Chapter 30, Part 2

By Frank Tursi, Susan E. White and Steve McQuilkin
JOURNAL REPORTERS
© 1999 Winston-Salem Journal

It wasn't just adult smokers who were making the switch to Camel.

Children were as well.

The Coalition on Smoking or Health said in 1992 that Camel's share of the under-18 market had increased from less than 1 percent in 1988 to 33 percent. The Centers for Disease Control's figures showed a less dramatic but still significant increase in Camel's share in this group, from 8.1 percent in 1989 to 13.3 percent in 1993.

The R.J. Reynolds Tobacco Co. was once the largest cigarette company in the United States with a powerhouse of best-selling brands: Winston, Salem and Camel. But times changed, and as the case against smoking became more pronounced in the 1960s, RJR failed to adapt to the marketplace. Its rivals would eventually rush past it, and RJR's efforts to catch up would have a profound impact on the company and the cigarette industry.

From RJR's perspective, this is a market that it says it has no control over and insists that it doesn't want. The funny, hip ads with Joe Camel were carefully screened and targeted at young adults, not children, the company said. Ads that looked too appealing to youth were tossed aside.

''Every time some kid lights a cigarette, we are accused of having tried to get him or her to start smoking,'' said Jim Johnston, a former chief executive of Reynolds Tobacco. ''Kids have become an emotional pawn of our opponents, and the more they use that, the more threatened my ability is to market to adult smokers. . . . If we did something so stupid as to advertise deliberately to kids, then I have threatened my ability to market to adults.''

Johnston said that advertising doesn't make children start smoking. And those who do get their cues on what brands to smoke from big brothers, older cousins and other role models. Most often the first cigarettes they smoke are stolen from a relative's pack, he said. In other words, Camel's success with underage smokers was just an unfortunate side effect of its success with legal, young-adult smokers. (Johnston footnote)

''What am I going to do, tone down my advertising?'' asked Peter Hoult, a former president of RJR's Canadian division. ''If it's directed at 21- to 25-year-olds, I'm going to suffer there. I can't do anything about it. I'm delighted for the sale. I wish those kids wouldn't smoke -- I really do. But if they're going to smoke, they'd better smoke mine. But I don't do anything to ensure it happens.''

Mickey and Joe

The medical profession had once enjoyed a cozy relationship with Camel. In its glory days of the the 1940s and early 1950s, Camel had been advertised as the brand more doctors smoked. Those friendlier times had passed years earlier, and on Dec. 11, 1991, the Journal of the American Medical Association closed the door for good.

The prestigious magazine published a series of articles aimed squarely at Joe Camel. The first, done by researchers in Chapel Hill and Augusta, Ga., reported that 51.1 percent of children ages 3-6 knew Joe Camel sold cigarettes. For 6-year-olds, it was close to 90 percent, slightly less than the logo for the Disney Channel. ''While cigarette companies claim that they do not intend to market to children, their intentions are irrelevant if advertising affects what children know,'' the authors wrote.

It got worse. The second article, entitled ''RJR Nabisco's Cartoon Camel Promotes Camel Cigarettes to Children,'' reported that high-school students were more likely than adults to recognize Joe Camel and find him appealing.

''This confirms that Old Joe cartoon advertisements are more effective at communicating product and brand-name information to children than to adults,'' read the article, whose lead author was Dr. Joseph DiFranza, a Massachusetts physician.

Reynolds had an inkling about the cartoon camel's allure to children. RJR's marketing department did some focus groups among young-adult smokers in late 1984 or early 1985 as part of its efforts to make Camel more appealing to this target group. The participants liked the ''French Camel'' theme, but there was a caveat, according to a report from the marketing department. ''The main drawbacks of these executions were that: one, they may be more appealing to an even younger age group, and two, there is some confusion as the meaning behind them.''

The JAMA articles caused a furor. By March 1992, U.S. Surgeon General Antonia Novello, along with the American Medical Association, called for stores and magazines to boycott Joe Camel ads and displays and for Reynolds to find a new campaign. The Coalition on Smoking or Health asked the Federal Trade Commission to investigate. A study that month from the Centers for Disease Control noted that the three brands preferred by smokers ages 12-18 were among the most heavily advertised: Marlboro, Newport and Camel.

''You have the industry saying: `Kids don't pay attention to this stuff; it's only directed at adults,' '' said Donald Shopland, the coordinator for the National Cancer Institute's smoking and tobacco control program. ''But the brands that children are buying do show that they pay attention.'' (Wall Street Journal footnote)

Even Advertising Age weighed in against Reynolds. In an editorial on Jan. 13, 1992, it wrote: ''RJR is wrong, and is courting disaster with these ads. While we join RJR's skepticism about the JAMA studies' statistics, the company has crossed the divider between its legal right to advertise and its unique social responsibility to the general public. Many other campaigns for cigarettes try to position smoking as glamorous, sexy and hip. Most feature adult models in adult settings. But the Old Joe ads are decidedly different. Sprightly cartoon ads like the ones featuring Old Joe may appeal to young adults but, unfortunately, they also attract children's attention; as a result, Old Joe subtly encourages youngsters to smoke.''

This wasn't the first time Reynolds' marketing practices had come under fire.

In early 1990, it would halt development of Dakota, a Marlboro clone that according to early marketing reports was partly aimed at poorly educated, blue-collar women. At roughly the same time, RJR had to stop test-marketing Uptown, a menthol brand aimed at black smokers.

In both cases, RJR officials complained that they were just doing what other consumer-product companies do: developing products to meet the needs of their customers.

The Uptown debacle was the culmination of years spent trying to fix problems with Salem, which was lagging in its appeal to black smokers, the heaviest buyers of menthols. Salem was too often seen as the white person's menthol, while Kool and Newport were more targeted to blacks. In the early 1970s, RJR had tried to help the brand by cutting a deal with publishers of black-owned newspapers. The publishers got $2 million a year in advertising, said Marshall B. Bass. A former senior vice president of RJR Nabisco, Bass was a Reynolds human-resources executive at the time and the highest-ranking black at the company. Also at the meeting were Charlie Wade, RJR's head of public relations, and chairman Alex Galloway.

After the deal was agreed to, John Sengstacke, the publisher of The Chicago Defender, had reached into his pocket, taken out a pack of Kools and crushed them. He then reached for a Salem, lit it and blew the smoke in Wade's face. ''Oh, this tastes good,'' he said.

RJR's money would buy other privileges in the black community, just as it did in Washington and Raleigh. It bought silence on smoking and health. Bass cultivated close ties with the National Medical Association, the trade group for black doctors. The company gave scholarships to historically black universities and medical schools. ''We were letting the doctors know of our corporate citizenship role, which was real,'' said Bass. ''I don't think we ever said to anyone of them anything about smoking and health.'' It was implicit. ''They got the message,'' said Bass. ''They got it.''

RJR's challenge was to build its brands among black smokers without alienating existing customers. It was a difficult line to walk, and RJR sometimes shot itself in the foot. First came Brookwood, a new menthol that was pitched as having outdoorsy freshness. The ads showed black men fly fishing, and the brand went nowhere. RJR would run Salem billboards in predominantly black neighborhoods but use white models in the spots. That led Jerry Long to utter this mandate at a 1980 national sales meeting: ''You're not going to see any more honkies on billboards in Harlem.''

By the time Uptown was about to be test-marketed in Philadelphia, the politics of smoking and race had gotten much more complicated. RJR was just doing what Brown & Williamson had done with Kool and Lorillard had done with Newport -- actively courting smokers who preferred a certain style of cigarette -- but it was too overt, and civil-rights and religious leaders raised a stink. Uptown was dead, another casualty in the increasingly public war over how cigarette companies sold their smokes.

Playing Hardball

Janet Mangini was a family-law attorney in San Francisco when the JAMA studies came out. She believed that RJR was violating California's law against unfair business practices by targeting underage smokers and filed a lawsuit. The case would wind its way through the state's court system before the California Supreme Court let her pursue her claim. After that decision, Mangini would be joined by 11 California counties and the cities of Los Angeles, San Jose and San Francisco. Unlike previous tobacco lawsuits, this one would reach into the heart of RJR's filing cabinets for an unvarnished look at a cigarette company's marketing tactics. It would ultimately provide a road map for the industry's critics and have devastating legal repercussions.

Through the Joe Camel tumult, Reynolds was defiant and unremorseful. The controversy even appeared to be helping Camel's sales, giving the brand a more rebellious image and boosting sales.

As part of its defense in the Mangini lawsuit, Reynolds turned its attention to the JAMA studies that had started the ball rolling. In an unusual move that drew criticism from the scientific community, the company subpoenaed DiFranza's files, then turned them over to the Winston-Salem Journal. The newspaper's articles questioned DiFranza's research methods and objectivity, citing a letter he wrote to colleagues that read in part, ''I have an idea for a project that will give us a couple of smoking guns to bring to the national media.''

Later RJR would commission its own research on logo recognition. It found that Joe Camel's recognition was similar to Tony the Tiger and Ronald McDonald. But it also noted that most of the children surveyed didn't like cigarettes.

Reynolds would settle with Mangini and the California municipalities in 1997, agreeing to pay $10 million and retire Joe Camel, something it said it had planned to do anyway.

Left out of the debate was the answer to this question: Did Joe Camel make more children smoke or just make them smoke different brands? Based on data from the Centers for Disease Control, smoking rates among high-school seniors dropped from 29.4 percent in 1987 to 27.8 percent in 1993 (It has since climbed to 35.1 percent.). This information wouldn't reach the battle until much later, and by then the public had made up its mind.

That shouldn't have surprised RJR officials. A similar incident had happened in Canada a few years earlier when the company launched a new version of Tempo. The packaging and advertisements were psychedelic. The models wore aviator glasses and jeans and sported a look somewhere between disco and punk.

''There was no doubt to whom this was directed,'' said Hoult. ''Twenty-one, maximum 24, it was as narrow as that.''

RJR was accused of targeting a much younger group. The company's denials didn't matter. ''The social pressure, the media pressure, was so great, that we had to withdraw the brand,'' Hoult said.

The Federal Trade Commission would launch two investigation into Joe Camel in 1993 and in 1997. Both complaints would be dismissed.

The first - and more substantial - complaint was halted June 7, 1994, with the five commissioners voting 3-2 to stop the inquiry and go against the recommendation of the FTC staff. In explaining their vote to halt the proceedings, commissioners Mary Azcuenaga, Deborah Owen and Roscoe Starek said in a statement: ''Although it may seem intuitive to some that the Joe Camel advertising campaign would lead more children to smoke or lead children to smoke more, the evidence to support that intuition is not there.''

Commissioner Dennis Yao had a different take. He wrote: ''I have reason to believe that (the) use of a cartoon character, Joe Camel, as the centerpiece of a cigarette advertising and marketing campaign, has increased the consumption of cigarettes among those least able to understand the heavy costs involved in smoking: minors under 18. By refusing to bring such a case, the majority has implicitly downplayed strong circumstantial evidence of an effect on minors, evidence that I believe warrants full fact-finding in an administrative trial.''

The FTC's decision was a huge victory for Reynolds. It had beaten back government regulators and earned the right to sell cigarettes the way it wanted to and needed to. Joe Camel wasn't going anywhere -- at least not yet. But the battle over the tobacco industry's marketing tactics wasn't over. In fact, it was just beginning.

• Coming Sunday: Rushing the Mountain