It Is The Inter-Agency Council-Tobacco And Not The Department Of Health Which Has The Primary Primary urisdictio urisdiction n To !egulate "ales Promotion Promotion Acti#ities Acti#ities $or Tobacco Tobacco Products %nder !epublic Act &'(() $I!" $I!"T T DI*I DI*I"I "ION ON++ ,! ,! No No '.'& '.'&/0 /0++ 1arc 1arch h '2+ '2+ '.(2 '.(2++ THE THE DEP DEPARTME RTMENT NT OF HEAL HEALT TH, REPRESENTED BY SECRETARY ENRIQUE T. ONA, AND THE FOOD AND DRUG ADMINISTRATION ADMINISTRATION (FORMERLY THE BUREAU OF FOOD AND DRUGS), REPRESENTED BY ASSISTANT ASSISTANT SECRETARY SECRETARY OF HEALTH HEALTH NICOLAS B. LUTERO III, OFFICER-IN-CHARGE, PETITIONERS, VS. PHILIP MORRIS PHILIPPINES MANUFACTURING, INC., RESPONDENT The Fac!" Philip Morris Philippines Manufacturing Manufacturing Inc., thru its advertising agency, agency, filed an application for sales promotion under Article 166 of Republic Act 7!" before the #$A%, no& $A% for its Gear Up promo. $ifteen days having lapsed &ithout any action ta'en on its application, the company in(uired about its status but &as verbally informed of a Memorandum issued by the %)* prohibiting the tobacco companie companies s from conductin conducting g any tobacco tobacco promotiona promotionall activit activities ies in the country country.. +he companys companys advertising advertising arm thus re(uested that any formal action thereof thereof be made in &riting. -ubse(uently -ubse(uently,, the compa company ny thru thru anot another her advert advertisi ising ng agen agency cy applie applied d for for sales sales promo promotio tion n permi permitt for its Golden promo. +he #$A% #$A% refused refused outright outright its application application pursuant to a directive directive of the #$A% #$A% %irector %irector Stick promo. that that all all permi permitt appl applica icatio tions ns for for promot promotio iona nall activi activiti ties es of tobac tobacco co compa companie nies s &ill &ill no longe longerr be accepted. )n anuary 1/, 0!, 0!, the #$A% #$A% through %irector #arbara 2uttiere3 informed PMPI that its application for 2ear 4p promo &as denied upon instruction of %)* 4ndersecretary for -tandards and Regulations that all promotions, advertisements and5or sponsorships of tobacco products are already prohibited prohibited under Republic Republic Act !011, !011, as of uly 1, 0. +hus, PMPI filed an administrative administrative appeal before the %)* -ecretary, arguing that under RA !011, promotion is not prohibited but merely restricted &hile there are specific provisions banning advertisements and sponsorships, none could be found banning promotion. -ince the #$A% #$A% had been granting such applications applications prior to anuary anuary /, 0!, it had ac(uired a vested right to the granting of such sales promotional permit. +he %)* -ecretary -ecretary thru a 8onsolidated 8onsolidated %ecision denied denied the appeal. Ruling that the issuance issuance of permits &as never never a ministerial duty of the #$A%, #$A%, it &as discretionary discretionary on the part of the #$A% #$A% to grant or deny any application for the permit, hence PMPI could not have ac(uired a vested right to the grant of the promotional permit. -ince the intent of RA !011 !011 &as to completely ban advertisements advertisements promotions and sponsorships, promotion being an inherent part of both advertising and sponsorships should be included included in the prohibition. RA !011 !011 should should not be interpreted interpreted in such a &ay that it &ill be rendered rendered meaningless meaningless and ridiculous. ridiculous. $urther, $urther, the country country is obligated obligated to observe observe the provisions provisions of the $rame&or' 8onvention on +obacco 8ontrol 9$8+8:, an international treaty to &hich it is a party. )n appeal to the 8A, ho&ever, the latter set aside the %)* %)* 8onsolidated %ecision. ;hile advertising and sponsorships sponsorships &ere completely banned by RA !011, !011, the same does not hold true for promotion. $urther the %)* is &ithout authority to enforce the provisions of RA !011, since it is the Inter
has the e?clusive e?clusive po&er and function to administer and implement the provisions of @RA !011 ? ? ?.B -ection 166 of RA 7!" under &hich authority the PMPI sought sales promotional permit &as already repealed by -ection ! of RA !011. !011. +he %)* elevated the case to the -upreme 8ourt to assail the 8A ruling. The I!!#e" 9a: &hether or not the 8A erred in finding that the authority of the %)*, through the #$A%, to regulate tobacco sales promotions under Article 116 in relation to Article 1! of RA 7!" had already been impliedly repealed by RA !011, &hich created the IA8<+obacco and granted upon it the e?clusive authority to administer and implement the provisions thereof and 9b: &hether or not the 8A erred in ascribing grave abuse of discretion upon the %)* &hen the latter held that RA !011 has also completely prohibited tobacco promotions as of uly 1, 0. The R#$%&'" +he petition is bereft of merit. At the core of the present controversy controversy are the pertinent provisions provisions of RA 7!", i.e., Article 116 in relation to Article 1!, to &itC Article 116. 116. Permit to Conduct Promotion. = Do person shall conduct any sales campaigns, including beauty contest, national in character, character, sponsored and promoted by manufacturing enterprises &ithout first securing a permit from the concerned department at least thirty 9: calendar days prior to the commencement thereof. 4nless an obEection or denial is received &ithin fifteen 91/: days from filing of the application, application, the same shall be deemed approved approved and the promotion campaign or activity may be conductedC Provided, +hat any sales promotion campaign using medical prescriptions or any part
thereof or attachment thereto for raffles or a promise of re&ard shall not be allo&ed, nor a permit be issued therefor. 9Fmphasis supplied: Article 1!. Implementing Agency . = +he %epartment of +rade and Industry shall enforce the provisions of this 8hapter and its implementing rules and regulationsC Provided, +hat &ith respect to food, drugs, cosmetics, devices, and ha3ardous substances, it shall be enforced by the %epartment of *ealth. 9Fmphasis and underscoring supplied: +he %)* derives its authority to rule upon applications for sales promotion permits from the above< cited provisions. )n the other hand, -ection 0! of RA !011 creating the IA8<+obacco providesC -ection 0!. Implementing Agency. = An InterpromotionB as one of the activities related to tobaccoC RA 7!" defines “sales promotionB under Article " 9bm:, &hile RA !011 spea's of > promotionB or >tobacco promotionB under -ection " 9l:. >Sales promotion B is defined in Article " 9bm: of RA 7!", to &itC Article ". %efinition of +erms. = $or purposes of this Act, the termC ???? bm: >Sales Promotion B means techni(ues intended for broad consumer participation &hich contain promises of gain such as pri3es, in cash or in 'ind, as re&ard for the purchase of a product, security, service or &inning in contest, game, tournament and other similar competitions &hich involve determination of &inner5s and &hich utili3e mass media or other &idespread media of information. It also means techni(ues purely intended to increase the sales, patronage and5or good&ill of a product. 9Fmphases and underscoring supplied: Identifying its Gear Up Promo and Golden Stick Promo to be activities that fall under sales promotion as contemplated in the said provision, PMPMI filed its permit applications under Article 116 of RA 7!" before the #$A%. Mean&hile, -ection " 9l: of RA !011 defines > promotionB as follo&sC -ection ". %efinition of +erms. = As used in this ActC ???? l. >PromotionB = refers to an event or activity organi3ed by or on behalf of a tobacco manufacturer, distributor or retailer &ith the aim of promoting a brand of tobacco product, &hich event or activity &ould not occur but for the support given to it by or on behalf of the tobacco manufacturer, distributor
or retailer. It may also refer to the display of a tobacco product or manufacturers name, trademar', logo, etc. on nonsales promotionB in RA 7!", as &ell as those under >promotionB in RA !011, as &ould &arrant a delineation in the authority to regulate its conduct. In fact, the techni(ues, activities, and methods mentioned in the definition of >sales promotionB can be subsumed under the more comprehensive and broad scope of >promotion.B In order to fully understand the depth and scope of these mar'eting activities, the 8ourt finds it necessary to go beyond the ambit of the definitions provided in our la&s. )utside RA 7!", >sales promotionB refers to activities &hich ma'e use of >media and nonto provide added value or incentives to consumers, &holesalers, retailers, or other organi3ational customers to stimulate immediate salesB and >product interest, trial, or purchase.B ! F?amples of devices used in >sales promotionB are contests, coupons, freebies, pointpromotionB is a term fre(uently used in mar'eting &hich pertains to >raising customer a&areness of a product or brand, generating sales, and creating brand loyaltyB # &hich utili3e the follo&ing subcategoriesC personal selling, advertising, sales promotion, direct mar'eting, and publicity.$ +he three basic obEectives of promotion areC 91: to present information to consumers as &ell as others 90: to increase demand and 9: to differentiate a product. % >PromotionB can be done through various methods, e.g., internet advertisements, special events, endorsements, incentives in the purchase of a product li'e discounts 9 i.e., coupons:, free items, or contests. 1& 8onse(uently, if >sales promotionB is considered as one of the subcategories of >promotion,B it is clear, therefore, that >promotionB necessarily incorporates the activities that fall under >sales promotion.B 8onsidering that the common and fundamental purpose of these mar'eting strategies is to raise customer a&areness in order to increase consumer demand or sales, dra&ing a demarcation line bet&een >promotionB and >sales promotionB as t&o distinct and separate activities &ould be unnecessarily stretching their meanings and, accordingly, so& more confusion. Moreover, the techni(ues, methods, and devices through &hich >sales promotionB are usually accomplished can li'e&ise be considered as activities relating to >promotion,B li'e raffle contests, &hich necessarily re(uire pri3es and dra&ing of &inners, discounts, and freebies. 8oncomitantly, &hile the 8ourt ac'no&ledges the attempt of the %epartment of ustice 9%):, through its %) )pinion Do. 0!, series of 0", 11 9%) )pinion: to reconcile and harmoni3e the apparently conflicting provisions of RA 7!" and RA !011 in this respect, to the 8ourts mind, it is more logical to conclude that >sales promotionB and >promotionB are actually one and the same. +he %), in fact, referred 12 to >product promotionB in RA !011 as >promotion per seB &hich, therefore, can be ta'en to mean an allsales promotion.B #esides, the %) )pinion is merely persuasive and not necessarily controlling. $urthermore, the declared policy of RA !011 &here >promotionB is defined includes the institution of >a balanced policy &hereby the use, sale and advertisements of tobacco products shall be regulated in order to promote a healthful environment and protect the citi3ens from the ha3ards of tobacco smo'e ? ? ?.B *ence, if the IA8<+obacco &as created and e?pressly given the e?clusive authority to implement the provisions of RA !011 in accordance &ith the foregoing -tate policy, it signifies that it shall also ta'e charge of the regulation of the use, sale, distribution, and advertisements of tobacco products, as &ell as all forms of >promotionB &hich essentially includes >sales promotion.B +herefore, &ith this regulatory po&er conferred upon the IA8<+obacco by RA !011, the %)* and the #$A% have been effectively and impliedly divested of any authority to act upon applications for tobacco sales promotional permit, including PMPMIs. $inally, it must be stressed that RA !011 is a special legislation &hich e?clusively deals &ith the subEect of tobacco products and related activities. )n the other hand, RA 7!" is broader and more general in scope, and treats of the general &elfare and interests of consumers vis
of e(ual theoretical application to a particular case, the one specially designed therefore should prevail. 13 In fine, the 8ourt agrees &ith the 8A that it is the IA8<+obacco and not the %)* &hich has the primary Eurisdiction to regulate sales promotion activities as e?plained in the foregoing discussion. As such, the %)*s ruling, including its construction of RA !011 9 i.e., that it completely banned tobacco advertisements, promotions, and sponsorships, as promotion is inherent in both advertising and sponsorship:, are declared null and void, &hich, as a necessary conse(uence, precludes the 8ourt from further delving on the same. As it stands, the present applications filed by PMPMI are thus remanded to the IA8<+obacco for its appropriate action. Dotably, in the proper e?ercise of its rule< ma'ing authority, nothing precludes the IA8<+obacco from designating any of its pilot agencies 9&hich, for instance, may even be the %)* 1 to perform its multifarious functions under RA !011. ;*FRF$)RF, the petition is %FDIF%. +he %ecision dated August 06, 011 and the Resolution dated August , 010 of the 8ourt of Appeals in 8A<2.R. -P Do. 1!"! are hereby A$$IRMF% &ith the M)%I$I8A+I)D in that the present permit applications filed by respondent Philip Morris Philippines Manufacturing, Inc. for its tobacco sales promotions are hereby RFMAD%F% to the Inter< Agency 8ommittee<+obacco for appropriate action. "O O!D3!3D P3!4A"-53!NA53+ 6 See&, C.*., (Cha%+e!&), Le&a-De Ca!, Be!a%& + and Pee, **.+ concur
