CAMBODIA’S largest tobacco companies have raised concerns that imminent restrictions on tobacco advertisements will be poorly enforced to the benefit of illegal tobacco traders.
The Kingdom introduced a sub-degree early this year set for an August implementation that banned most forms of advertising of tobacco products, but allowed some point of sales adverts.
The Ministry of Health released a prakas last month setting restrictions on size and number of point of sale advertising.
Kong Sam An, vice chief of tobacco and health at the Ministry of Health’s National Centre for Health Promotion, said last week that a shop would be permitted one advertisement measuring 20 centimetres by 30 centimetres.
“An advertiser can negotiate with the shop seller if they want to advertise at that point of sale, so other cigarette companies cannot advertise their product there. The Ministry of Health allows only one logo or name to be advertised [per shop],” he said.
However, large tobacco companies said the rules are unlikely to be fully enforced, unfairly benefiting illegal traders who do not intend to comply.
British American Tobacco Cambodia, who hold a market share of 40 percent according to a World Health Organisation report last year, and is the maker of cigarette brands such as Ara and 555, confirmed it intends to abide by the restrictions. The firms said it supported the letter and spirit of the February sub-decree's restricting certain forms of advertising.
However, the prakas restricting advertising space to one small advertisement per point of sale may be poorly enforced and benefit illegal operators, it said in a statement to The Post last week. With an estimated 90,000 plus points of sale in Cambodia, which were generally unregistered, “it is highly questionable whether the enforcement of this prakas in practice would even be feasible and/or effective as it causes confusion for the retailer.”
“In an environment where legitimate tobacco companies are restricted and illegal traders operate with no fear of action being taken against them, the legitimate industry will decline and the illegal industry will grow,” it said.
The BAT statement claimed some illicit tobacco traders still do not comply with requirements to have textual health warnings on 30 percent of packaging.
Viniton Group Tobacco Co, Cambodia’s second largest tobacco company according to the WHO report, and maker of brands such as Angkor
Luxury and Crown, also supports restrictions on advertising, but is wary of the disadvantages, according to Administrative Chief Kann Sarun.
“I think it is good for our country, however legal companies like us will lose some benefits compared to companies which do not comply,” he said yesterday.
He added that although the regulations are stricter than expected, they will have little impact on business, provided they are enforced.
This major reduction in advertising opportunities will inevitably result in companies and vendors looking at alternative methods to reach out to customers, according to one expert.
Tobacco companies could start to direct their efforts on “below-the-line marketing activities,” according to regional advertising company A Plus Asia’s Cambodia Manager Tom Willis.
“These might include deployment of ‘promotion girls’ to popular night spots such as beer gardens, night clubs and KTV clubs to pass out samples,” he said.
“Also, one is likely to see a surge in on-premise advertisement in these types of venues, in the form of eye catching light-boxes or posters”
Additionally, Willis expects an increase in brand-related merchandise in order to develop brand loyalty amongst the Kingdom’s growing tobacco consuming population.
The number of tobacco users nationwide increased to 1,993,000 this year, compared with an estimated 1,924,000 users detailed by a similar survey in 2006, according to the National Adult Tobacco Survey of Cambodia, released by the Ministry of Planning’s National Institute of Statistics this month. ADDITIONAL REPORTING BY CHHAY CHANNYDA