[Intl-tobacco] Tobacco Industry Smuggling Former Soviet Union

Thu, 03 Jun 2004 20:48:14 -0400

http://www.newswise.com/articles/view/505239/?sc=wire

Source: University of London School of Hygiene and Tropical Medicine
Released: Fri 28-May-2004, 00:00 ET

Embargo expired: Tue 01-Jun-2004, 00:00 ET

Underhand Activities by Tobacco Companies Rife in Former Soviet Union

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Medical News Keywords
TOBACCO INDUSTRY SMUGGLING FORMER SOVIET UNION

Description

British American Tobacco engaged in underhand practices including smuggling,
and exploited the weak political and economic situation in the former Soviet
Union to establish cigarette imports and local manufacturing, new research
reveals today.

Newswise

British American Tobacco engaged in underhand practices including smuggling,
and exploited the weak political and economic situation in the former Soviet
Union to establish cigarette imports
and local manufacturing, new research reveals today.

The revelations, which are published today in a series of papers (i, ii,
iii) in the journal Tobacco Control (http://tc.bmjjournals.com/), came to
light as a result of a review of data on industry investments and their
impact on cigarette production capacity, as well as a meticulous trawl by
authors Anna Gilmore and Martin McKee of the London School of Hygiene &
Tropical Medicine (LSHTM) through hundreds of documents housed within
British American Tobacco (BAT)s secretive depository in Guildford, UK.

The authors are calling for a renewed effort to build capacity in transition
economies so that governments are better able to respond when companies use
business practices that fall short of international standards. Countries
targeted by the tobacco industry need to be aware of its tactics and develop
effective tobacco control policies
to ensure that vulnerable populations can no longer be targeted in the ways
detailed in these papers, says Dr Anna Gilmore, a Clinical Lecturer in
Public Health and lead author on the papers.

The countries of the former Soviet Union (FSU) have been a key focus for
tobacco industry investments over the last decade. Between 1992, when the
first tobacco investments occurred and the end of 2000,
transnational tobacco companies (TTCs) invested at least US$2.7 billion in
10 countries in the region. These papers detail how they took advantage of a
number of key factors to establish imports: a
chaotic tobacco industry, which under the Soviet system had been state
owned; chronic cigarette shortages; a desire among the population for
western goods which were seen as sophisticated and
desirable; and the naivety of the post-Soviet governments as to the
underhand conduct of powerful transnationals.

These documents provide key insights into the thinking behind the
transnational tobacco companies focus on the former Soviet Union market, and
highlight the elaborate and devious tactics used to
establish imports. The Guildford papers specifically reveal how BAT
exploited chaotic situation in the immediate post-transition period to
ensure illegal cigarette imports, and how they targeted
a susceptible population which was hungry for western products by equating
smoking with western sophistication, says Dr Anna Gilmore.

BAT is revealed to have used flawed economic arguments to persuade
inexperienced and nave governments that allowing them to invest
would reap economic benefits. Company representatives offered misleading
excise advice that actually disadvantaged governments
while benefiting BAT. BAT was able to operate in this manner because
international financial organisations such as the International
Monetary Fund took the view that rapid economic reform should be actively
championed, regardless of the nature of the investing company or the product
it sold.

The Guildford papers also reveal how BAT identified women as an important
new market. Smoking among women had been rare in the FSU, yet BAT noted that
women, in common with other young smokers, were
more likely to smoke international filter brands rather than locally
produced cigarettes. BAT specifically targeted women in its marketing
and female smoking rates are now rising. Men in the FSU already have the
highest rates of premature mortality in Europe and if female smoking
continues to increase, female death rates from tobacco will certainly rise.

As notable as the industrys focus on the economic impacts of tobacco was the
total absence of any debate about tobaccos health impacts, say the authors.
Thus, as far as we can tell, the governments of the newly independent states
received little if any effective tobacco control advice or appropriate
information on the true health and
economic impacts of tobacco.

BAT is spending heavily on image rehabilitation in an attempt to convince us
that things are different now, but all the evidence suggests the company is
still operating in the way it always has and is now turning its attentions
towards developing markets
elsewhere. The global public health burden from tobacco is set to double
between 2000 and 2030 from 4.9 to 10 million deaths, with the most rapid
increases predicted in developing countries. Such
countries need to be vary wary of the predations of BAT and its competitors,
concludes Anna Gilmore.

i Gilmore A, McKee M;. Tobaco and transition: an overview of industry
investments, impact and influence in the former Soviet Union. Tobacco
Control 2004;12:

ii Gilmore A, McKee M. Moving east: how the transational tobacco companies
gained entry to the emerging markets of the former Soviet Union. Part I:
Establishing cigarette imports. Tobacco Control 2004; 12

iii Gilmore A, McKee M. Moving east: how the transnational tobacco companies
gained entry to the emerging markets of the former Soviet Union. Part II: an
overview of priorities and tactics used to
establish a manufacturing presence. Tobacco Control 2004; 12