Tobacco companies are planning to use proposed government restrictions on point-of-purchase advertising to their advantage, by selling advertising space on their retail units.
There are more than 66,000 tobacco display units in stores across the UK. They are owned by tobacco companies and loaned free of charge to retailers.
At the moment, the tobacco companies use the backlit space around the gantries to advertise their brands, but they will know by next week whether the High Court will uphold the Government’s plans to severely curtail this point-of-purchase advertising.
The decision would leave a considerable amount of empty space around the units from January next year, and industry sources say this has attracted interest from companies in the confectionery and tobacco accessories markets.
An industry source says one tobacco company has asked for up to &£50 per month per unit for use of its retail space, which could be worth millions of pounds in collective deals. Imperial Tobacco owns 34,000 of the gantries, Gallaher 27,000, British American Tobacco 3,200 and Philip Morris 2,000.
Although there is widespread pessimism in the tobacco industry about the likelihood of stopping the Government’s plans, Imperial Tobacco is understood to have decided against selling its space and will instead use plain aluminium fronts, or ads for its Rizla brand. A Gallaher spokesman was not available for comment as Marketing Week went to press.
Sources point to similar deals which were forged after the Government restricted tobacco advertising on newsagent awnings during the Nineties. Advertising for brands such as Cadbury’s and Coca-Cola replaced cigarettes.