The tobacco industry remains among the world’s largest. Among U.S. tobacco giants, a drop in smoking in America has pushed their activities overseas, primarily to countries that have a large portion of their populations that are still smokers. The ability to market tobacco has been challenged by one of the world’s largest health organizations. If the plan works, billions of dollars in tobacco ads could disappear.

The World Health Organization (WHO) wants tobacco companies to drop public marketing of their products. The tip of their plan is to end car racing ads. Formula One, the dominant global racing company, drove viewership of 352 million people who watched races last year. Formula One’s parent group is a public company with a market cap of $8 billion.

While worldwide tobacco ads, including those that involve sports, continue to have a significant presence in sports, much of this has been curtailed in the United States. The NASCAR annual race series was once called the Winston Cup, named after a popular cigarette brand. Tobacco ads have now been banned from NASCAR completely.

The WHO announced that it “is urging governments to enforce bans on tobacco advertising, promotion and sponsorship at sporting events, including when hosting or receiving broadcasts of Formula 1 and MotoGP events.” This would affect race sponsorships in nations with large numbers of smokers like Japan and Italy. While other large races happen in China and Russia, governments in those countries are less likely to be pressured by outside forces.

The value of some tobacco brands runs into billions of dollars because of tobacco use and substantial marketing budgets. Marlboro is among the world’s most valuable brands, ranked as the 10th most valuable U.S.-based brand in the world, at $91 billion. Marlboro is owned by tobacco giants Altria in the United States and Philip Morris overseas. Marlboro’s sports market deals are its largest promotional outlets.

Another part of the international public health agency’s new push: “WHO also urges all sporting bodies, including Formula 1 and MotoGP, to adopt strong tobacco-free policies that ensure their events are smoke-free and their activities and participants, including race teams, are not sponsored by tobacco companies.” Given the size of the racing companies and tobacco manufacturing corporations, that does not seem likely.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.