A brief overview of the tobacco industry in the last 20 years
ABSTRACT Since the launch of Tobacco Control 20 years ago, there have been several changes in the tobacco industry worldwide. The goal of this commentary is to present some of the keys changes of the past two decades. This time is marked by mergers and acquisitions that led to the existence, today, of four major transnational tobacco companies: Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Tobacco. The possible role of the China National Tobacco Corporation in the world tobacco market is also discussed. In addition, in the past decade there was an increase in tobacco companies' investment in non-cigarette forms of nicotine delivery. The impact of these changes for tobacco control policy is briefly discussed.
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ABSTRACT: 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.Tobacco control 03/2012; 21(2):119-26. DOI:10.1136/tobaccocontrol-2011-050397 · 5.15 Impact Factor
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ABSTRACT: East Asia is one of the world's largest tobacco epidemic regions. Although several international studies have evaluated the status of tobacco control in this region, the findings have not been integrated with knowledge on domestic activities at the national and municipal levels. We analysed the current tobacco control situation in three East Asian countries, Japan, China and the Republic of Korea, using both international and domestic data sources. We collected data between 2008 and 2011 in each country according to the framework of WHO's MPOWER (Monitoring, Protect, Offer, Warn, Enforcement and Raise) approach for guiding implementation of the WHO Framework Convention on Tobacco Control. Analysis revealed that 37-53% of adult men were current smokers and that smoking prevalence among middle-aged men reached 63%. Less than 20% of male smokers plan to quit and the use of nicotine replacement drugs was 14% at maximum. Forty-six percent or more of men and 20% or more of women were exposed to passive smoking at workplaces and at home, respectively. Many tobacco industry activities remain unrestricted and prevalent. Our findings indicate an urgent need for the following set of policies: raise cigarette prices to increase the quit attempt rate, particularly among adult men; develop a multi-component quitting assistance system to provide adequate assistance for smoking cessation; implement effective smoke-free policies in workplaces and public places to reduce exposure to passive smoking; and rebuild the administrative structure to denormalise tobacco industry activities. The importance of these standard approaches should be reaffirmed by all tobacco control policymakers in East Asia.Tobacco control 04/2013; 23(4). DOI:10.1136/tobaccocontrol-2012-050852 · 5.15 Impact Factor
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ABSTRACT: European Union (EU) legislation bans the sale of snus, a smokeless tobacco (SLT) which is considerably less harmful than smoking, in all EU countries other than Sweden. To inform the current review of this legislation, this paper aims to explore transnational tobacco company (TTC) interests in SLT and pure nicotine in Europe from the 1970s to the present, comparing them with TTCs' public claims of support for harm reduction. Internal tobacco industry documents (in total 416 documents dating from 1971 to 2009), obtained via searching the online Legacy Tobacco Documents Library, were analysed using a hermeneutic approach. This library comprises documents obtained via litigation in the US and does not include documents from Imperial Tobacco, Japan Tobacco International, or Swedish Match. To help overcome this limitation and provide more recent data, we triangulated our documentary findings with contemporary documentation including TTC investor presentations. The analysis demonstrates that British American Tobacco explored SLT opportunities in Europe from 1971 driven by regulatory threats and health concerns, both likely to impact cigarette sales negatively, and the potential to create a new form of tobacco use among those no longer interested in taking up smoking. Young people were a key target. TTCs did not, however, make SLT investments until 2002, a time when EU cigarette volumes started declining, smoke-free legislation was being introduced, and public health became interested in harm reduction. All TTCs have now invested in snus (and recently in pure nicotine), yet both early and recent snus test markets appear to have failed, and little evidence was found in TTCs' corporate materials that snus is central to their business strategy. There is clear evidence that BAT's early interest in introducing SLT in Europe was based on the potential for creating an alternative form of tobacco use in light of declining cigarette sales and social restrictions on smoking, with young people a key target. We conclude that by investing in snus, and recently nicotine, TTCs have eliminated competition between cigarettes and lower-risk products, thus helping maintain the current market balance in favour of (highly profitable) cigarettes while ensuring TTCs' long-term future should cigarette sales decline further and profit margins be eroded. Please see later in the article for the Editors' Summary.PLoS Medicine 09/2013; 10(9):e1001506. DOI:10.1371/journal.pmed.1001506 · 14.00 Impact Factor