20 OCTOBER 1998

At the outset, I would like to stress that I make this submission in my personal capacity, as an individual with 12 years experience in sponsorship marketing and management both in South Africa and abroad. I must declare a vested interest in the proposed bill given my responsibility to manage a portfolio of sponsorship activities for both tobacco and non-tobacco companies, however my motivation in making a submission today is as a citizen concerned that the proposed legislation is inappropriate at this time given South Africa's status as an emerging nation nor truly reflective of other more mature economies that have wrestled with the matter of how to find a balance between the introduction of tobacco controls in advertising and sponsorship, and economic reality. That some form of regulation is required does not appear to be in dispute but rather the basis on which such regulation takes effect.

My specific interest is that of sponsorship and I believe it both relevant and interesting to reflect on the manner in which sponsorship activities are currently managed in South Africa and then to consider and review the basis on which regulatory proceedings have been introduced by the European Commission.

Firstly, lets examine the status quo in our own country. For a considerable period of time, tobacco manufacturers involved in sponsorship of entertainment, sport and the arts (amongst other disciplines) have not in any way associated tobacco product or packaging with such sponsorship activity. Rather, trade names alone have been utilised in the promotion of sponsored events without any direct product involvement or exposure. This is compelling evidence that tobacco companies themselves except censorship and regulation within reasonable parameters. In a country striving for economic growth and badly in need of investment, what then would constitute reasonable parameters? At this point it is worth considering what has transpired in Europe. Firstly, it is worth noting that the Directive on Tobacco Advertising failed to achieve a qualified majority from 1992-1997 from members of the European Union (EU). So for 5 years the matter was debated until finally being adopted, the sort of debate one would expect in a mature democracy with reference to such a controversial example of government intervention in the field of commercial communications. In preparing this submission and given my limited knowledge on this matter, I was interested to learn from information published on the Internet that Member States of the EU must transpose the Directive within 3 years after it was officially published. Thereafter, application of the Directive may be delayed for a further 2 years in respect of sponsorship, with Member States being permitted to authorise existing sponsorships of events or activities organised at world level for a further period of three years, ending not later than 1 October 2006.

The relevance of the above information is in my opinion two-fold. Clearly, the contractual commitments existing between sponsors and promoters/sponsorship recipients are being recognised and respected and managed in a responsible manner. Even in mature economies it is recognised that the replacement of tobacco sponsors will take time. Additionally, an earn out period of realistic proportion has been specified whilst recognising that sponsorship activities undertaken by tobacco companies whilst not being product specific, require the opportunity to be brand name specific and supported by event advertising until the actual sponsorship activity is curtailed. Sponsorship spend requires a return together with the ability for sponsors and promoters to support such sponsorship with event advertising. Whilst the ultimate demise of tobacco sponsorship is seemingly inevitable, I believe time is required.

The tobacco industry (and shortly I am sure others) is currently targeted with draconian restrictions on sponsorship activities. As we have heard over the past two days, the business, arts and sports communities see this as an unwelcome trend which will eventually end in the decline in the overall level of private sector involvement in sponsorship.

There have been suggestions by the honourable Minister Zuma that government will step in to fill the vacuum that would be created by tobacco sponsors forced out of sponsorship activities by legislation. However, with the prudent fiscal discipline being imposed by the honourable Minister of Finance and the numerous government portfolio's desperately challenging for limited governmental funds, I find this suggestion unrealistic and improbable. In fact I respectfully challenge this Portfolio Committee to clarify these suggestions!

What is required, specifically with regard to the regulation of sponsorship activities by tobacco companies is a period of grace in which existing sponsorship agreements are respected and during which time alternative sources of funding can be secured by the sponsoree bodies. What constitutes a reasonable time period? I believe we need look no further than the EU allowing between 3 to 8 years, dependant on the sponsorship in question, with such continued sponsorship activity being supported by event specific advertising whilst the core sponsorship remains in existence. I appeal to this Portfolio Committee to allow time for an effective transition period which would in my opinion greatly reduce the negative socio-economic impact that will be experienced in the absence of such a transition period.

There is no doubt as to the determination displayed by The Minister of Health in seeking the adoption of the proposed Tobacco Control Amendments Bill in record time. I believe these tenacious efforts to be somewhat misdirected. On a lighter note, given the enormous array of more pressing matters facing our beautiful country, perhaps I could seek support in proposing the honourable Minister Zuma to a new post in government dealing with crime prevention and education, two critical issues that will greatly influence the future of our beloved country.