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Recruitment before profits

Big Tobacco takes financial loss to gain addicts on campus

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Following a survey released last month rating the University of Calgary's tobacco reduction policy as the worst of 35 Canadian post-secondary institutions, the U of C Students' Union is again under fire for their support of tobacco marketing.

"Tobacco companies [on campuses] are spending as much on tobacco promotions and retailing as they are on tobacco production," said Les Hagen, Executive Director of Action on Smoking and Health, a health charity devoted to tobacco reduction based in Edmonton.

Hagen claims the SU has signed lucrative "point of purchase" agreements with two tobacco companies--Imperial Tobacco and Benson & Hedges. He says the companies are paying the SU back as much money as they are earning through sales--effectively giving their cigarettes away in exchange for attracting new customers.

"This is a highly predatory marketing practice," accused Hagen. "Why does the SU need to defend tobacco sales and marketing on campus?"

SU Vice-President Operations and Finance Greg Clayton defended the SU's arrangements with the tobacco companies.

"It's common practice to sell shelving for cigarettes." said Clayton. "Do people smoke because they see cigarettes displayed in the store, or do they smoke because they're addicted? I don't think cigarettes are an impulse buy."

According to Clayton, the SU received approximately $300,000 gross revenue from tobacco sales in the Stör last year. Of that, $60,000 went to the SU as net revenue, and the remaining $240,000 was paid back to the tobacco companies to cover the cost of the products sold.

As federal and provincial taxes constitute approximately two-thirds of all tobacco costs--in this case $200,000, Hagen argues that only $40,000 profit would have remained of the $300,000 gross revenue for the tobacco companies themselves. Since the SU received a further $100,000 last year from point of purchase agreements and an event sponsored by Benson & Hedges, Hagen's conclusion is that the tobacco companies are selling their cigarettes on campus at a loss.

Clayton noted the SU has since drafted a policy to refuse all tobacco-sponsored events but would not disclose to the Gauntlet whether the portion of the $100,000 which accounted for point of purchase agreements exceeded the $40,000 of tobacco company profit.

"Why doesn't the SU fully disclose the cost breakdown," asked Hagen. "I think this info is highly relative to allow the SU as a whole to make an informed decision whether to continue supporting tobacco promotions on campus. The SU should be bringing all these numbers forward and they must be accountable to their members.

"The industry is effectively giving away cigarettes," said Hagen.

Point of purchase agreements, which lease to each company a portion of the shelf space behind the counter of retail establishments--including the SU-run Stör--are widespread but have become recently controversial. Tobacco-reduction groups claim the so-called "power walls" of cigarettes behind the counter are no different than paid advertising.

"For us POP promotions are any product placement," said Yvette Biggs, coordinator of the Smoke-Free U of C sub-committee. "Cigarette display cases are a form of marketing."

Hagen's complaint against the SU originated in a Smoke-Free U of C sub-committee meeting in which Clayton disclosed to the committee the SU's net tobacco revenue from last year.

Clayton believes eliminating tobacco displays would be an ineffective method of reducing tobacco use, and could be perceived as an overreach of SU power.

"We're not censors," he said. "We live in a liberal environment here at the university. The SU is in no position to decide what people can consume or not. If we're going to provide the choice [to buy tobacco], why would we not get paid for it? I believe [point of purchase promotions] convince people to change brands, not start smoking."

Tobacco is the only product which kills half of all its customers, commented Hagen.

"That's the oldest tobacco industry lie," he said. "They've made a conscious decision to sell and promote the leading avoidable cause of premature death in Canada. They're targeting students to replace customers who have died from tobacco products or quit using them."

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