BAT Expands Formula 1 Sponsorship to Boost Vuse, Velo Brands
BAT Expands Formula 1 Sponsorship to Boost Smoking Alternatives
(Bloomberg) -- British American Tobacco Plc is expanding its sponsorship of the McLaren Formula One team next year to boost marketing of cigarette alternatives as controversy rages over whether tobacco branding should be let back into the auto-racing circuit after a decade-long hiatus.
McLaren will provide more promotional spots on its cars next year and BAT will also be a partner for the team as it returns to full-time IndyCar competitions in the U.S., the company said Thursday.
Restrictions in several Formula One racing locations forced McLaren to strip BAT labels for Vype and Vuse vaping products from the cars this season. In March, the World Health Organization urged member countries to ban tobacco advertising when hosting or broadcasting Formula One events.
BAT left Formula One more than a decade ago when the European Union began restricting tobacco advertising in sporting events.
Philip Morris International Inc. quietly kept sponsoring Scuderia Ferrari but took its brand logos off the vehicles. Last year Ferrari cars and uniforms at some races started to display the slogan “Mission Winnow.” Philip Morris says it created the program to highlight new initiatives and spur discussion rather than promoting specific products, but it was barred from some Formula One races.
BAT said it’s introducing the Vuse vaping brand outside the U.S. this weekend at the Grand Prix in Abu Dhabi. Next year McLaren cars will also display the brand of its Velo oral-nicotine products.
This year, in places that prohibit tobacco marketing, McLaren cars shifted ads to other brands such as convenience-store operator 7-Eleven and duty-free retailer Dufry. In China, instead of advertising products, BAT changed the spots to include its slogan “A Better Tomorrow.”
Vaping is facing a backlash in the U.S. after the outbreak of a mystery illness linked to the practice. BAT Wednesday lowered its outlook for sales growth from new products due to the slowdown in the U.S. The company has invested $4 billion in new product categories in the past five years as the tobacco industry introduces more alternatives to smoking.
Shares of BAT fell 1.1% in London Thursday morning. They have gained 22% this year.
Michael R. Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned and given money in support of a nationwide ban on flavored e-cigarettes and tobacco.
To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net
To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net
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