"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

Other Big Lies

When we received our copy of the super-provisional request submitted to the civil court of Basel (Civil Gericht Basel-Stadt) by Oettinger Imex AG and Davidoff & Cie SA, the two tobacco companies, we couldn't believe our eyes: it contained blatantly false statements on two crucial points. We raised this issue during the hearing on 13 November, and the judge, Dr. A Heierli, concurred with our finding.

Let us, as a preamble, say that the Oettinger Davidoff group collectively designates Oettinger Imex AG in Basel, the parent company of the group, and all its subsidiaries. All companies have Mr. Reto Cina as their chairman. Davidoff & Cie SA in Geneva, being a subsidiary of Oettinger Imex AG, belongs to the Oettinger Davidoff group. The Oettinger Davidoff group is however not a formal legal entity.

In the super-provisional request, under number 20, one can read the following statement:

Here is our translation: "The Oettinger Davidoff group comprises a group of companies, which manufacture and sell exclusively cigars. The Oettinger Davidoff Group is neither active in the cigarette business nor is it linked to Imperial Tobacco Switzerland SA or Imperial Tobacco Group PLC (UK)."

First false statement: "The Oettinger Davidoff group is not in the cigarette business"

Davidoff cigarettes are sold all over Switzerland, side by side with Marlboros. On Friday 13 November, before leaving Geneva for Basel to attend the hearing, we bought a sample of each type of Davidoff cigarette pack (Blue, Gold, Gold Slims, Rich Blue, Classic, and Magnum - this cost us CHF 45.80). When it was our turn to be heard by the judge, our lawyer started by drawing his attention to the statement in the other party's request in which they deny any activity in the cigarette business. He then put on the judge's desk all the Davidoff cigarettes packs we had bought in the morning, with the receipt. He also provided the judge with an enlarged copy of a Davidoff Gold pack, flattened. Both exhibits are shown below:

Our lawyer read the inscription on the side of the packs: "Made in Germany by Reemtsma under licence by Davidoff & Cie SA, Geneva." Very interesting to see on cigarette packs the mention of Davidoff & Cie SA, a member of the Oettinger Davidoff group, a group not supposed to be in the cigarette business!

Had this not been sufficient to convince the judge that the Oettinger Davidoff group is, contrary to what they say, in the cigarette businesss, we could have produced a pack of American Spirit cigarettes, the claimed "100% additive-free natural tobaccos" cigarettes produced by Santa Fe Natural Tobacco Company in the USA (a subsidiary of R.J. Reynolds), which are imported and sold in Switzerland by, guess who, none other than Oettinger Imex AG, the parent company of the Oettinger Davidoff group! How could they say that they are not in the cigarette business?

Second false statement: "The Oettinger Davidoff group is not linked to Imperial Tobacco"

The exact legal nature of the relationship between Imperial Tobacco Group PLC and the Oettinger Davidoff group is one of the best kept secrets of the multinational. In its public reports (interim and annual reports), Imperial doesn't say a word about its link to the Swiss tobacco group. One has to go back to the 2005 SEC Filing to find a very elusive mention of such a relationship:

In 2006, Imperial Tobacco Group "acquired all of the outstanding share capital of certain companies that owned the Davidoff and Zino trademarks for cigarettes and cigarette accessories for a total cash consideration of €540 million." (SEC Filing 2007, p. 88). If "certain companies" appears to you a bit vague, don't expect anything more specific: no further information is provided by Imperial.

It seems  that the acquisition of the Davidoff cigarette brand by Imperial did not call into question the "long-term arrangement" involving, in particular, Davidoff & Cie SA. On the contrary, the acquisition has enabled the multinational to maintain its "excellent relationship with the Oettinger Davidoff Group, owner of the worldwide Davidoff trademark for tobacco products other than cigarettes", ensuring that both parties continue to manage together "the integrity of this valuable brand." (quotations from press release of 23 August 2006)

And so, with some digging, one can find scarce and elusive information, but clear enough to provide evidence of an important "relationship" between the Oettinger Davidoff group and Imperial Tobacco. The relationship is furthermore of strategic significance, as it is meant to manage the worldwide integrity of the Davidoff brand, Imperial's "flagship strategic brand", "with global growth potential" and "an indefinite life."

We did not need to explain all the above to the judge to convince him that the statement made by the other party denying any link between Oettinger Davidoff and Imperial Tobacco was false. We gave him copies of key pages of Imperial interim and annual reports, where the Davidoff logo figures prominently (see examples in article Imperial and Davidoff). We also drew his attention to the inscription on the side of the pack of Davidoff Gold cigarettes which he had in front of him.

"Made in Germany by Reemtsma under licence of Davidoff & Cie SA, Geneva" This is an extraordinary inscription on a pack of cigarettes, which says it all. First, it proves that Davidoff & Cie SA is indeed in the cigarette business, as we observed above. Second, it shows that Davidoff & Cie SA deals with Imperial Tobacco, since Reemtsma in a 100% owned subsidiary of Imperial since 2002. Third, it shows that the relationship between Imperial and Davidoff & Cie is quite deep and interwoven. Imperial Tobacco owns the Davidoff cigarette brand. Imperial Tobacco also owns the company in Germany where it is manufactured. Therefore Imperial Tobacco has no need of the license of a third party to manufacture its own brand of cigarette in its own factory! The only remaining explanation is that Davidoff & Cie SA is not a true third party, but, rather, a key component of the "long-term arrangement" of Imperial Tobacco with the Oettinger Davidoff group.

Why?

As we have established now that the two tobacco companies of the Oettinger Davidoff group made false statements about their being engaged in the cigarette business and about their relationship with Imperial Tobacco, the next question is: why? What are they trying to hide, and for what reason? Are they afraid that if it is known that they are in the cigarette business, this would lead to further questions and further discoveries about the real nature of their business? This is an interesting issue. As soon as our research produces new findings, we will publish them on this website.