JOE CAMEL DESIGNED TO LURE TEENS

Internal papers reveal cigarette-maker's intent

Internal company documents made public yesterday show that the ``Joe
Camel'' advertising campaign by R.J. Reynolds Tobacco Co. was designed to
lure teenagers as young as 12, especially boys attracted to the competing
Marlboro brand.

San Francisco City Attorney Louise Renne released the documents as part of
a settlement between San Francisco and other plaintiffs and R.J. Reynolds.

The company also agreed to pull the nine-year ad campaign for Camel
cigarettes and pay $10 mil- lion to San Francisco and several other
California cities and counties to finance youth anti-smoking campaigns.

The documents show that the Camel campaign was first tested in France,
where the company's advertising agency described the ad in 1974 as ``about
as young as you can get'' and suggested the use of comic strips to
``reverse the preference for Marlboros among younger smokers.'' RJR's
French subsidiary was later convicted of violating French laws prohibiting
such advertising.

R.J. Reynolds has repeatedly denied that the Joe Camel cartoon character,
used widely to promote Camel cigarettes in billboard and magazine
advertising, was intended to appeal to teenagers.

The company released a statement yesterday accusing plaintiff attorneys of
having ``cherry picked'' the documents for the media. The company said some
of the teenager studies were byproducts of adult surveys and were never
intended to be used for marketing strategies.

However, the company's marketing documents, some stamped ``RJR SECRET,''
demonstrate that it hoped to secure a new market of lifelong smokers whose
fierce brand loyalty is formed early.

Smokers tend to stick for years to one brand, usually their first one, so
companies find it difficult to increase sales by getting smokers to switch
brands. Establishing brand loyalty at the outset of a smoker's career,
which usually begins before age 18, is therefore crucial in cigarette
marketing.

In a 1974 presentation to the board of directors, RJR marketing vice
president C.A. Tucker pointed to ``the growing importance of the young
adult in the cigarette market,'' defined as the 14 to 24 age group, saying
they ``represent tomorrow's cigarette business.''

Tucker said competitors' Marlboro and Kool brands enjoyed ``strong young
adult franchises and high cigarette brand loyalties'' that ``suggests
continued growth for Philip Morris and (Brown & Williamson) as their
smokers mature . . . . Failure by RJR to attract young adult smokers,
Tucker said, would lead to ``slow market share erosion for us in the years
to come unless the situation is corrected.''

`YOUTHEN THE BRAND'

One RJR memo conceded that the effort was an attempt to `` `youthen' the
brand; the entire advertising and promotional campaign used at the time was
geared to this end, with the `funny' Camel playing a key role in the
advertising.''

Just before the Joe Camel campaign began in 1988, an RJR marketing study of
15- to 17-year-olds identified various social categories of teenagers,
trying to identify likely smokers and trendsetters. Teen smokers, for
example, were more likely to listen to hard rock music, the marketers said.

Plaintiffs' lawyers pointed out that the Joe Camel campaign increasingly
featured young characters in leather jackets riding motorcycles and hanging
out at ``Joe's Place'' listening to a rock band called ``Hard Pack.''

R.J. Reynolds countered yesterday that the documents ``reflect the social
attitudes of the times in which they were created'' and that the company
has only directed its advertising at adults.

The original suit against R.J. Reynolds was filed by Janet Mangini, a San
Francisco attorney represented by the San Diego law firm Milberg, Weiss,
Bershad, Hynes & Lerach, a major personal injury and class-action
litigation firm.

The city and county of San Francisco joined the suit, becoming the first
locality to sue a tobacco company on the grounds that its actions were a
burden on taxpayers. The suit pointed out that city hospitals treat smokers
for their smoking-related diseases.

San Francisco was later joined in the Joe Camel suit by the cities of San
Jose and Los Angeles and 14 California counties.

OTHER TOBACCO CASES

San Francisco has two other tobacco cases in litigation in federal and
state court. Those cases could be included in the unprecedented $368
billion proposed settlement between the tobacco companies and several
states over Medicaid costs. That settlement requires congressional
approval, which still remains uncertain.

Renne said she has ``major questions and concerns'' about the settlement
now before Congress because it could pre-empt local lawsuits such as San
Francisco's.

Attorney fees for the Joe Camel settlement have not yet been decided. Renne
said San Francisco will receive about $800,000 to cover legal costs; the
city Health Department will receive $1.5 million to run youth anti-tobacco
campaigns and enforce laws against underage smoking.

Mangini asked for no money settlement, but her attorneys at Milberg, Weiss
will pursue their contingency fee in arbitration proceedings, either as
part of the Joe Camel settlement or in the national settlement now before
Congress.

Legal fees in the tobacco cases have been highly controversial. Contingency
fees for the handful of trial attorneys who have assisted government
lawyers in the tobacco cases could run into the billions of dollars. If a
settlement is approved by Congress, lawyer fees would be determined by
court arbitration.

)1998 San Francisco Chronicle