Pushing up smoking incidence: plans for a privatised tobacco industry in Moldova

Tobacco control in Nepal during a time of government turmoil (1960-2006)

BACKGROUND

Nepal was a monarchy, then a dictatorship, then a democracy. This paper reviews how tobacco control progressed in Nepal in the context of these changes in government from 1950 through 2006.

METHODS

We triangulated tobacco industry documents, newspaper articles and key informant interviews.

RESULTS

Until 1983, the tobacco industry was mostly state owned. Transnational tobacco companies entered the Nepalese market through ventures with Surya Tobacco Company Private Limited (with Imperial Tobacco Company and British American Tobacco) in 1983 and Seti Cigarette Factory Limited (with Philip Morris International [PMI]) in 1985. Seminars and conferences on tobacco, celebrations of World No Tobacco Day (WNTD) and efforts by WHO helped promote tobacco control in Nepal beginning in the 1970s. Tobacco advocates in Nepal pushed the government to issue executive orders banning smoking in public places in 1992 and tobacco advertising in electronic media in 1998, and to introduce a tobacco health tax in 1993. The tobacco industry lobbied against these measures and succeeded in keeping the tobacco tax low by challenging it in court. Tobacco advocates sued the government in 2003 and 2005, resulting in a June 2006 Supreme Court decision upholding the smoking and advertising bans and requiring the government to enact a comprehensive tobacco control law.

CONCLUSIONS

Political instability, conflict, weak governance and the dictatorship significantly affect tobacco control activities in low-income and middle-income countries. Nepal shows that tobacco control advocates can take advantage of global events, such as WNTD, and use domestic litigation to maintain support from civil societies and to advocate for stronger tobacco control policies.

Anti-tobacco control industry strategies in Turkey

BACKGROUND

Transnational tobacco companies (TTCs) penetrated the Turkish cigarette market due to trade and investment liberalization in the post-1980 period and eventually secured full control. Despite tobacco control policies put in place in reaction to accelerating consumption, TTCs reinforced their market power through a variety of strategies. This paper explores industry strategies that counteract tobacco control policies in Turkey.

METHODS

The study employs both qualitative and quantitative analyses to explore industry strategies in Turkey. Besides the content analyses of industry and market reports, descriptive analyses were conducted for the sub-periods of 1999-2015. The analyses focus on the market strategies of product innovation, advertisement-promotion, cost management and pricing.

RESULTS

Rising sales of low tar, ultra-low tar, slim, super-slim and flavoured cigarettes indicate that product innovation served to sustain consumption. Besides, the tobacco industry, using its strong distribution channels, the Internet, and CSR projects, were found to have promoted smoking indirectly. The industry also rationalized manufacturing facilities and reduced the cost of tobacco, making Turkey a cigarette-manufacturing base. Tobacco manufacturers, moreover, offered cigarettes in different price segments and adjusted net prices both up and down according to price categories and market conditions. In response to the successful effect of shifts in price margins, the market share of mid-priced cigarettes expanded while those within the economy category maintained the highest market share. As a result of pricing strategies, net sales revenues increased. Aside from official cigarette sales, the upward trends in the registered and unregistered sales of cigarette substitutes indicate that the demand-side tobacco control efforts remain inadequate.

CONCLUSIONS

The Turkish case reveals that the resilience of the tobacco industry vis-à-vis mainstream tobacco control efforts necessitates a new policy perspective. Rising market concentration by TTCs and the global nature of industry strategies require that the highly profitable manufacturing and trade of tobacco products should be discouraged on a basis of international collaboration. To reduce and eventually eradicate tobacco consumption, supply-side tobacco control measures are needed along with demand-side policies.

The Policy Dystopia Model: An Interpretive Analysis of Tobacco Industry Political Activity

BACKGROUND

Tobacco industry interference has been identified as the greatest obstacle to the implementation of evidence-based measures to reduce tobacco use. Understanding and addressing industry interference in public health policy-making is therefore crucial. Existing conceptualisations of corporate political activity (CPA) are embedded in a business perspective and do not attend to CPA's social and public health costs; most have not drawn on the unique resource represented by internal tobacco industry documents. Building on this literature, including systematic reviews, we develop a critically informed conceptual model of tobacco industry political activity.

METHODS AND FINDINGS

We thematically analysed published papers included in two systematic reviews examining tobacco industry influence on taxation and marketing of tobacco; we included 45 of 46 papers in the former category and 20 of 48 papers in the latter (n = 65). We used a grounded theory approach to build taxonomies of "discursive" (argument-based) and "instrumental" (action-based) industry strategies and from these devised the Policy Dystopia Model, which shows that the industry, working through different constituencies, constructs a metanarrative to argue that proposed policies will lead to a dysfunctional future of policy failure and widely dispersed adverse social and economic consequences. Simultaneously, it uses diverse, interlocking insider and outsider instrumental strategies to disseminate this narrative and enhance its persuasiveness in order to secure its preferred policy outcomes. Limitations are that many papers were historical (some dating back to the 1970s) and focused on high-income regions.

CONCLUSIONS

The model provides an evidence-based, accessible way of understanding diverse corporate political strategies. It should enable public health actors and officials to preempt these strategies and develop realistic assessments of the industry's claims.

Tobacco industry globalization and global health governance: towards an interdisciplinary research agenda

Shifting patterns of tobacco production and consumption, and the resultant disease burden worldwide since the late twentieth century, prompted efforts to strengthen global health governance through adoption of the Framework Convention on Tobacco Control. While the treaty is rightfully considered an important achievement, to address a neglected public health issue through collective action, evidence suggests that tobacco industry globalization continues apace. In this article, we provide a systematic review of the public health literature and reveal definitional and measurement imprecision, ahistorical timeframes, transnational tobacco companies and the state as the primary units and levels of analysis, and a strong emphasis on agency as opposed to structural power. Drawing on the study of globalization in international political economy and business studies, we identify opportunities to expand analysis along each of these dimensions. We conclude that this expanded and interdisciplinary research agenda provides the potential for fuller understanding of the dual and dynamic relationship between the tobacco industry and globalization. Deeper analysis of how the industry has adapted to globalization over time, as well as how the industry has influenced the nature and trajectory of globalization, is essential for building effective global governance responses. This article is published as part of a thematic collection dedicated to global governance.

The environmental profile of a community's health: a cross-sectional study on tobacco marketing in 16 countries

OBJECTIVE

To examine and compare tobacco marketing in 16 countries while the Framework Convention on Tobacco Control requires parties to implement a comprehensive ban on such marketing.

METHODS

Between 2009 and 2012, a kilometre-long walk was completed by trained investigators in 462 communities across 16 countries to collect data on tobacco marketing. We interviewed community members about their exposure to traditional and non-traditional marketing in the previous six months. To examine differences in marketing between urban and rural communities and between high-, middle- and low-income countries, we used multilevel regression models controlling for potential confounders.

FINDINGS

Compared with high-income countries, the number of tobacco advertisements observed was 81 times higher in low-income countries (incidence rate ratio, IRR: 80.98; 95% confidence interval, CI: 4.15-1578.42) and the number of tobacco outlets was 2.5 times higher in both low- and lower-middle-income countries (IRR: 2.58; 95% CI: 1.17-5.67 and IRR: 2.52; CI: 1.23-5.17, respectively). Of the 11,842 interviewees, 1184 (10%) reported seeing at least five types of tobacco marketing. Self-reported exposure to at least one type of traditional marketing was 10 times higher in low-income countries than in high-income countries (odds ratio, OR: 9.77; 95% CI: 1.24-76.77). For almost all measures, marketing exposure was significantly lower in the rural communities than in the urban communities.

CONCLUSION

Despite global legislation to limit tobacco marketing, it appears ubiquitous. The frequency and type of tobacco marketing varies on the national level by income group and by community type, appearing to be greatest in low-income countries and urban communities.

Exposing and addressing tobacco industry conduct in low-income and middle-income countries

The tobacco industry's future depends on increasing tobacco use in low-income and middle-income countries (LMICs), which face a growing burden of tobacco-related disease, yet have potential to prevent full-scale escalation of this epidemic. To drive up sales the industry markets its products heavily, deliberately targeting non-smokers and keeps prices low until smoking and local economies are sufficiently established to drive prices and profits up. The industry systematically flaunts existing tobacco control legislation and works aggressively to prevent future policies using its resource advantage to present highly misleading economic arguments, rebrand political activities as corporate social responsibility, and establish and use third parties to make its arguments more palatable. Increasingly it is using domestic litigation and international arbitration to bully LMICs from implementing effective policies and hijacking the problem of tobacco smuggling for policy gain, attempting to put itself in control of an illegal trade in which there is overwhelming historical evidence of its complicity. Progress will not be realised until tobacco industry interference is actively addressed as outlined in Article 5.3 of the Framework Convention on Tobacco Control. Exemplar LMICs show this action can be achieved and indicate that exposing tobacco industry misconduct is an essential first step.

Tobacco control efforts in Europe

Smoking is prevalent across Europe, but the severity and stage of the smoking epidemic, and policy responses to it, vary substantially between countries. Much progress is now being made in prohibition of paid-for advertising and in promotion of smoke-free policies, but mass media campaigns are widely underused, provision of services for smokers trying to quit is generally poor, and price policies are undermined by licit and illicit cheap supplies. Monitoring of prevalence is inadequate in many countries, as is investment in research and capacity to address this largest avoidable cause of death and disability across Europe. However, grounds for optimism are provided by progress in implementation of the WHO Framework Convention on Tobacco Control, and in the development of a new generation of nicotine-containing devices that could enable more widespread adoption of harm-reduction strategies. The effect of commercial vested interests has been and remains a major barrier to progress.

What is known about tobacco industry efforts to influence tobacco tax? A systematic review of empirical studies

OBJECTIVE

To systematically review studies of tobacco industry efforts to influence tobacco tax policies.

METHODS

Searches were conducted between 1 October 2009 and 31 March 2010 in 14 databases/websites, in relevant bibliographies and via experts. Studies were included if they focused on industry efforts to influence tobacco tax policies, drew on empirical evidence, were in English and concerned the period 1985-2010. In total, 36 studies met these criteria. Two reviewers undertook data extraction and critical appraisal. A random selection of 15 studies (42%) was subject to second review. Evidence was assessed thematically to identify distinct tobacco industry aims, arguments and tactics.

RESULTS

A total of 34 studies examined industry efforts to influence tax levels. They suggest the tobacco industry works hard to prevent significant increases and particularly dislikes taxes 'earmarked' for tobacco control. Key arguments to counter increases are that tobacco taxes are socially regressive, unfair and lead to increased levels of illicit trade and negative economic impacts. For earmarked taxes, the industry also frequently tries to raise concerns about revenue allocation. Assessing industry arguments against established evidence demonstrates most are unsupported. Key industry tactics include: establishing 'front groups', securing credible allies, direct lobbying and publicity campaigns. Only seven studies examined efforts to influence tax structures. They suggest company preferences vary and tactics centre on direct lobbying.

CONCLUSIONS

The tobacco industry has historically tried to keep tobacco taxes low using consistent tactics and misleading arguments. Further research is required to explore efforts to influence tax structures, excise policies beyond the USA and recent policies.

Understanding the vector in order to plan effective tobacco control policies: an analysis of contemporary tobacco industry materials

This paper builds on tobacco document research by analysing contemporary materials to explore how the global tobacco market has changed, how transnational tobacco companies (TTCs) are responding and the implications for tobacco control. The methods involved analysis of a variety of materials, including tobacco company annual reports, investor relations materials, financial analyst reports, market research reports and data. Once China, where TTCs have little market share, is excluded, global cigarette volumes are already declining. Nevertheless, industry profits continue to increase. This pattern is explained by the pricing power of TTCs-their ability to increase prices faster than volumes fall, a consequence of market failure. Pricing power is now fundamental to the long term future of TTCs. Consequently, and in light of growing regulations, the business model of the TTCs is changing. Product innovation is now a key marketing technique used to drive consumers to buy more expensive (ie, profitable) premium cigarettes. Contrary to established wisdom, high tobacco excise rates, particularly where increases in excise are gradual, can benefit TTCs by enabling price (profit) increases to be disguised. Large intermittent tax increases likely have a greater public health benefit. TTC investments in smokeless tobacco appear designed to eliminate competition between smokeless tobacco and cigarettes, thereby increasing the pricing power of TTCs while enabling them to harness the rhetoric of harm reduction. Monitoring TTCs can inform effective policy development. The value maximising approach of TTCs suggests that a ban on product innovation and more informed tobacco excise policies are needed.

The vector of the tobacco epidemic: tobacco industry practices in low and middle-income countries

PURPOSE

To understand transnational tobacco companies' (TTCs) practices in low and middle-income countries which serve to block tobacco-control policies and promote tobacco use.

METHODS

Systematic review of published research on tobacco industry activities to promote tobacco use and oppose tobacco-control policies in low and middle-income countries.

RESULTS

TTCs' strategies used in low and middle-income countries followed four main themes-economic activity; marketing/promotion; political activity; and deceptive/manipulative activity. Economic activity, including foreign investment and smuggling, was used to enter new markets. Political activities included lobbying, offering voluntary self-regulatory codes, and mounting corporate social responsibility campaigns. Deceptive activities included manipulation of science and use of third-party allies to oppose smoke-free policies, delay other tobacco-control policies, and maintain support of policymakers and the public for a pro-tobacco industry policy environment. TTCs used tactics for marketing, advertising, and promoting their brands that were tailored to specific market environments. These activities included direct and indirect tactis, targeting particular populations, and introducing new tobacco products designed to limit marketing restrictions and taxes, maintain the social acceptability of tobacco use, and counter tobacco-control efforts.

CONCLUSIONS

TTCs have used similar strategies in high-income countries as these being described in low and middle-income countries. As required by FCTC Article 5.3, to counter tobacco industry pressures and to implement effective tobacco-control policies, governments and health professionals in low and middle-income countries should fully understand TTCs practices and counter them.

A review of the impacts of tobacco industry privatisation: Implications for policy

State-owned tobacco companies, which still account for 40% of global cigarette production, face continued pressure from, among others, the International Monetary Fund (IMF), to be privatised. This review of available literature on tobacco industry privatisation suggests that any economic benefits of privatisation may be lower than supposed, because private owners avoid competitive tenders (thus underpaying for assets), negotiate lengthy tax holidays and are complicit in the smuggling of cigarettes to avoid import and excise duties. It outlines how privatisation leads to increased marketing, more effective distribution and lower prices, creating additional demand for cigarettes among new and existing smokers, leading to increased cigarette consumption, higher smoking prevalence and lower age of smoking initiation. Privatisation also weakens tobacco control because private owners, in their drive for profits, lobby aggressively against effective policies and ignore or overturn existing policies. This evidence suggests that further tobacco industry privatisation is likely to increase smoking and that instead of transferring assets from state to private ownership, alternative models of supply should be explored.

The International Monetary Fund's effects on global health: before and after the 2008 financial crisis

In April 2009, the G20 countries committed US $750 billion to the International Monetary Fund (IMF), which has assumed a central role in global economic management. The IMF provides loans to financially ailing countries, but with strict conditions, typically involving a mix of privatization, liberalization, and fiscal austerity programs. These loan conditions have been extremely controversial. In principle, they are designed to help countries balance their books. In practice, they often translate into reductions in social spending, including spending on public health and health care delivery. As more countries are being exposed to IMF policies, there is a need to establish what we know and do not know about the IMF's effects on global health. This article introduces a series in which contributors review the evidence on the relationship between the IMF and public health and discuss potential ways to improve the Fund's effects on health. While more evidence is needed for some regions, there is sufficient evidence to indicate that IMF programs have been significantly associated with weakened health care systems, reduced effectiveness of health-focused development aid, and impeded efforts to control tobacco, infectious diseases, and child and maternal mortality. Reforms are urgently needed to prevent the current wave of IMF programs from further undermining public health in financially ailing countries and limiting progress toward the health Millennium Development Goals.

The International Monetary Fund and Tobacco: A Product like Any Other?

The International Monetary Fund (IMF) has promoted the lifting of trade restrictions on tobacco and the privatization of state-owned tobacco industries as part of its loan conditions. Growing evidence shows that tobacco industry privatization stimulates tobacco consumption and smoking prevalence in borrowing countries. Privatized tobacco companies make favorable tobacco control policies a condition of their investment and lobby aggressively against further control measures. This, along with increased efficiency of the private sector, leads to increases in marketing, substantial reductions in excise taxes, drops in cigarette prices, and overall rises in sales of cigarettes. The actions of the IMF have therefore led to substantially greater use of tobacco, a product that kills half of its consumers when used as intended, with little evidence of economic gain.

British American Tobacco's failure in Turkey

BACKGROUND AND OBJECTIVES

Transnational tobacco companies (TTCs) considered Turkey an important, potential investment market because of its high consumption rates and domestic commitment to tobacco. This paper outlines how British American Tobacco (BAT) attempted to establish a joint venture with the government monopoly TEKEL, while waiting for privatisation and a private tender.

METHODS

Analysis of tobacco industry documents from the Guildford Depository and online tobacco document sources.

RESULTS

BAT failed to establish a market share in Turkey until 2000 despite repeated attempts to form a joint venture with Turkey's tobacco monopoly, TEKEL, once the market liberalised in the mid 1980s.

CONCLUSIONS

BAT's failure in the Turkish market was due to a misguided investment strategy focused solely on acquiring TEKEL and is contrasted with Philip Morris success in Turkey despite both TTCs working within Turkey's unstable and corrupt investing climate.

Transnational tobacco company influence on tax policy during privatization of a state monopoly: British American Tobacco and Uzbekistan

OBJECTIVES

The International Monetary Fund encourages privatization of state-owned tobacco industries. Privatization tends to lower cigarette prices, which encourages consumption. This could be countered with effective tax policies. We explored how investment by British American Tobacco (BAT) influenced tax policy in Uzbekistan during privatization there.

METHODS

We obtained internal documents from BAT and analyzed them using a hermeneutic process to create a chronology of events.

RESULTS

BAT thoroughly redesigned the tobacco taxation system in Uzbekistan. It secured (1) a reduction of approximately 50% in the excise tax on cigarettes, (2) an excise system to benefit its brands and disadvantage those of its competitors (particularly Philip Morris), and (3) a tax stamp system from which it hoped to be exempted, because this would likely facilitate its established practice of cigarette smuggling and further its competitive advantage..

CONCLUSIONS

Privatization can endanger effective tobacco excise policies. The International Monetary Fund should review its approach to privatization and differentiate the privatization of an industry whose product kills from privatization of other industries.

Trends in the prevalence of smoking in Russia during the transition to a market economy

BACKGROUND

Changes in smoking, particularly an increase in women, were predicted to follow the aggressive campaigns of multinational tobacco companies in transitional Russia. However, such changes have not yet been demonstrated unequivocally.

OBJECTIVE

To examine smoking trends by gender, education and area of residence.

METHODS

Data from 10 rounds of the Russia Longitudinal Monitoring Survey (1992-2003), consisting of more than 3000 men and 4000 women in each round, were used. The mean reported ages of first smoking in current smokers were compared between 10-year birth cohorts.

RESULTS

Between 1992 and 2003, smoking prevalence doubled among women from 6.9% (95% CI 6.3% to 7.6%) to 14.8% (13.9% to 15.7%) and increased among men from 57.4% (95% CI 56.0% to 58.8%) to 62.6% (61.1% to 64.1%). In both sexes, the rise was significantly greater in the least educated, markedly so in women (a doubling vs a 1.5-fold rise in the most educated). Although prevalence of smoking among women was considerably higher in Moscow and St Petersburg than in rural areas, the dramatic threefold increase in prevalence in rural women was significantly greater than in the main cities (36%, p<0.001). The mean age of first smoking was significantly lower in women born after 1960, but in men it was stable between cohorts.

CONCLUSIONS

For the first time, it has been shown unequivocally that smoking among women increased markedly during the transition to a market economy in Russia. The already high prevalence of smoking among men has continued to rise. These changes are likely to reflect the activity of the tobacco industry and provide further evidence of the harms of privatisation. Effective tobacco control policies are urgently needed.

The invisible hand: how British American Tobacco precluded competition in Uzbekistan

BACKGROUND

Tobacco industry documents provide a unique opportunity to explore the role transnational corporations (TNCs) played in shaping the poor outcomes of privatisation in the former Soviet Union (FSU). This paper examines British American Tobacco's (BAT's) business conduct in Uzbekistan where large-scale smuggling of BAT's cigarettes, BAT's reversal of tobacco control legislation and its human rights abuses of tobacco farmers have been documented previously. This paper focuses, instead, on BAT's attitude to competition, compares BAT's conduct with international standards and assesses its influence on the privatisation process.

METHODS

Analysis of BAT documents released through litigation.

RESULTS

BAT secured sole negotiator status precluding the Uzbekistan government from initiating discussions with other parties. Recognising that a competitive tender would greatly increase the cost of investment, BAT went to great lengths to avoid one, ultimately securing President Karimov's support and negotiating a monopoly position in a closed deal. It simultaneously secured exclusion from the monopolies committee, ensuring freedom to set prices, on the basis of a spurious argument that competition would exist from imports. Other anticompetitive moves comprised including all three plants in the deal despite intending to close down two, exclusive dealing and implementing measures designed to prevent market entry by competitors. BAT also secured a large number of exemptions and privileges that further reduced the government's revenue both on a one-off and ongoing basis.

CONCLUSIONS

BAT's corporate misbehaviour included a wide number of anticompetitive practices, contravened Organisation of Economic Cooperation and Development's and BAT's own business standards on competition and restricted revenue arising from privatisation. This suggests that TNCs have contributed to the failure of privatisation in the FSU. Conducting open tenders and using enforceable codes to regulate corporate conduct would help deal with some of the problems identified.

"The law was actually drafted by us but the Government is to be congratulated on its wise actions": British American Tobacco and public policy in Kenya

BACKGROUND AND OBJECTIVE

British American Tobacco (BAT) has historically enjoyed a monopoly position in Kenya. Analysis of recent tobacco control debates and a case study of BAT's response to the emergence of competition in Kenya are used to explore the company's ability to shape public policy and its treatment of tobacco farmers.

DESIGN

Analysis of internal industry documents from BAT's Guildford depository, other relevant data and interviews with key informants.

RESULTS

BAT enjoys extensive high-level political connections in Kenya, including close relationships with successive Kenyan presidents. Such links seems to have been used to influence public policy. Health legislation has been diluted and delayed, and when a competitor emerged in the market, BAT used its contacts to have the government pass legislation drafted by BAT that compelled farmers to sell tobacco to BAT rather than to its competitor. BAT was already paying farmers less than any other African leaf-growing company, and the legislation entrenched poor pay and a quasi-feudal relationship. BAT's public relation's response to the threat of competition and the ministers' public statements extolling the economic importance of tobacco growing suggest that BAT has manipulated tobacco farming as a political issue.

CONCLUSIONS

The extent of BAT's influence over public policy is consistent with the observations that, despite ratifying the Framework Convention on Tobacco Control, progress in implementing tobacco control measures in Kenya has been limited. The benefits of tobacco farming seem to be deliberately exaggerated, and an analysis of its true cost benefits is urgently needed. Tobacco farmers must be protected against BAT's predatory practices and fully informed about its activities to help them have an informed role in policy debates. As image, particularly around the importance of tobacco farming, seems key to BAT's ability to influence policy, the truth about its treatment of farmers must be publicised.

Changes in smoking prevalence in Russia, 1996-2004

OBJECTIVES

In Russia, smoking prevalence has historically been high in men and relatively low in women. Female smoking prevalence is predicted to rise but assessment of changes has been limited by the lack of comparable data. Changes in the prevalence of smoking in Russia between 1996 and 2004, and whether theses changes differed by sociodemographic groups, were investigated.

DESIGN

Repeated national interview surveys in 1996 (731 men and 868 women) and 2004 (727 men and 864 women) aged 18 years or more.

MAIN OUTCOME MEASURE

Prevalence of current smoking.

RESULTS

The age standardised prevalence of smoking in 1996 and 2004 was 61% and 63%, respectively in men and 15% and 16%, respectively in women (both p values > 0.4). In men, the prevalence of smoking seemed to decline in those with university education (from 51% to 40%, p = 0.085). Among women, smoking appeared to increase in those with university education (from 10% to 17%, p = 0.071) and low levels of self-reported material deprivation (from 11% to 18%, p = 0.053). There was a pronounced increase in prevalence among women living in villages (from 8% to 14%, p = 0.049); the strong urban/rural gradient seen in 1996 became considerably weaker by 2004.

CONCLUSIONS

Overall smoking prevalence in both men and women in Russia remained stable between 1996 and 2004 but, given the sample size, a moderate increase in female smoking cannot be ruled out. In men, smoking increased among the least educated and declined in the most educated. In women the opposite appeared to occur, in addition to an increase in smoking in rural areas. More long term monitoring of smoking patterns in Russia, especially among women, using sufficiently large surveys, is required.