British American Tobacco (BAT) -- the third-largest publicly traded tobacco company in the world -- is engaged in an elaborate and ethically questionable online-marketing strategy across Europe and Asia.
A joint Point and Engadget investigation has found that several BAT brands sponsored music events and created entirely new lifestyle brands that initially seem unrelated to cigarettes. But on closer inspection, they are used to raise awareness of cigarette brands in markets where overt tobacco advertisements are forbidden.
Dunhill and Kent cigarettes are among the BAT labels benefitting from spinout brands in South Korea, Romania and Switzerland. However, BAT is not unique in using these tactics in the tobacco industry.
When it comes to advertising its tobacco products, BAT's own international-marketing principles are clear about its ethical approach: "We do not engage in undercover marketing activities which seek to disguise the source of the advertising message, or the fact that it is intended to advertise a tobacco brand." In the same document, BAT also promises only to market its product to adult smokers. Separately, in an article on BAT's website, the tobacco company denies pursuing nonsmokers. "We never set out to encourage people to take up smoking cigarettes, or to smoke more."
However, evidence collected by Point and Engadget and testimony from expert sources challenge BAT's claims.
Two industry insiders -- one is a current marketing expert and the other is a former marketing expert contracted by big tobacco companies -- have revealed to Point and Engadget the intricacies of how they helped BAT promote cigarette brands through the back door.
Both have requested anonymity. Their employers are not mentioned in this story, and only one is directly quoted. The name Mike is used to protect his identity.
Statistics show that despite stringent restrictions on advertising in some markets, tobacco companies are still spending sizable sums on marketing.
In the United States, for example, tobacco companies spent $9.5 billion on advertising and promotion in 2016, according to the 2016 Federal Trade Commission Cigarette and Smokeless Tobacco reports. That's $26 million per day. It's hard to find similar figures for other countries, but our sources say tobacco marketing departments around the world have significant funds at their disposal.
"Marketing budgets don't change, so at the end of the day you still have to spend that," said Mike, who no longer does marketing for cigarette companies. Indirect but connected lifestyle spinout brands are one way to spend that cash, according to both sources -- who have worked on similar campaigns.
One example of this in the European Union is the lifestyle brand Ahead, which is owned by BAT and has been used in conjunction with Kent cigarettes. Ahead participated in a music festival in Bucharest, Romania, called TimeShift 2017 by hosting parties for up to 5,000 guests that featured appearances by major British artists Orbital, Rudimental and Hot Chip. We contacted representatives of each artist and asked if they were aware of Ahead's link to BAT. None replied.
The design firm Minus5 Architects built Ahead's branded music stages and DJ booths for the parties. According to its website, the 2017 event was the third time BAT had organized such a "full party experience" with the Ahead name. Minus5 Architects also explicitly named British American Tobacco Romania as the client for its Ahead work.
A Facebook event for Ahead's stage at TimeShift made no mention of any association with BAT or any link to Kent cigarettes. But that changed inside the venue. Based on videos and photos posted to social media by the partygoers, Kent's logo was prominently displayed onstage.
The trademarks are used by Lorillard Licensing Company, LLC, which is a subsidiary of R.J. Reynolds Tobacco, which in turn is a subsidiary of BAT. The Ahead trademark filing clearly states that Ahead was created with the specific purpose of "Electronic transmission of media or information, text and images over the internet or other communications networks in the subject of art and design, fashion, technology, electronic dance music, entrepreneurship and start-ups."
"The fact that BAT initially obscured the link with its products in no way gets it off the hook."
A 2003 EU directive made it illegal for tobacco companies to sponsor events that involve or take place in more than one member state. Any cross-border effects are also forbidden.
Peter Oliver, a barrister at Monckton Chambers who has acted for the UK tobacco-control charity Action on Smoking and Health (ASH) in the High Court and specializes in EU law, is certain that Ahead's club nights would count as sponsorship.
"The fact that BAT initially obscured the link with its products in no way gets it off the hook," he said.
But the trickier part is figuring out whether the events had any cross-border effects. That's a less clear-cut question to answer. In an age when Facebook posts and Instagram photos are shared globally, it is theoretically possible to argue that the parties hosted by Ahead had a reach beyond the Romanian frontier. But that requires a legal team to prove the facts in a legal setting. Until such a test case is heard, it's not easy to say whether EU rules have been breached, according to Oliver.
We attempted to find the organizers of TimeShift 2017, but the website has not been updated since 2017, the social media pages have not posted since last year, and repeated attempts to contact the organizers went unanswered. There wasn't a TimeShift event scheduled for 2018, but the Ahead brand continues to operate in Romania at a nightclub called Kristal Club, with sponsored parties taking place as recently as November 10th, 2018.
Ahead: The early years
- The Ahead brand has made appearances around the world, starting, as best we can tell, in 2014. The logo has taken many forms, but it often features the broken "E" found in the Kent logo.
- An early example was Ahead Soundlab, a Vietnam initiative focused on electronic music. Featuring top Vietnamese artists, the effort culminated in simultaneous parties in Hanoi and Ho Chi Minh City.
- A series of events titled Ahead Party took place in Kazakhstan throughout 2014 and 2015. Rather than filling the interior with Kent logos, these events featured "brand ambassadors" who wandered the party interacting with guests.
- Ahead has also been operating in Romania since 2014, hosting and sponsoring a variety of events. Curiously, some parties used to be branded Kent Ahead, although more recently the Ahead brand has been used in isolation.
- In 2015, Ahead first linked up with Kristal, a nightclub in Bucharest, Romania, that has appeared on DJ Mag's "top 100 clubs in the world" list several times. Ahead's 2017 showing at the TimeShift festival was in conjunction with Kristal, and the pair still puts on events to this day.
- Advertisements for Kent cigarettes since Ahead started have included the phrases "Step Ahead" and "Be Ahead" together with fonts consistent with the Ahead brand.
While TimeShift appears to be on hiatus, the Ahead marketing strategy rumbles on in Switzerland. A music venue that was constructed for BAT called Residence K, which has more than 13,000 followers on Facebook, holds events, parties and concerts. It follows a similar pattern of not advertising its involvement with Kent cigarettes from the outside, but social media images taken by attendees clearly show the Kent label inside the venue.
A Swiss marketing agency called FS Activation has boasted on its website that it was responsible for creating the Residence K concept. In doing so, it also names Kent as the client, making clear the link between the tobacco company and its spinout brand. FS Activation also posted images of the events with the Kent logo used inside the venue.
By keeping the direct marketing of the Kent brand to the inside of the venue, BAT has managed to stay on the right side of Swiss law, said Pascal Diethelm, president of OxySuisse, an anti-tobacco NGO based in Switzerland. "As long as it's not too visible outside from the public domain, there's complete freedom to do whatever they want," he said.
Many tobacco companies have a large presence in Switzerland through either corporate offices or factories, and they use this presence to lobby through trade organizations, said Diethelm. He also alleged that tobacco companies are so influential in Switzerland that they've become part of the political process.
"Many of the heads of these trade organizations are actually members of Parliament. The tobacco industry in Switzerland enjoys this unique situation where their lobbyists are actually elected members of Parliament," he said.