faith actors. What is more this was known to regulators and legislators as they nevertheless continued to take them at their word. It was this asymmetry, between a doggedly ingenuous regulator and devious and cynical industry executives, which helped manufacturers to postpone the inevitable for three-quarters of a century.
Thirdly, as you might expect from such systematically unscrupulous behaviour, cigarette companies weren’t simply sitting by and watching their equity disappear while calls for regulation grew louder. Another way in which they skewed the debate was by financing a range of apparently independent third parties to intervene on their behalf.
We can group these stooges into five categories: pseudo-scientific bodies such as the wonderfully named Health Promotion Research Trust; trade bodies, e.g. The Tobacco Retailers Alliance; fake grassroots movements like The National Smokers Alliance; think tanks and lobby groups such as Forest, and, of course, political parties and individual MPs. On the whole this was done if not entirely in secret, then certainly on the quiet. Although MPs could be called upon in an emergency to break cover and intervene in the house to stall legislation, for example by making spurious amendments to a bill banning tobacco advertising, ensuring it ran out of time and failed to pass.[2]
The net effect of these industrial-scale bribes was to maintain the impression among casual observers that there was a diversity of legitimate opinion on the subject; that it’s not as cut and dried as the health police and ‘nanny-staters’ would have you think. All the while behind this smokescreen the industry could eke out its operations a little longer.
I mentioned the asymmetry between the good intentions of the regulator and the unscrupulousness of industry, but the greater imbalance is one of resources.
The story of the slow death of Big Tobacco is fundamentally an economic one. It is the story of the managers of tobacco brands with billions of pounds of trapped emotional equity being obliged by their fiduciary responsibility to delay the industry’s inevitable decline. In this situation uneconomic behaviour such as investing billions on exorbitant advertising, sponsorship and lobbying campaigns; secretly funding bogus research and grassroots activism; sponsoring right-wing political parties and pursuing hugely expensive and utterly futile lawsuits, makes perfect economic sense.
In a competitive free market, this investment has no purpose, no role, it cannot exist, it has nowhere legitimate to go. Only in an emotion economy can it serve vested interests by skewing the market in their favour.
The wider and even more troubling point is that this financial mismatch and the enormous bureaucracy of misinformation it funds, doesn’t just operate to serve big tobacco. It swings into action to defend Big Oil in the debate over climate change; it leaps to the aid of Big Pharma and the processed-food industry and all the other categories in which brands with dissonant trapped equity have money to burn to stymie the operation of the free market.
A particularly influential department of this bureaucracy is the right-wing media, in part because it is able to pose as disinterested while being, as we’ve seen before, entirely dependant on it for its survival.
I hope there is an unpleasant corner of hell reserved for journalists and commentators who look at the efforts of health experts to discourage consumers from smoking or eating processed foods, in the face of billion-dollar misinformation campaigns, and see in the former an affront to personal liberty.
[1] Key-Dates.pdf (ash.org.uk)
[2] House of Commons Hansard Debates for 13 May 1994 (parliament.uk)