Cigarette maker fined $15k for distributing, advertising products at music festival without licence

Wan Ting Koh
Reporter
Photo from Getty Images

SINGAPORE — A leading tobacco product manufacturer in Singapore was fined $15,000 on Thursday (20 February) for distributing cigarettes at an outdoors electronic music festival without a licence.

Japan Tobacco International Singapore (JTI), one of the sponsors of Ultra 2016, had come to an agreement with organisers of the music festival to provide two booths with menus stating the range of cigarettes it had.

Staff manning the booth would then take orders from partygoers and buy cigarettes from a 7-Eleven store nearby.

The firm pleaded guilty on Thursday to three breaches of the Tobacco (Control of Advertisements and Sale) Act, involving distributing tobacco products at an event ground which did not have tobacco retail licences in force, and for advertising their products through the menus set up at the booths.

Another five charges of a similar nature were taken into consideration for sentencing.

Sponsorship arrangement made among three parties

Ultra 2016 took place over two days from 10 to 11 September, 12pm to 10.30pm, at Bayfront Avenue. It was organised by Singapore-registered firm Ultra Singapore, and PICO Art International was hired as its event manager.

Tasked with sourcing for sponsors for the event, PICO reached out to JTI for a possible sponsorship in April 2016. PICO, Ultra and JTI then entered talks for a collaboration.

Although Ultra had reservations with regard to the legality of the collaboration with JTI, the firm agreed to collaborate as long as JTI ensured that the working collaboration was legal, according to court documents.

The three parties agreed that the sponsorship arrangement would involve Ultra receiving a base sponsorship amount of $20,000, as well as an incentive paid by JTI depending on the number of packets of cigarettes distributed during the event.

The contract between JTI and Ultra also stated that JTI would exclusively provide concierge services for an agreed list of products at the event.

“In return, and on JTI’s terms, Ultra allowed JTI to set up two booths within the event grounds, which would be supervised by JTI staffs,” said Health Sciences Authority Prosecutor Prakash Otharam.

PICO assisted JTI by employing part-timers to operate both the booths and to be stationed at a 7-Eleven store at nearby Bayfront MRT station. The booths carried menus that reflected JTI’s brand names of cigarettes, such as “Mevius”, “Winston”, “Camel” and “LD”, and their prices.

Event-goers would place their orders for cigarettes based on the menus at either booth. Staff at the booths would convey the orders to their counterparts at the 7-Eleven store, who would then buy the cigarettes. The orders would then be delivered to customers.

More than 1,000 packets distributed at event

JTI staff oversaw the operations of both booths on both days of the music festival. To cope with scale of orders, the firm staff stocked the booths with pre-purchased JTI-brand of cigarettes in bulk from the 7-Eleven store.

Some 1,300 to 1,600 packets of cigarettes were distributed over the event, according to the prosecution.

As the Singapore Police Force and the Central Narcotics Bureau mandated that no opened packets of cigarettes be allowed into the event to prevent illicit drugs from being brought into the event, event-goers were required to throw away all opened packets of cigarettes. Smokers would then have to buy JTI’s brand of cigarettes within the event premises.

JTI staff present at the event entrances ensured that all open packets of cigarettes were binned. After they discovered that security officers were allowing in event-goers with loose sticks of cigarettes, JTI staff complained to PICO about the contravention of the law.

JTI paid $5,000 to Ultra based on the number of cigarette packets it had sold at the event.

Event organisers fined too

Seeking a $13,000 fine for the JTI, lawyers Diana Ngiam and Sunil Sudheesan said that the firm had evaluated the “factual scenario presented by (PICO) and regrettably decided that it would be appropriate to assist attendees of Ultra 2016 to purchase cigarettes at a popular music festival”.

According to the lawyers, PICO had approached JTI to initiate a collaboration and the idea of assisting attendees purchase cigarettes originated and was driven by PICO. PICO had also put together the first formal proposal of concierge services.

“Our client would not have been involved in Ultra 2016 at all if not for (PICO). While our client accepts full responsibility for its involvement, our client’s culpability was lower than that of PICO,” said the lawyers.

PICO was fined $9,000 for its role, while Ultra was fined $7,000.

The lawyers highlighted that the price lists used a plain font and did not include images or branding of cigarette brands and were only shown to event-goers on request.

Staff on the ground had decided to pre-purchase cigarettes after incidents of impatient customers scolding staff. One staff had fainted from heat and dehydration.

“The pre-purchasing of tobacco products was meant to only reduce the waiting time for the patrons and the frequency at which the runners had to go to and fro, through the crowd and in the heat,” said the lawyers.

In a statement responding to the court case, a JTI spokesperson said, “In 2018, we received a notice from the Health Sciences Authority (HSA) alleging that JTI Singapore went against certain sections of the local tobacco control regulations back in 2016 during the Ultra Music Festival.

“While JTI believed that we acted in compliance with local regulations, we respect the HSA’s interpretation of the law and decided to bring this three-year dispute to an end and settle the case.”


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