[Intl-tobacco] UK: BAT man lives (and breathes) tobacco business

[Robert Weissman]

The Saturday Profile

BAT man lives (and breathes) tobacco business
The Times Online
September 4, 2004

By Peter Klinger

=93DO YOU mind if I smoke?=94 asks Paul Adams, as he opens a packet of Luck=
y
Strike in his seventh-floor Globe House office, just off London=92s
Embankment. Some might think it is a well-prepared opening statement for
his first interview since taking the top job at BAT, the tobacco giant.

But this is a 51-year-old man who has smoked for most of his life. Not
always Lucky Strike but now, in his glass-panelled corner office overlookin=
g
the Thames, it is Lucky Strike, one of BAT=92s four key global brands, and =
the
one plastered across Jenson Button=92s Formula One racing car.

Adams, who joined BAT in 1991, has been in charge of its global operations
for two and a half years, first as managing director and, for the past eigh=
t
months, as chief executive. In that capacity he has overseen an operation
that stretches across 180 countries and sells tobacco products worth =A325.=
6
billion every year.

But it is only with the retirement in June of Martin Broughton, his
predecessor and the former executive chairman, that Adams has been able to
step out of the shadow of the man widely credited with transforming BAT int=
o
the world=92s second-biggest tobacco company, behind Altria, the owner of
Philip Morris.

Adams is clearly irritated when asked about the difficulty of filling
Broughton=92s shoes. He believes his track record speaks for itself. =93The
thing to bear in mind is that . . . I have sort of been in that (chief
executive=92s) role for two and a half years now.

=93I don=92t have the same high profile as Martin but I am certainly known =
to
the people who need to know who I am. If Joe Bloggs on the street doesn=92t
know who I am, I don=92t think that bothers me.=94 Adams comes across as a
straight-shooter, someone who is not going to back away from an argument.

He started his working life at Shell, having ditched plans to become a
barrister and forfeited a place at Birmingham University. Although Shell
sponsored his business studies, it was the world of marketing, not oil and
gas, for which he yearned.

Colgate Palmolive, Beecham Products and finally PepsiCo gave him the chance
to make his mark in marketing. Adams saw his move from Pepsi to BAT 13
years ago simply as a jump from one consumer goods giant to another.

Today he lives and breathes BAT. He believes in the power of multinationals
and the right of companies to sell a product that is legal, despite a
growing and vocal antismoking lobby.

Does Adams believe that BAT, and the tobacco industry, are singled out
unfairly? He points out that smoking is, indeed, harmful =97 =93no one deni=
es
it=94 =97 but so are driving cars or drinking alcohol. =93I suppose the oth=
er
factor is that most people drive cars and most people drink, but only 20 to
25 per cent of people smoke.

=93Having said that, it is still a very substantial minority and if you
treated any other minority in quite the same way that smokers are treated,
there would be an absolute outcry.=94

It clearly frustrates Adams that the anti-smoking lobby has so successfully
swung government actions against the tobacco industry. He blames the World
Health Organisation for kick-starting the anti-smoking lobby.

Adams describes as wrong the decision by Ireland=92s Government to ban smok=
ing
in enclosed public places. It is tantamount, he argues, to taking away a
person=92s right of choice. And he is alarmed that the UK Government is
considering a similar move.

=93I think it=92s unnecessary and I think it=92s legislating how people sho=
uld
behave.

=93Yes, smoke in the (enclosed) atmosphere is a nuisance but there are ways=
 of
handling it. You can segregate the area. You can better ventilate the area.
You don=92t have to have smokers and non-smokers in the same room. There ar=
e
ways of handling it without banning it.=94

But, says Adams, that is all part of the challenge of running BAT. =93You t=
ell
me a large multinational (company) that doesn=92t have issues, or a
multinational industry that doesn=92t have issues. You think the car indust=
ry
doesn=92t have issues? Pharmaceuticals? Food? Drink? Everyone has substanti=
al
issues, indeed even controversies. You run a large multinational and you
have to deal with those issues.=94

One of the tasks Adams has set himself is to integrate BAT=92s global
operations, such as streamlining a worldwide suite of cigarette factories
and better utilising the group=92s global purchasing power.

He sees China, where BAT hopes to become the first foreign tobacco company
to establish a beach-head, as a big challenge, but gives warning that
success there is still some way off. China accounts for a third of the worl=
d
=92s cigarette consumption. It is the =93holy grail=94 for tobacco companie=
s.

News, two months ago, that BAT had been granted approval by Beijing to
establish a big manufacturing and distribution base in China was applauded
by investors.

Applause turned to incredulity when, a few days later, the State Tobacco
Monopoly Administration, which oversees the industry in China, denied it ha=
d
signed a deal with BAT.

=93We have been very diligent and explained that we did not do a deal in
China. We=92ve got approval to do a deal in China. The deal is yet to be
negotiated (but) we remain optimistic.

=93We have got to find a location for a factory and we have to determine a
means of distributing the product that is produced by this factory. And we
have to wrap that up into some sort of deal.

=93So there=92s a long way to go, and some sizeable hurdles, and it will ta=
ke
time. And then people say how much time, and the answer is I don=92t know.
Things in China take some time.=94

Adams has given himself seven years to stamp his mark on BAT. That, he
believes, is about the right shelf life for a chief executive.

=93Not that that=92s to say it=92s inappropriate to stay for longer than se=
ven
years but I think it=92s worth a thought as to whether you should be stayin=
g
on.=94

CV: Paul Adams

Age: 51.
Born: Manchester.
Married with three children.
Lives: Surrey.
Salary: =A31.4 million.
Educated: Bachelor of Business, Ealing College.
Currently: chief executive of British American Tobacco since January;
non-executive director of Allied Domecq; executive board member of
TransAtlantic Business Dialogue; member of Trilateral Commission; founding
member of Global Business Leaders Alliance Against Counterfeiting.
Previously: joined BAT 1991 as regional director, Asia Pacific. Appointed
regional director, Europe, in 1999 and group managing director in 2002.
Joined BAT from Pepsi Cola International. Before that, worked for Beecham
Products, Colgate Palmolive and Shell.
Hobbies: family, theatre, rugby and shooting.

HOME TRUTHS

On smoking:
=93There are significant health risks with tobacco, everyone knows that, no
one denies it.=94

On suitable employees in the tobacco industry:
=93Tobacco is not politically correct, and if you are worried about politic=
al
correctness, you shouldn=92t be in the tobacco industry.=94

On why he=92s not a lawyer:
=93My chances of being a successful businessman were probably better than
being a successful barrister.=94

On the prospect of his children smoking:
=93My children are still relatively young, still at school and under 18, so=
 it
=92s a slightly premature discussion to have . . . one would hope. What I h=
ave
said to them is that it=92s their choice but I don=92t want them smoking un=
til
they are 18, because I don=92t think they are old enough to make that
decision, and they shouldn=92t be smoking at school anyway.=94