Cigarette Companies Faced with Rebranding Products August 22, 2006
News Summary
The Wall Street Journal reported Aug. 21 that the decision requires the industry to cease using terms like "light" and "low-tar" to describe cigarettes. Barring a reversal on appeal, companies like Philip Morris USA will have to abandon brands like Marlboro Lights and Ultra Lights in favor of names like Marlboro Gold and Marlboro Silver, already in use in Europe.
"It's a Herculean task," says Rita Rodriguez, CEO of branding consultant Enterprise IG US.
U.S. District Court Judge Gladys Kessler said the changes must be made by Jan. 1, 2007, and she slammed the tobacco companies, saying they had "employed highly sophisticated and expensive promotional campaigns to portray light and low-tar cigarettes as less harmful than full-flavor cigarettes in order to keep smokers from quitting."
"Light" and "low-tar" cigarettes accounted for 84.9 percent of all U.S. cigarette sales in 2003, up from 60.5 percent in 1991.
Convenience-store general manager Andrea Baker said the ruling "will have an impact on our light cigarette sales. There's no doubt about it. When it comes to tobacco sales, it is 99 percent perception and 1 percent product. Some consumers will go on to smoke the same light cigarettes even by a new name such as Marlboro Gold, but a significant number of them will suspect the cigarette has been altered with in some way, shape or form."
But while some observers say that the new rules could hurt cigarette sales, others say that tobacco companies have already successfully weathered similar bans overseas. "I see little reason for the outcome to be any different in the U.S. if Judge Kessler's ruling is upheld," said Michael Schaefer of the research firm Euromonitor International. "Marlboro packaging, for instance, is already neatly color-coded-red for regular, gold for lights, silver for ultra-lights, green for menthol -- and there's no shortage of other ways for cigarette manufacturers to continue to differentiate their sub-brands."
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