Formula 1's sponsorship challenges

Back in February 2005, at the height of the controversy over Formula 1's nicotine addiction, this column published a two-part history of tobacco sponsorship - available here and here to subscribers.

It feared that the outright banning of cigarette liveries was but the tip of an iceberg, and that international and government agencies would soon turn their sights to other substances, concluding:

Another certainty is that the governmental nannies will not stop with tobacco. In 1997, [World Health Organisation] published its 'hit-list' of product categories it was targeting the marketing of. First, and rapidly banned, was the marketing of breast milk substitutes, but this banning came and went without fanfare, for how many sports marketed the products?

Then came tobacco and, as has been illustrated, it is only a (short term) matter before [a total ban] comes to pass. Next up will come alcohol (as McLaren, which phased out West [cigarettes] in favour of Johnnie Walker [whisky], is discovering), then fast 'junk' foods, followed by sweets and confectionary. It is, however, the final product on the list that most alarms: 'power advertising', as WHO terms it.

Legislation controlling tobacco and nicotine now prevails in most developed countries, although such laws are conspicuous by their absence in certain African states, while many Asian and former USSR countries have lax laws, if at all. However, around 80 per cent of the world's governments currently impose tobacco control, albeit to varying degrees, while in some states the prescribed guidelines are flaunted.

It was no surprise to see Marlboro livery plastered all over Monaco during the grand prix weekend, for the principality permits advertising of tobacco products at point of sale. With a plethora of Marlboro kiosks sprouting up in all corners of the tiny state (area 0.78 square miles), it seemed Prince Albert's entire backyard was a smoker's paradise. Indeed, race-goers could be forgiven for believing Marlboro was the event's title sponsor...

A Marlboro insider was at pains to explain that the company complied entirely with prevailing legislation, and that "we usually do less than the law actually allows".

It is no secret that Philip Morris - owner of the brand - and Scuderia Ferrari enjoy a close commercial partnership, with Maurizio Arrivabene, Marlboro vice-chairman for global communication and promotions, sitting on the Formula 1 Commission at the behest of FOM CEO Bernie Ecclestone.

Indeed, in Monaco Ferrari's incoming sporting boss Marco Mattiacci spoke glowingly about the relationship during the FIA's Thursday media conference, saying: "It is a partnership that has lasted many years. It is crucial, it is fundamental to attract sponsors in F1 because this definitely means more financial support for all the teams, at the same time getting integrated and connected with different areas and different audiences that probably F1 doesn't reach today. So it's more than welcome to work more deeply on that level."

Williams carried Winfield branding during the late 1990s © LAT

The contract between Ferrari and Marlboro runs through to 2015 and is unlikely to be extended due to increasing restrictions.

In the main the brand uses its relationship with F1's iconic team for HORECA (hotels, restaurants and catering) relationship-building, VVIP hospitality and exclusive access to Maranello.

Although the value pre-tobacco bans was estimated to be worth around $100 million a year to the Scuderia, it's now believed to contribute around half that to Ferrari's coffers.

Still, most team principals would pledge their grandmother's life for a quarter of that.

However, one of the more remarkable aspects of WHO's 1990s campaign was the sudden increase in tobacco sponsorship of various motorsports, including, of course, F1 the moment the Geneva-based United Nations agency turned its spotlight on nicotine.

As established marketing platforms closed for tobacco brands, so they shifted their adspends to non-traditional activities, particularly those with glamorous or 'macho' images.

For example, West appeared on McLaren, prompting Silver Arrows-esque livery, while Jordan simultaneously picked up B&H, and Williams ran Winfield branding after dominating the sport between 1994 and 1997 under Rothmans colours - having previously campaigned under Camel.

It can be no coincidence that Marlboro devised its winter Wrooom event in the early '90s, at a time when it sponsored both Ferrari and McLaren. British American Tobacco went the whole hog, not only reintroducing Lucky Strike to the sport and debuting 555 in F1, but did so via a wholly owned team based on the remnants of Tyrrell. BAR begat Honda which spawned Brawn, which is today Mercedes, but BAR is best forgotten for its kitschy 1999 zipper livery.

Now that WHO has effectively outlawed tobacco advertising, the health agency (and do-good politicians across the globe) has moved onto the next product category, namely alcohol. For example, Russia already prohibits advertising of alcohol products in print, and on radio, television and billboards, while other countries enact bans of varying effectiveness.

France, one of the first countries to enact bans on tobacco sponsorship/advertising under its Loi Evin - more of which in the linked features - uses the same provisions for bans on alcohol marketing, while the European Commission plans to unveil strategies to prevent alcohol abuse.

Saliently, Article 15 of the EU directive on television advertising includes the following restrictions:

[alcohol advertising] may not be aimed specifically at minors or, in particular, depict minors consuming these beverages, and

[alcohol advertising] shall not link the consumption of alcohol to enhanced physical performance or to driving.

Johnnie Walker has sponsored McLaren for a decade © XPB

It is held likely that EU-wide bans on alcohol sponsorship - mirroring tobacco bans introduced in 2005 - will follow, using the WHO's Global Strategy to Reduce the Harmful Effects of Alcohol as a template, much as WHO's anti-tobacco guidelines were adopted almost verbatim.

Thus it is no surprise that alcohol companies are targeting F1 as a promotional platform ahead of total marketing bans. Johnny Walker has featured on McLarens for almost a decade now - with visibility on the silver cars substantially increased in Monaco - while Martini has reappeared, the brand's rainbow-esque stripes lending Williams a retro look.

Smirnoff, a sister brand to Walker in the Diageo stable, features large on Force India's livery - there is, though, a commercial relationship between the world's largest producer of spirits/beer/wine (market cap $50bn) and team owner Vijay Mallya's United Spirits conglomerate - and there exist whispers of further Diageo brands entering the sport, much as BAT went multi-label as it sought to exploit every opportunity.

After all, if products cannot be legally advertised on national television, surely globally broadcast grands prix are the next best thing; if print advertising is banned, photographs of branded (winning) F1 cars and drivers featured on the front pages of the world's dailies are reasonable substitutes, no?

In fact, certain brands are employing the very executives who so ably circumvented tobacco bans for over two decades to advise them on marketing strategies.

Various malt and wine brands are believed to be on the cusp of entering F1, with at least one team admitting to this column that it has proposals sitting with most major labels. Even the official FIA podium ceremony features alcohol sponsorship, as the website of Mumm champagne makes clear:

"For more than 10 years now, G.H.MUMM has been the champagne befitting any celebration, taking centre stage during the magic moment that caps a superlative victory ceremony."

The British Labour Party plans to ban alcohol sponsorship should it regain power in next year's general election, while lobby groups across the globe are campaigning to ban such activities, particularly where perceptions of drink/driving exist.

Sure, such as Diageo have 'drink responsibly' campaigns, but as Manchester University's Dr Kerry O'Brien, a noted F1 fan, points out, such messages are lost in translation: "Formula 1 has displayed such strong leadership in ensuring their driver safety, so it seems odd that they remain happy to promote alcohol, given it is a factor in around one third of all road fatalities in western nations," he told The Times.

"We know young people are particularly influenced by alcohol sponsorship and advertising, with those exposed to alcohol marketing early in life more likely to be problem drinkers later in life.

"Expecting a few anti-drink-driving messages to reduce the problem of drink-driving in the face of a thousand times more 'please drink alcohol' messages defies logic."

Smirnoff is one of Force India's sponsors © XPB

Herein lies F1's ethical problem, for while it was able to turn smoke-filled eyes to tobacco on the grounds that smoking and driving mingle in cars every day, there is no denying that alcohol and steering wheels do not mix.

Every F1 car carries 'FIA Action for Road Safety' stickers, yet equally 40 per cent of the current grid is alcohol dependent to varying degrees.

On the one hand the FIA is working (extremely effectively) with the UN to reduce road deaths across the world; on the other competitors in its own championships aid the circumvention of pending legislation prepared by a UN agency.

Thus the FIA finds itself squeezed between the freedom of (commercial) speech - and forget not that in terms of its mandate it may not involve itself in commercial matters, save where, obviously, legal breaches exist - and perceptions it is aiding and abetting links between alcohol and driving.

Equally, should F1's governing body ban 'legal' promotion of alcohol products, it would not only leave itself open to legal challenges, but could arguably put 20 per cent of the grid out of business.

True, it could (and does) use the power of its website to promote road safety, and possibly should up its campaign to include anti-drink-driving messages in the face of this increase in alcohol brands in F1.

Alcohol is only the second product group on WHO's hit list. While the eyes of sponsor agents across the F1 paddock twinkle at the merest mention of alcohol, they positively glow when talk turns to fast food and kiddie pops.

Already they are working hard on sweet-talking confectionary and fast food brands to enter the sport. McDonald's red/yellow on Ferrari, anyone? Mars on McLaren? Curry Tavern on Force India, Subway on Sauber? Forget not that four years ago the Swiss team enjoyed a brief partnership with Burger King.

Here, much like smoking, there is little evidence to show that eating burgers after midnight results in death or injury on the roads - unless, of course, such consumption takes place behind the wheel.

However, the final product category could prove to be F1's ultimate downfall unless the sport acts extremely responsibly, for while such as fags, beer, burgers and choc bars all provide(d) short-term solutions to pressing commercial issues, power advertising has the potential to kill the sport quicker than speed could ever maim the youth of tomorrow.

Already car companies are banned from using high-speed scenarios to promote their products, and an oil company had its advertising campaign with the tag line 'Man like horsepower' banned in Australia. How long before other nanny states follow suit?