British American Tobacco

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Background

British American Tobacco (BAT) was established in 1902 when the UK’s Imperial Tobacco Company and the US’s American Tobacco Company formed a new joint venture.[1] Headquartered in London (UK), its businesses operate in Australasia, Africa, Europe and America.[2] It is the second largest tobacco company in the world, after Philip Morris International (PMI) and excluding the Chinese National Tobacco Corporation (CNTC).[3] In its Business Company Profile 2017, BAT reported it sold 300 tobacco brands in 180 markets and had a 15% share in the global tobacco market.[4] Popular BAT cigarette brands include Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans. [5]

In 2017, BAT held international interests with three other tobacco companies:[6]

  • Reynolds American Inc. (RAI): BAT owns 42.2% of RAI’s shares. BAT announced in January 2017 that it had agreed to acquire the remaining 57.8% stake it did not yet own.[7] This acquisition is expected to be completed in the third quarter of 2017.
  • ITC Private Limited (formerly known as the Indian Tobacco Company Private Limited ): In 1985, BAT and ITC set up a joint venture in Nepal, the Surya Nepal Private Limited (Surya Nepal).[8][9] BAT owns 29.7% of ITC shares.[10][11] According to media reports, BAT unsuccessfully attempted to increase its stake in ITC on several occasions.[12][13][14]
  • CNTC: in August 2013 BAT and CNTC established a joint venture named CTBAT, which is headquartered in Hong Kong.

In 1961, BAT diversified into paper, cosmetics and food industries. It also entered the retail industry acquiring Argos and Saks Fifth Avenue in the UK and US respectively. In the late 1980s, BAT moved into the insurance industry, acquiring Eagle Star, Allied Dunbar and Farmer’s Group in the UK. In the late 1990s BAT industries divested its non-tobacco business.[1]

In 2017, BAT also owned the following non-cigarette producing companies:

It also founded and wholly owns:

  • Nicoventures Ltd – dedicated to the production of unlicensed nicotine products.[15]
  • Nicovations Ltd - a separately run component of Nicoventures Ltd that produces ’regulatory approved’ inhaled nicotine products (for example, products licenced by the UK Medicines and Healthcare products Regulatory Agency).[15]

Employees: Past and Present

Nicandro Durante became BAT's Chief Executive Officer in 2011.

A complete list of BAT's Board of Directors can be found on the BAT website.

Other persons that currently work for, or have previously been employed with, the company:

Jack Bowles | Jeffries Briginshaw | Richard Burrows | Jeannie Cameron (see JCIC International) | Kenneth Clarke | Mark Cobben | David Crow | Nicandro Durante | David Fell | Ann Godbehere | Giovanni Giordano | Andrew Gray | Tomas Hammargren | Robert Lerwill | Jean-Marc Lévy | Adrian Marshall | Des Naughton | Christine Morin-Postel | Gerard Murphy | Shabanji Opukah | David O’Reilly | Kieran Poynter | Michael Prideaux | Anthony Ruys | Nicholas Scheele | Karen de Segundo | Naresh Sethi | Ben Stevens | Kingsley Wheaton | Neil Withington

Affiliations

Memberships and Partnerships

In 2017, BAT disclosed it was a member of the following associations:[16]

The American Chamber of Commerce to the European Union | American European Community Association | British Chamber of Commerce in Belgium | BusinessEurope | European Policy Centre | Confederation of British Industry | European Risk Forum | Ad Hoc Council (The European Government Business Relations Council) | Confederation of European Community Cigarette Manufacturers (CECCM) | European Smoking Tobacco Association (ESTA) | European Smokeless Tobacco Council (ESTOC) | International Chamber of Commerce (ICC) | International Trademark Association | ICC Business Action to Stop Counterfeiting and Piracy (BASCAP) | Kangaroo Group | The Mentor Group | Tobacco Industry Platform (TIP) | Transatlantic Business Dialogue | Tobaksproducenterne (Tobacco Manufacturers Denmark) | Tobacco Manufacturers' Association (TMA)

BAT is also member of the Association of Convenience Stores and the Eliminating Child Labour in Tobacco Growing Foundation (ECLT).[17] The ECLT has a partnership with the International Labour Organization (ILO), a United Nations (UN) agency, focussed on issues related to labour such as international labour standards, social protection and unemployment.[18]

BAT has previously been a member of the following associations:

Confederation of British Industry | Czech Association for Branded Products | European Travel Retail Confederation | Federation of Wholesale Distributors | MARQUES | Scottish Grocers' Federation | Scottish Wholesale Association | Unite

In addition to the aforementioned memberships, BAT has provided financial support to:

Alliance of Australian Retailers | Anti-Counterfeiting Group | Benkert | Business Action for Africa[19] | Associate Parliamentary Corporate Responsibility Group | Business in the Community (UK) | Commonwealth Business Council | Conference Board[20] | European Council on Research, Development and Innovation[21] | European Science and Environment Forum | Forest | Forum for EU/US Legal-Economic Affairs | Global Reporting Initiative | Institute of Business Ethics | International Tax and Investment Center | International Tobacco Growers Association | The Common Sense Alliance | Rural Shops Alliance | VNO-NCW

Consultancies

Think Tanks

The following think tanks have a history of being funded by BAT:

Centre for European Reform | Centre for Policy Studies | Chatham House | European Policy Centre | European Science and Environment Forum | Fraser Institute | Institute of Economic Affairs | Institute of Public Affairs | Niagara Institute (See John Luik)

Controversial Marketing Strategies

Targeting Women and Girls

Targeting Youth

Although BAT has stated that it is ‘committed to carry out youth smoking prevention’, the company has been accused of targeting youth in their marketing activities.[29][30]

Some of the countries where the company has been accused of such tactics, include: Argentina[31], Brazil[30], Ethiopia[32], Malawi[33], Mauritius[33], Nigeria[33], Sri Lanka, and Uganda.

Also see Education Strategy.

Tactics to Subvert Tobacco Control Campaigns and Policies

Intimidating Governments with Litigation or Threat of Litigation

BAT has legally challenged the following tobacco control measures in the respective countries:

Fabricating Support through Front Groups

In May 2012, BAT was asked to reveal the British-based think tanks it had funded during the previous five years, as well as those it had funded that were active in the plain packaging debate.

The company replied:

“British American Tobacco is happy to support those who believe in the same things we do – whether that be retailers against display bans or farmers against being forced out of growing tobacco;
  • Our support may be financial support, or resources in kind;
  • We do not tell these bodies what to say or how to spend the money;
  • Many of the bodies, in particular the retailers, feel deeply patronised at the suggestion they are merely industry stooges.”[35]

In May 2013, in response to questions asked at the company's Annual General Meeting by health advocacy Action on Smoking and Health, the company disclosed that it funded:

Also see: BAT Funded Lobbying Against Plain Packaging | The Plain Pack Group | Australia: Campaigning Websites | Australia: International Lobbying

Corporate Social Responsibility (CSR) Initiatives

On its website on Corporate Social Investment (accessed June 2017), BAT lists three global themes that focus its CSR activities:

  • contributions to sustainable agriculture and environment
  • empowerment of individuals and communities where it operates
  • activities that enrich civic (public and community) life

In contrast, TCRG research has revealed how BAT has used CSR and stakeholder management activities in the African region to promote their corporate image.[36]

Others have documented similar evidence, including in Malaysia[37] and Malawi.[38]

Also see BAT's Involvement with Durham University.

Discrediting Science and Scientists

A review of tobacco industry internal documents covering the period 1985 - 1995, revealed that BAT liaised with scientists and was selective on what findings to make public.[39]

According to the study's authors, “At times scientists seemed to be acting more like public relations specialists than scientists. One 1988 BAT memorandum on the issue of 'Communication of ETS information' revealed one employee who was anxious about having certain scientists defend their position on ETS in public fearing they might get into trouble if they were too rational”.[39]

Involvement in Tobacco Smuggling

Next Generation Products

To improve the tobacco industry’s sustainability, tobacco companies are investing in tobacco and nicotine products that, unlike cigarettes, could have growth potential in developed markets. These products are often referred to as Next Generation Products (NGPs), and are often linked to tobacco companies’ harm reduction strategies.

NGPs marketed by BAT include:

  • Vapour products (e-cigarettes) – according to the BAT Annual Report 2016, the company has “the world’s largest vapour business outside of the US”, manufactured under the trade name “Vype”.[40][41]
  • Heat Not Burn Tobacco Products – the first BAT tobacco heating product was launched in Romania in 2015 under the brand iFuse. The next was glo, launched in Japan in 2016.[41]
  • Licensed nicotine products – although BAT had plans to diversify their approach to cigarette alternatives via a nicotine inhaler named Voke in a collaboration with the company Kind Consumer Limited, the project was abandoned in January 2017.[42][41]

TobaccoTactics Resources

Relevant Link

TCRG Research

  • G. Fooks, A. Gilmore, J. Collin et al. The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR. Journal of Business Ethics, 2013, 112:283. doi:10.1007/s10551-012-1250-5

References

  1. 1.0 1.1 British American Tobacco, Our History: A time-line, undated, accessed February 2017
  2. British American Tobacco, Website, undated, accessed February 2017
  3. Euromonitor International, Company Shares (Global-Historical Owner) Retail Volume % Breakdown, World 2010-2015. Available from www.euromonitor.com (by subscription), accessed February 2017
  4. Reference for Business, Company Profile, Information, Business Description, History, Background Information on British American Tobacco PLC, 2017, accessed February 2017
  5. British American Tobacco, Our Brands, 2017, accessed February 2017
  6. British American Tobacco, British American Tobacco Annual Report 2015, 2017, accessed March 2017
  7. British American Tobacco, BAT announces agreement to acquire Reynolds, News release 17 January 2017, accessed May 2017
  8. ITC Limited, Company Profile: History and Evolution, 2017, accessed June 2017
  9. Surya Nepal Private Limited, Company Profile, 2017, accessed May 2017
  10. Tobacco Reporter, Indian government to sell ITC stake, 25 February 2016, accessed May 2017
  11. S. Mitra, British American Tobacco has no plan to increase stake in ITC, Business Standard, 15 January 2014, accessed May 2017
  12. S. Reckhi, R. Banerjee, Raising the Stake, indiatoday, 31 December 1994, accessed May 2017
  13. BAT not averse to raising stake in ITC, The Times of India, July 2002, accessed May 2017
  14. I. Gupta, T. Surendar, Remaking Indian Tobacco Co., Forbes, 30 June 2010, accessed May 2017
  15. 15.0 15.1 Nicovations Ltd, Website, undated, accessed April 2017
  16. Transparency Register, accessed March 2017
  17. The Eliminating Child Labour in Tobacco Growing Foundation, ECLT Foundation Governance, 2017, accessed November 2017
  18. International Labour Organization, Mission and impact of the ILO, 2017, accessed November 2017
  19. Business Action for Africa, Business Partnerships for Development in Africa. Redrawing the boundaries of possibility, accessed March 2017
  20. Conference Board, Work-Life and Diversity, accessed March 2017
  21. Conference Board. Board Europe Work-Life and Diversity, July/August 2002, accessed March 2017
  22. Transparency Register - Bernstein Public Policy, 19 April 2016, accessed March 2017
  23. Transparency Register - Business Platform Europe, 21 March 2016, accessed March 2017
  24. Transparency Register - EUTOP Brussels SPRL, 22 December 2016, accessed March 2017
  25. Transparency Register - Pappas & Associates, 23 May 2016, accessed March 2017
  26. Red Flag, 30 September 2016, accessed March 2017
  27. Transparency Register - Simply Europe, 03 April 2016, accessed March 2017
  28. 28.0 28.1 Corporate Europe Observatory, Obscured by the Smoke - British American Tobacco's Deathly Lobbying Agenda in the EU, June 2009, accessed June 2017
  29. British American Tobacco, Youth smoking prevention, undated, accessed March 2017
  30. 30.0 30.1 Campaign for Tobacco Free Kids, British American Tobacco, 2010, accessed March 2017
  31. S. Braun et al, Tobacco industry targeting youth in Argentina, Tobacco Control, 2008;17(2),111-7 , accessed March 2017
  32. F. Ashall, My experience with British American Tobacco’s illegal and unhealthy advertising in Ethiopia, supported by Ethiopian authorities, The Great Tobacco Plague: A doctor’s experience of the horrors of tobacco, undated, accessed March 2017
  33. 33.0 33.1 33.2 Tobacco giant ‘breaks youth code’, BBC NEWS, June 2008, accessed March 2017
  34. J. Hunt, Tobacco industry fails in last appeal against plain packaging, Scottish Legal News, 12 April 2017, accessed April 2017
  35. BAT Press Office, Email to Tobacco Control Research Group, 25 May 2012
  36. G. Fooks, A. Gilmore, J. Collin et al. The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR. Journal of Business Ethics, 2013, 112:283. doi:10.1007/s10551-012-1250-5
  37. S. Barraclough, M. Morrow. A grim contradiction: The practice and consequences of corporate social responsibility by British American Tobacco in Malaysia. Social Science and Medicine, April 2008, 66(8),1784-6
  38. M.G. Otanez, M.E. Muggli, R.D. Hurt et al. Eliminating child labour in Malawi: a British American Tobacco corporate responsibility project to sidestep tobacco labour exploitation. Tobacco Control, 2006;15:224-30
  39. 39.0 39.1 J Drope, S Chapman. Tobacco industry efforts at discrediting scientific knowledge of environmental tobacco smoke: a review of internal industry documents. Journal of Epidemiology & Community Health, 2001;55:588-594
  40. British American Tobacco, Annual Report 2016, 2017, accessed May 2017
  41. 41.0 41.1 41.2 British American Tobacco, Our product portfolio, 2017, accessed May 2017
  42. M. Geller. BAT quits nicotine inhaler to focus on vaping, 5 January 2017, accessed May 2017