Analysis: F1 Forced to Try to Kick Tobacco Habit

Formula One, already cutting costs to fend off a financial crisis among smaller teams, will this year be forced to face the reality that the era of dependence on tobacco sponsorship is drawing to a close.

Analysis: F1 Forced to Try to Kick Tobacco Habit

Formula One, already cutting costs to fend off a financial crisis among smaller teams, will this year be forced to face the reality that the era of dependence on tobacco sponsorship is drawing to a close.

The governing International Automobile Federation (FIA) estimated in 2002 that tobacco companies contributed $350 million a year to motorsport and it is fair to assume Formula One took the lion's share.

From July 31, a European Union (EU) directive will outlaw all print advertising, radio advertising and event sponsorship by tobacco companies.

Although other sports, such as snooker and darts, will be affected, Formula One will be by far the hardest hit.

"If we lose tobacco sponsorship in Formula One there will be a rupture," Formula One supremo Bernie Ecclestone said before last season. "People don't realise how bad it would be."

Half of the 10 teams in F1 -- Ferrari, McLaren, Renault, Jordan and BAR -- were substantially backed by cigarette brands in 2004.

Formula One had originally agreed to a voluntary global ban at the end of 2006 but FIA president Max Mosley said last year that the EU ban had driven some races outside Europe and cigarette sponsorship was likely to endure in the sport.

World champions Ferrari, who benefit to the tune of some $60 million a year from their long-running deal with Phillip Morris's Marlboro brand, have said they will continue with tobacco sponsorship for as long as they can.

BAR were founded by British American Tobacco (BAT) but after investing many millions of pounds --- 87 million in 2003 -- BAT are looking to get out of motorsport and have sold 45 percent of the team to engine suppliers Honda.

New Sponsors

A report in December said that McLaren were going to drop title sponsors West cigarettes.

The team responded that they would carry the brand on their cars when the season opened in Australia on March 6, but the deal might not last much beyond the EU ban.

It is not simply a matter of replacing the tobacco companies with other sponsors.

Williams gave up tobacco sponsorship at the end of the 1999 season and one of their current backers is the NiQuitin CQ brand of products which help people to give up smoking.

"We did it because we knew the axe would be coming down but we didn't know when or how," said Williams' head of marketing Jim Wright. "To continue would have been gambling on our financial future."

Team owner Frank Williams said last year that sponsorship from non-cigarette companies was worth 25 to 30 percent less than from tobacco companies.

"I think what he meant by that was that tobacco companies were prepared to pay a premium for certain packages that companies that weren't restricted would not," said Wright.

There is a school of thought that ridding the sport altogether of cigarette branding would open the door to more family-friendly companies.

"There's no evidence to suggest that one way or another," said Wright. "But I don't think it is the case that Formula One is as closely identified with tobacco as it was a few years ago."

New Countries

Another way in which F1 might avoid the European ban is by holding grands prix in new countries. China and Bahrain were added to the calendar last year, while Turkey joins for 2005.

These countries sometimes offer less restrictive rules on tobacco sponsorship and, importantly for the cigarette companies, a high profile in developing economies.

"The tobacco companies are already established in the developing world," said Deborah Arnott of British pressure group Action on Smoking and Health (ASH).

"There are about five million people a year dying from smoking-related diseases at the moment and that is split about 50-50 between the developed and the undeveloped world.

"By 2030 that will be 10 million but the split will be 30 percent in the developed world and 70 percent in the developing world."

For many years teams have raced without tobacco liveries at some races and restored it for races where the local laws allow it, but that may soon no longer be an option for the seven teams based in, or with major operations in, Britain.

Depending on the interpretation of the British law which enforces the EU directive, it could allow for prosecution of any British-based team carrying tobacco sponsorship abroad if images of the race are broadcast in Britain.

Last month's report that said that McLaren would be ending their association with West suggested Diageo's Johnnie Walker whiskey brand would take over as title sponsors.

Drinks companies might seem a natural replacement for tobacco sponsors -- global brands looking to identify with a glamorous sport.

The fact that French legislation banning advertising of alcohol at sports events was ratified by the European Court of Justice last July, however, means Formula One might end up travelling down a familiar road in a few years' time.

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