OCTOBER 22, 2003
Marlboro to be the sponsor of Chinese GP?
The focus on the issue of tobacco in China has brought to light rumors that a deal is already in place for the 2004 Chinese GP to be sponsored by Marlboro.
Marlboro was the backer of the international GT races at Zhuhai in 1996 and 1997 despite the fact that anti-tobacco regulations were introduced in China in February 1995 it is the most recognized tobacco brand in China, beating all 36 of the domestic cigarette brands and BAT's popular 555.
Smoking is deeply ingrained in Chinese culture with 70% of Chinese men being smokers. Marlboro's domination of the market was built up before the 1995 advertising ban took effect, despite stringent restrictions on imported foreign cigarettes. The demand created has resulted in major problems with smugglers, which may be eased when China gets rid of its trade barriers in the years ahead.
Tobacco remains a huge earner for the Chinese authorities with $10.5bn in taxes generated in the first six months of this year. The tobacco ban has stopped a lot of promotional activity but local tobacco brands, worried about the effect of competition when the markets do open up, have been devising ingenious new ways to promote their products. A few days ago in Kunming the local authority granted the Honghe cigarette factory the naming rights to an impressive new bridge on the Kunming-Bangkok Highway for the next 30 years. The company will also be allowed advertising on the bridge for three years. The $750,000 raised in the auction for the rights will be used for more highway construction.
Other companies have started opening chains of shops to increase their visibility while the Hongta company has been active in sponsoring unusual events such as the a recent mountain climbing competition to conquer the 5395m Mount Haba in Yunnan Province.
In August Hongta also paid $1.2m to get Real Madrid to hold a training session in Kunming and take part in a match with an all-star team in Beijing. The week-long tour was a huge success with Chinese fans wowed by Zinedine Zidane, Ronaldo, Luis Figo and David Beckham. This was allowed because it was ruled to be corporate promotion rather than tobacco sponsorship.
And last month the China Football Association approved a change in the name of the Xiamen Football Club to allow the team to promote the Jixiang Shishi tobacco brand.
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