Sneaky tobacco companies use mystery shoppers to exploit ciggie loophole

And while advertising bans and plain packaging laws have hit their profits, tobacco companies have found a sneaky legal loophole around them. Photo / 123RF

Tobacco companies are offering gift cards, flights and hotel stays to retailers to try and encourage them to push their brand onto customers.

With the battle for Australia's A$2.6 billion tobacco industry fiercer than ever, manufacturers are fighting to lure the nation's dwindling number of smokers.

And while advertising bans and plain packaging laws have hit their profits, tobacco companies have found a sneaky legal loophole around them.

Marketing reps are sent to hotels, supermarkets, petrol stations, tobacconists and newsagents to train sales assistants in how to promote their brands to customers.

If they do as they are instructed, staff can win points and prizes such as gift cards, flights, hotel stays and vouchers for spa and beauty packages.

That's where mystery shoppers come in: they keep tabs on staff, awarding points to those who recommend one cigarette brand over another.

It's called "trade marketing", and is one of the only legal ways cigarette makers can promote their wares under the highly restrictive regime that governs the sale and use of tobacco.

Health advocates say the scheme threatens to undermine the government's plan to slash the rate of smoking to 10 per cent of the population by 2018.

But the loophole may soon be closed, with NSW Health Minister Jillian Skinner vowing to clamp down on the practice after being contacted by news.com.au.

'WHAT WOULD YOU RECOMMEND?'

Mystery shoppers hired by Imperial Tobacco are sent to retailers with a very specific script.

"I normally smoke Winfield 30s but I am looking for an alternative, what would you recommend instead of Winfield 30s?" the shoppers are instructed to ask, in a job summary seen by news.com.au.

When asked how much they want to spend, the mystery shopper says "maybe something a little cheaper".

If asked about their preferred cigarette's strength, the shopper replies: "I usually smoke the blue ones."

Then it's over to the staff member who says the magic words and steers the "customer" towards John Player Special, a brand imported by Imperial. If the staff member does not mention any other brand, they score points towards the company's incentive program.

At this point, the mystery shopper identifies him or herself and informs the staff member that the results will be tallied at head office and prizes awarded to those with the top scores.

'PUSHING THE ENVELOPE'

Scott Walsberger, the head of tobacco control and prevention at Cancer Council NSW, said mystery shopping was central to tobacco companies' marketing strategies.

"Trade marketing as they call it is a significant part of their work," Mr Walsberger said, adding that building relationships with retailers was one of the only legal methods to promote cigarettes after successive law reforms.

He said tobacco companies were desperate to make their products attractive to consumers after being banned from advertising in print and on television, and having the distinctive imagery and colour in their packaging replaced with drab, dark brown.

"Every time we've brought in legislation, you see the tobacco industry push the envelope, continually trying to make their product attractive and market them as much as possible," he said.

"They're always focused on selling more cigarettes, more people getting addicted and they go to all lengths to do that - so it's not surprising that, as we tighten up regulations of how they market their products in some ways, that they've sought out the channels where they're not regulated and exploit them to continue to promote their product."

Newly made cigarettes lie in a tray ready for packaging at Imperial Tobacco. Photo / Hagen Hopkins

He called for new laws to better regulate how tobacco products are sold and marketed and made available through retail outlets, and rejected the argument that trade marketing only targeted customers who were already smokers.

"They say they're not marketing to new customers, just getting people to switch brands or building brand loyalty; we know that's not true," Mr Walsberger said.

"Two out of every three smokers will die from their smoking habit. If that's your consumer base, your target audience and you're losing two out of every three of those, you need to be recruiting new smokers. So that has to be a key part of their marketing strategy."

MINISTER PROMISES REFORM

Health Minister Jillian Skinner vowed to crack down on the mystery shopping scheme after being contacted by news.com.au.

"The NSW Government will seek to amend the Public Health (Tobacco) Act 2008 with the intention of tightening the law to prohibit this practice," Ms Skinner said. "I am proud of this government's record in reducing smoking in this state."

A spokesman for Imperial Tobacco Australia said the company sold a legal product and defended its trade marketing practices.

"We work with a range of retail partners to have adult consumers of tobacco products choose our brands - including Peter Stuyvesant and JPS - over those of our competitors," the spokesman said.

"The program in question sees shoppers specifically identifying themselves as adult consumers of tobacco products who are seeking a brand recommendation from a retailer.

"This clearly neither 'circumvents legislation' nor has any bearing on the choice of an adult to consume tobacco. It simply addresses which brand that adult consumer might choose."

He said "anti-tobacco zealots" should look at the billion-dollar illicit tobacco trade and "focus their attention on serious problems rather than attempting to undermine legitimate and legal competition for no apparent purpose".