Tobacco industry steps up tactics to reduce impact of display ban
Tobacco manufacturers are offering retailers incentives to promote their products in a bid to mitigate the effects of the advertising ban, a University of Stirling study has found.
The research discovered tobacco companies are offering rewards – such as cash bonuses, iPads and hospitality - to small businesses that attempt to boost sales of their brands.
Twenty-four small independent tobacco retailers in Scotland – including convenience stores, newsagents and petrol stations – were interviewed for the study, which followed the country’s ban on the open display of tobacco in April 2015.
Retailers reported being offered, and accepting, a range of incentives in return for preferential practices. These included retaining a tobacco unit, maintaining stock availability, positioning products to maximise prominence, a push on sales, trialling new stock and particular brand promotions.
Lead author Martine Stead, Deputy Director of the Institute of Social Marketing, said: "The tobacco industry has, for many years, incentivised retailers to stock and sell tobacco, and to display particular brands prominently on their shelves.
“We might have expected that these practices would decline following the ban on open displays because customers can no longer see the products. However, our study suggests that is not the case.
“The tobacco companies rely on retailers even more to promote tobacco, now that displays are covered up. They are still offering them payments and rewards, including substantial lump sums to make verbal recommendations to customers to try a particular brand.”
The study, conducted by the DISPLAY team, a collaboration between the Universities of Stirling, St Andrews and Edinburgh, and ScotCen, follows reports of similar incentive-driven schemes in Australia and Canada, where point-of-sale bans are also in place.
The Scottish team found incentives were often incorporated into existing partnership or loyalty schemes with points redeemable against cash or gifts, including hospitality, iPads and business equipment. Some of the retailers also received a cash bonus for keeping a gantry in their store.
As part of one promotion, retailers were told they would be visited by a mystery shopper who would ask for a rival brand. Retailers who instead recommended another product that the company wished to promote would receive a lump sum as a reward.
Most of the retailers – 17 out of the 24 - were given assistance by tobacco companies before the ban took effect to adapt their gantries to comply with the legislation, which requires tobacco products to be kept out of plain sight in units behind doors or roll down covers.
While the researchers acknowledge that the sample was small, they said it suggested that “the strategies identified in our study are likely to be adopted in other countries with, or planning to implement, a display ban”.
The team acknowledged that using incentives to drive sales within the tobacco industry is not a new phenomenon. However, they found companies are now adapting these practices “to work within the context of the display ban”.
“The rationale for bans on tobacco promotions and displays at point of sale is to reduce the ability of tobacco companies to exploit the retail environment in this way,” they wrote.
“However, this study demonstrates that display bans do not prevent [them] from attempting to exert influence on retailers via their sales reps.”
The team said this influence might be even more critical in the era of plain packaging, introduced in Scotland earlier this year.
The study suggests the practice could be ended by introducing a complete ban on company payments to retailers, reducing the number of shops selling tobacco in any given area, banning sales near schools and offering retailers incentives to stop selling tobacco.
The interviews took place in four Scottish communities in June and July 2015 and over the same period in 2016.
The research paper, Tobacco companies’ use of retailer incentives after a ban on point-of-sale tobacco displays in Scotland, is published in the British Medical Journal’s Tobacco Control journal.
The DISPLAY study is funded by the National Institute for Health Research (NIHR) and is led by Professor Sally Haw, University of Stirling.
Podcast: Martine Stead discusses tobacco companies' use of retailer incentives
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