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Tobacco marketing is a taboo subject at the best of times, but with the imminent enforcement of the much-mooted advertising ban, marketers in the trade are talking about how the landscape is about to get "darker".

The government's bill aims to put an end to ads in magazines, newspapers, posters, and internet and promotional activity through sponsorship by 2006. It also sets out to stop unsolicited direct marketing, free distribution, coupons, price promotions and brand stretching - the trend for tobacco brands to diversify into new sectors as a way of promoting their label.

Big loophole

Paul Webbewood, a senior manager in the tobacco policy unit at the Department of Health, says the ban "makes clear we want to tackle indirect advertising as well, otherwise there is a big loophole".

Lawyers at the major tobacco companies are busily poring over the document in an attempt to identify any such loopholes, but are reluctant to comment on potential opportunities before the law is approved. Geoffrey Couchman, sales director at Imperial Tobacco, explains the wall of silence: "If there is an opportunity, and if you raise the issue, you might draw the government's attention to it."

The bill is still at consultation stage, but, on the face of it, the outlook looks bleak for anyone trying to run promotions in this arena.

The only place the battle of the brands could then take place would be on the gantry, the metal framework that holds cigarette packets at point-of-sale - which does not give marketers much room for manoeuvre.

Tobacco firms plan to lobby hard against this worst case scenario and are grilling the government about the wording in the bill. According to Couchman, even the term "promotion is not clearly defined. Direct marketing is also a thorny issue.

The bill suggests that brands can market products directly to customers as long as consumers request information on each separate occasion. The industry is arguing that this goes against freedom of speech and if customers have opted once to get promotional literature, that should suffice. "The regulations are harsh considering it's a legal product," says Caroline Roberts, legal director at the Direct Marketing Association.

Despite the prohibitive proposals, Stephen Groom, a director at law firm Osborne Clarke, has faith in the "imagination and creativity of tobacco marketers, and their ability to use possible exemptions in the bill to their advantage. "This is an enormous hurdle, but I am sure there are still going to be ways to build customer relationships, he says. He sees the enforced changes as an opportunity for brands to make better use of digital marketing and mobile commerce in a market where the main challenge is to drive loyalty and prevent brand switching.

British American Tobacco (BAT) clearly also sees a future in one-to-one communications: the company is on the hunt for a relationship marketing chief to fill a newly created role. BAT declined to comment on its future promotional strategy, except to say that the UK is not a priority market for its brand.

Darren Harris, communications manager at Rothmans, shares Groom's optimism.

He says the tobacco giant does not view the bill as "all gloom and doom" and has no contingency plans at this stage - not least because the details of the ban have yet to be finalised. And it is not certain whether the bill will be passed by the end of the year.

Political correctness

In keeping with political correctness, Harris says he welcomes "sensible regulations on tobacco", but there is a hint of defiance when he adds: "We believe in the right to communicate with informed adults with regard to, what is at the end of the day, a legal product."

Harris is probably alluding to a note in the bill's guidelines which states: "As sale of tobacco products to adults is lawful, appropriate commercial communications are not prohibited.

"As long as these communications do not reach the wider public they will be excluded from the ban. Similar legislation in place in Europe has led to a proliferation of promotional activity in "horeca environments: hotels, restaurants and cafes.

Alasdair Lennox, associate design director at agency Fitch, works on the BAT global account. He says the cigarette maker is "focusing on communication channels where you can guarantee the age is above the legal minimum. The legislation then generally lets you talk to your customers, albeit in restricted ways."

Fitch has set up a cafe for BAT brand Lucky Strike in Amsterdam, called 451 Fahrenheit. Lennox describes it as a "lifestyle tobacconist selling products associated with smoking and creating a "chilled out" atmosphere.

Industry sources say BAT is looking at bringing the concept to the UK, but the tobacco firm declines to comment on this or how it would do it within the law. BAT might be able to do it if it successfully positions as "a specialist tobacconist", and therefore be exempt from the ban. Specialist tobacconists are defined in the guidelines as a retailer that makes the bulk of its sales from smoking accessories. However, this would probably mean setting up shops as loss leading entities that serve only to generate brand awareness.

Reasonable price

Although giveaways are not allowed, there will be ways brands can incentivise purchase. According to Gavin Hilton, planning director at 141, which works on the BAT account: "You can offer to sell a product along with a pack of cigarettes as long as you sell the two for a 'reasonable' price. But the meaning of 'reasonable' is a grey area."

Hilton advises looking to markets such as France, which have a tobacco advertising bans already in place. "Lucky Strike in France has run limited edition packs, for example, as a way of catching the consumer's eye."

Another option is targeting Brits on holiday. As the laws governing tobacco advertising vary from country to country, catching holidaymakers in an airport where regulations are less stringent could work. Brands such as Kent and Lucky Strike currently run promotions around "brand experience capsules in airports.

"People are in a different mindset when they're on holiday and are more inclined to experiment with a different brand, says Fitch's Lennox.

Tobacco brands already established in non-tobacco sectors, such as Dunhill in luxury goods, will actually gain competitive advantage. While they will be permitted to keep promoting non-tobacco products, rival tobacco firms will no longer be allowed to stretch into new areas.

Despite any small rays of hope for tobacco marketers, the bill largely heralds the end of cigarette marketing to the general public. The industry will have to tread carefully with any promotions it runs, and doubtless will have to refocus its promotional strategy to target the retail trade - which is exempt from the ban - rather than consumers directly.

THE BAN TOBACCO'S COUNTDOWN

The tobacco advertising and promotion bill is currently passing through the House of Commons and many commentators expect it to become law by the end of this year.

The government is determined to tighten regulations on tobacco promotion in a bid to reduce consumption by 2.5 per cent, the initiative being a key vote winner for New Labour in 1997.

The consultation process was extended to 1 October this year following a blocking opinion from Germany. The UK parliament returns from summer recess on 15 October and, assuming there are no further delays, the bill will be passed in early November. If it is not passed by the end of this year, the consultation process must start again at the beginning of 2003.