"We are in the cigarette business. We are not in the sports business. We use sports as an avenue for advertising our products." Tobacco Industry Executive (at RJR)

Using tennis to sell death

Imperial and Davidoff

Imperial Tobacco Group PLC, the world's fourth largest tobacco multinational, acquired the Davidoff cigarette tardemark in 2006 for 540 million Euros from by Tchibo Holding AG, a German company. In 2002, Imperial Tobacco had bought Reemtsma, a German tobacco company (West, JPS), which was the worldwide licensee of the Davidoff cigarette brand. This means that Imperial Tobacco paid 540 million Euros to change its status from worldwide licensee to owner of the Davidoff brand. This brand must therefore be of quite special value to the multinational.

And special it is, indeed. The Davidoff brand occupies such a special place in the rich portfolio of Imperial's brands that it enjoys a unique accounting status:

Strategic brand

So Davidoff is an established international brand with global growth potential, which has an indefinite life. No wonder Imperial considers it its strategic cigarette brand. To makes things clear, we can say that Davidoff is for Imperial Tobacco what Marlboro is for Philip Morris.

The Davidoff brand is so important that it is predominantly displayed in Imperial Tobacco communication, including their annual reports, as is illustrated by the few examples below:

Successful brand strategy

As soon as Imperial Tobacco took full control of the Davidoff brand, it developed it very aggresively, as is testified in the company's various reports:

• "Since our acquisition of the Davidoff cigarette trademark in September 2006, we have launched Davidoff in several new markets and introduced a number of successful brand variants, all contributing to our volume and market share gains." (Annual Report and Accounts 2007)
• "Davidoff: Key Premium International Cigarette Brand Davidoff is sold in over 100 countries worldwide..." (Annual Report and Accounts 2007)
• "Our key premium international cigarette brand Davidoff has a strong foothold in Asia and a growing presence in a number of markets worldwide." (Annual Report and Accounts 2006)
• Middle East
  "Davidoff has been a real success story in the region, recording compound annual growth of 44 per cent over the last five years." (Annual Report and Accounts 2008)
• "Our Performance: Eastern Europe
  We grew our organic volumes by 11 per cent in Eastern Europe, with Davidoff growing by 44 per cent across the region as a whole." (Half Yearly Report 2008)

Targeting Africa

Africa is particularly targeted as a market with enormous growth potential for the Davidoff brand:

• "We have recently launched Davidoff in Senegal, Gabon, Burkina Faso and Côte d’Ivoire and there are positive signs of development in all markets." (Annual report and Account 2006)
• "Following the acquisition of the Davidoff cigarette trademark last September, we have accelerated our investment in the brand. Davidoff was launched in Canada, Mexico, Romania and several African markets." (Interim report 2007)

The poor countries are easy preys for the Imperial tobacco predator. People in these countries are also great consumers of sport events on television. The satellite broadcast to 185 countries of the Davidoff Swiss Indoors brings to these vulnerable consumers, who dream of a better life, the Davidoff message: smoking Davidoff cigarettes bring you The Good Life. The message is all the more effective that they use a prestigious messenger to carry it: Roger Federer.

Roger Brennwald has recently said in an interview to a Swiss newspaper (La Tribune de Genève, 5 November 2009): "Davidoff wants to promote an image of joy, relaxation and taste, incarnated by cigar." Cigar? How could the African teenager in Burkina Faso, who watches tennis on television, guess that the huge Davidoff logo he sees on the screen is exclusively meant to be a cigar brand - of which he has never seen a single instance - as opposed to a cigarette brand, which he can buy on every street corner in his town?

Surely, you're joking, Mr. Brennwald! Your close friendship with Reto Cina, the CEO of the Oettinger Davidoff group, should provide you with a direct source of information on this question. You therefore ought to know better. You cannot ignore, in particular, that Imperial Tobacco has "acquired all of the outstanding share capital of certain companies that owned the Davidoff and Zino trademarks for cigarettes and cigarette accessories" (statement in Imperial Tobacco SEC Filing 2007) and has concluded an agreement with the Oettinger Davidoff group to "manage the integrity" of the Davidoff brand (statement made by Imperial Tobacco in press release of 23 August 2006).

Note: the integrity of the Davidoff brand. The word integrity has several meaning, but in the present context, one can readily exclude without further discussion the meaning "soundness of moral character; honesty." Remains as the only plausible meaning: "the state of being whole, entire, or undiminished." The integrity of the Davidoff brand means that the brand forms a whole, is entire - there is no distinction between the cigar brand and the cigarette brand - there is a single tobacco brand, which is "managed" jointly by Imperial Tobacco and Oettinger Davidoff. The role of the cigar in the management of the brand falls somewhere between cigarettes and non-tobacco items (see Davidoff brand stretching).  Cigar products are used jointly with carefully chosen non-tobacco Davidoff products to establish "a unique brand positioning world-wide", with a claim to "offer connoisseurs supreme pleasure", connoisseurs who enjoy "The Good Life". This is the dream that is sold to poor Africans in Burkina Faso when they buy a pack of Davidoff cigarettes, for the price of three meals for the whole family!