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Last Updated: Thursday, 26 January 2006, 13:32 GMT
Bono bets on Red to battle Aids
By Tim Weber
Business Editor, BBC News website, in Davos

Bono at the WEF
"We are not winning in the war against Aids."
The rock star Bono has launched a new global brand, Product Red, with a share of profits to go to the fight against Aids in Africa.

Launch partners American Express, Gap, Converse and Giorgio Armani announced a range of "red" branded products.

These will include T-shirts, footwear, sunglasses and a credit card.

The hope is that profits from the venture will generate a "sustainable" flow of money to support the Global Fund to Fight Aids, TB and Malaria.

Bono warned the world was losing the fight against HIV/Aids, with 6,500 Africans dying of the disease every day.

He stressed that this was a commercial venture and not philanthropy.

"Philanthropy is like hippy music, holding hands. Red is more like punk rock, hip hop, this should feel like hard commerce," Bono said.

Product Red wants to draw on the branding expertise and commercial might of its corporate partners, with plans that hundreds of companies could offer "red" branded products.

Red partners, in turn, hope to broaden their customer base while doing something good at the same time.

Betting on winners

Product Red was launched on the sidelines of the World Economic Forum in the Swiss mountain village of Davos.

Traditional philanthropic models simply cannot solve this problem
John Hayes, American Express

"Here we are, fat cats in the snow," said Bono at the start of the launch, only to correct himself: "I should say winners in the snow."

"I feel a bit of a fraud, a bit of a loser," he said, "because we are not winning in the war against Aids."

Every day, about 6,500 Africans are dying of HIV/Aids and 9,000 more are infected.

"I really, really hate losing," Bono said, adding that he had turned to corporate winners so that the Global Fund could make money "in the slipstream, in the wake of these companies".

Profit share

The Global Fund to fight Aids, Tuberculosis and Malaria has so far raised $4.7bn, but only $5m of that had come from corporate donors, its director Richard Feachem said.

Bono launching the Red product line
Bono helps launch the Red product line at the WEF on Thursday

If Product Red was successful, the fund could count on an innovative, large and sustainable income stream.

American Express, which will launch its no-fee "red" Amex card in the UK only, has promised that at least 1% of every pound spent will go to the global fund.

Clothing chain Gap will bring a range of "red"-branded T-shirts made in Africa into US and UK shops this spring. The autumn will see a global roll-out of a wider range of clothing products.

Nike-owned Converse will sell a range of limited edition Chuck Taylor All Star shoes, while star designer Giorgio Armani starts out with sun glasses, but plans to expand into clothing, accessories, watches, perfumes and jewellery.

On average Product Red's partners have pledged to channel about 40% of their profits to the Global Fund.

All four companies have signed up for five years, and the Product Red team hopes to sign up many more partners.

"It's going to be tough, it's a commercial venture that has to succeed," said Bobby Shriver, the driving force behind the venture and chairman of Bono's anti-poverty campaign group Data.

Conscientious commerce

American Express chief marketing officer John Hayes said corporate marketing budgets were much larger than philanthropic budgets.

"Traditional philanthropic models simply cannot solve this problem," he said.

This is "conscientious commerce that will reward both our shareholders and the global community," Mr Hayes added.

Bono rejected suggestions that he was being used by companies to restore their reputations.

"We are not endorsing their products, these products endorse us," he said.

He conceded that Product Red might make mistakes and link up with the wrong partners as the brand expanded. "But with 6,500 people dying every day, it's worth a rock star ending up with a little bit of egg on his face."

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