British American Tobacco in Africa: A Past and Present of Double Standards

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British American Tobacco: We Are Acting “Responsibly”

British American Tobacco (BAT) sells its products in more than 200 markets globally, supports over 100,000 tobacco farmers, and sold 676 billion cigarettes in 2013 over six continents.[1] Although tobacco products kill up to one out of every two of its consumers,[2] the company publicises itself as a company in a “controversial industry” that is acting “responsibly and with integrity”,[3] with a team that is “committed to achieving our business objectives in an honest, transparent, and accountable way”.[4] In the company’s Statement of Business Principles, BAT elaborates on its core business principle of good corporate conduct:

“The principle of Good Corporate Conduct is the basis on which all of our business should be managed. Business success brings with it an obligation for high standards of behaviour and integrity in everything we do and everywhere we operate. These standards should not be compromised for the sake of results.”

These messages have been frequently echoed by the company’s Director of Corporate and Regulatory Affairs Kingsley Wheaton. In an interview for BBC Two’s June 2014 mini-series Burning Desire: The Seduction of Smoking, Mr. Wheaton stressed the company’s values of corporate accountability, stating: “We are indeed the problem. That is no reason for us not to be part of the solution.” Wheaton was referring specifically to the ‘harm reduction’ agenda and BAT’s venture into the e-cigarette market.

BAT’s Business of Double Standards in Africa

Despite claims of responsibility and transparency, evidence shows BAT has breached its own business mandates, sometimes violating international codes of conduct and the Framework Convention on Tobacco Control. Internal documents describe BAT’s advertising, marketing, and sales strategies in Africa. Many of these documents shed light on BAT’s contradictory business conduct within the African continent, detailing a system of double standards between how the tobacco company conducts its business in countries with more tobacco control regulation and how business is conducted in African countries.[5][6] Historical examples of these double standards are detailed below, including the tobacco company's established targeting according to race, gender, and age; its method of fostering financial dependency among its farmers; and its exploitation of the African continent.

Business Standards in Emerging Economies vs. Developed Economies

In an internal document defending the tobacco company’s business behaviour in emerging economies, BAT explained why it does not necessarily need to operate in “emerging economies” with the same values it would in a “developed economy”:

“It is our experience that local governments are quite capable of judging for themselves whether they are being exploited and can act accordingly, in a way suitable for their culture and institution.”

adding:

“Governments in developing economies are perfectly capable of determining their own health priorities. To suggest otherwise is insulting and patronising.”[6]

Taking Advantage of Africa: "Tobacco’s Final Frontier"

In a speech to BAT managers in 17 countries in which the company has subsidiaries, BAT Chairman Barry Bramley reported that the company was specifically targeting African markets as business became more affected in other economies (partly due to tobacco control legislation):

“Africa is also projected to continue growing…BAT is strongly placed to take advantage of the growth in these markets.”[7]

The senior BAT executive stressed the essential objective to “become the lowest possible cost producer in each market” in order to take full advantage of growth in emerging markets (such as Africa) so as to “increase that profitably still further”.[7]

In a 1990 Insight investigation published in the Sunday Times, BAT was found to be “operating a double standard—one for the West and another for the Third World", taking “advantage of loosely enforced or non-existent government health restrictions to target millions of poor and ignorant people in what is becoming tobacco’s final frontier.”[8]

The investigation presented evidence that BAT was not operating on the same principles and mandates in Africa as it did in Europe. In the former, BAT was:

  • Selling cheaper, highly addictive cigarettes to Africans with tar and nicotine contents that would not be legal in countries with restrictions on tobacco products.
  • Marketing that smoking is not harmful to health despite evidence to the contrary and the fact that it was forbidden under British advertising code at the time;
  • Using political and economic power to advance its presence in African markets;
  • And disseminating advertising in print, television, and media that promoted the idea that smoking was a way to mimic Western sophistication, manliness, and beauty. An African smoker was quoted as starting the habit because BAT’s advertisements led him to believe smoking was “a passport to prosperity” because everyone in the advertisement was wearing shoes.[8]

BAT’s plans to take advantage of the previously unexploited business opportunities in Africa are evidenced time and time again in other internal documents:

  • The company’s 1992-1996 Five Year Plan pinpointed African markets as a priority in their marketing objectives, stating “Profitable opportunities in significant markets in Latin America and Africa will be aggressively and consistently exploited with BATCo companies being the target.”[9]
  • In a 1995 staff bulletin, BAT director of African operations Norman Davis spoke of the “untapped” resources on the African continent the company sought to benefit from: “It (Africa) represents immeasurable wealth, and it’s frustrating for Africa that these resources have never been exploited.” Expanding on the company’s future performance in Africa, Davis said, “There is no lack of opportunities. It is up to us to grasp them.”[10]

More recently, a 2009 article in The Times detailed multinational tobacco companies’ exploitation of African markets, primarily through the “single-stick model” of business, whereby tobacco producers like BAT increase their earnings by selling cheap single stick cigarettes, making money off of vulnerable groups like “the poor, the uneducated, and the young”.[11]

An article by a member of the Tobacco Control Research Group published in April 2014 evidenced how the tobacco industry’s “expansion in emerging markets” is strategically maximised to “offset declines in mature markets.” Author Gary Fooks goes on to exemplify how the industry protects its African markets by stalling legislation and public health measures that would restrict its opportunities for further growth and success.[12]

Image 1. BAT highlights Black African middle class as ‘drivers’ of their economy, BAT website 2007

Targeting Race: BAT’s ‘Black Diamonds’

A slide (see Image 1) from a BAT presentation at the 2007 South Africa Citygroup Tobacco Sector Conference referred to the African “Black middle class” as the company’s “Black Diamonds”, singling out this group as the key to the company’s future success and profitability. [13] BAT implied the company could advance its profits and corporate aims by focusing their efforts specifically at increasing the number of Africans who smoke.

Targeting Gender and Age in Africa: Appealing to Females and ‘Early Adopters’

How the Tobacco Industry Defines “Young Adults”

It should be noted that BAT specifically and the tobacco industry in general have left a trail of documents establishing that terms such as 'young adult smokers' and 'adult smokers under 30’ in practice refer to youth smokers, even if they are not of legal age to consume tobacco products.[14]

For example, a 1975 memo from Brown and Williamson (part of BAT) explained:

“when describing market categories and target audiences we use references such as ‘young smokers’, ‘young market’ ‘youth market’ etc …in the future when describing the low-age end of the cigarette business please use the term ‘young adult smoker’ or ‘young adult smoking market.’[15]

Given this, although the strategies and programmes referred to in the evidence presented below may use phrases that are similar to those above, it is likely that youth and underage smokers are implied on an unspoken basis.

Lucky Strike Cigarettes and Young Adults

An internal document outlining its global ‘Nothing Else’ campaign discloses that BAT sought to make its Lucky Strike brand of cigarettes a “valid and acceptable alternative for a growing number of young adults” throughout the 1990s.[16] In the same document the company commended the campaign for successfully establishing Lucky Strike cigarettes as a genuine “international brand for young adults from a non-existent awareness base” in some of its targeted markets.[16] Although in the 1990s, at the time this document was written, Lucky Strikes were not yet widely actively marketed in Africa, records show that the document outlining plans for the campaign, including its targeting of young smokers, was faxed to a number of its African companies, including BAT Uganda, BAT Malawi, BAT Nigeria, and BAT Zimbabwe. [16]

Table 1. Action Plan and Timings for BAT’s Lucky Strike Africa launch[17]


In an internal document from April 1995 BAT revealed its plans to launch their Lucky Strike brand, now successfully marketed as a prime tobacco product for young smokers, in eight African countries throughout the first part of 1995, namely Zimbabwe, Nigeria, Kenya, Uganda, Malawi, Sierra Leone, and Mauritius.[17] Similarly, its Lucky Strike Filter Africa Launch Plan expounded on the plans for this launch and specifically states that the introduction of the Lucky Strike brand into African countries is meant to serve strategically as BAT’s “main thrust into the key Young Adult Urban Smoker (YAUS) segment”. Table 1 shows the proposed timeline for this plan in various African countries.



Singling Out African Youth

The 1998-2000 Southern African Area Plan set forth a strategy to make its cigarettes appeal to “early adopters” as well as “trend setters”.[5]


African Youth Exposure to Tobacco Industry Marketing

Table 2. Results of the Global Youth Tobacco Survey report 2002,[18]
Table 3. Table detailing part of a BAT Development Plan to increase BAT’s market share in female and ASU30 (adult smokers under 30) segments in Southern regions of Africa[5]
Table 4. Excerpt from BAT’s Southern Africa Area 1998-2000 Plan detailing their aim to invest in attracting females and ASU30s to their brands,[5]

A 2002 survey of Ugandan youth suggested that 80.6% of students were exposed to high levels of tobacco industry advertising.[18] Table 2 summarises results from the Global Youth Tobacco Survey.

  • See Uganda- BAT Marketing Strategies for more information on how BAT’s marketing in Africa and Uganda is tailored to attract youth and young adults to its tobacco products.

Targeting Women in Emerging Economies

BAT has also targeted women in its campaigns in emerging economies. In an internal document, the company defended their direct targeting of women: “The profile of some brands and advertising may well make those brands more appealing to women or other groups in society, than other brands.”[6]

BAT went as far as insisting that not directing marketing toward women in lower-income countries belittled them:

”It is patronising to suggest that particular segments of the adult population, such as women, should not be the specific focus of an advertising campaign, as it suggests that they are incapable of making an informed decision as to whether or not to smoke.”[6]

‘Lights’ For African Women

Developing ‘light’ versions of some of BAT’s cigarettes was also part of the strategy to specifically attract African females to their tobacco products.[5]

African Females and Young Adult Smokers

In the company’s 1998-2000 Southern Africa Awareness Plan, a “development project” was created to address particular brands’ failure to “develop appeal among ASU30’s and females.”[5] Tables 3 and 4 are extracts from this plan to counter this failure.

Selling More Harmful and Addictive Cigarettes in Africa

The Sunday Times 1990 investigation into BAT’s African manufacturing concluded that BAT was marketing cheaper cigarettes to lower-income Africans that had greater levels of tar and nicotine than previously existing products.[8] Tests conducted found that 80% of BAT’s Kenyan cigarette brands had more tar than their British equivalents. In an internal memo BAT sent to its employees following the article in the press, BAT assured its employees that no cigarette they sold in Kenya had more than 20 mg of tar, but the average in European cigarettes at the time was 13 mg.[19]

Double Marketing Standards in Africa

Despite display and advertising bans, BAT has sponsored sports events popularly attended by children and has devised covert ways of advertising their products to new and current consumers. Such practices are banned in many of the countries it operates in and is prohibited by BAT’s own International Marketing Principles.

Promoting Single Stick Sales in Africa

BAT has secretly fought against prohibiting the sale of single cigarettes while publicly declaring never to sell nor promote the sale of single cigarettes. The sale of single sticks is illegal in many parts of the world as it is known to appeal especially to children.[20]

Fostering Financial Dependency of African Farmers

A 2013 Tobacco Industry Monitoring Report by the Centre for Tobacco Control in Africa stated that the tobacco industry in Uganda, (85% of which BAT Uganda accounts for), functions on a financial model between the tobacco company and its contracted tobacco farmers that creates a form of cyclic credit bondage.[21] Tobacco companies provide loans to tobacco farmers at rates they cannot possibly or feasibly repay, creating a cycle in which the farmers remain constantly indebted to the tobacco company. In Uganda, BATU not only has power over the finances but also has direct control over the agricultural inputs such as seeds and fertilizers, giving them complete control over the tobacco farming system in Uganda.[18] As the Uganda Tobacco Control Association explains:

"Because of the domination of BATU in monopolistic market conditions, farmers only have access to one principal buyer for their products. Due to the lack of competition, and hence unfavorable prices, tobacco farmers operate in a form of bondage to tobacco companies while the industry reaps huge profits.”[18]

Because the farmers are contracted to only sell their crop to BATU, BATU is required to buy the entire tobacco crop from its farmers to ensure their livelihoods. Yet, in 2005, the company was sued by 3,000 tobacco farmers when BATU failed to buy their tobacco, only providing the farmers with compensation three years later when the court found the company to be in violation of their contracts.[22]

This inequitable monopoly is not new. It was reported at the All African Conference on Tobacco Control in 1993 that there is a “general feeling among farmers that BAT grossly cheats them by paying miserable prices for their crops,” sometimes claiming less than 1USD in profits after what a farmer owed to BAT was paid.[23]

Encouraging the Involvement of African Children in Tobacco Farming

A 2013 report monitoring the tobacco industry in 13 African countries, Uganda included, found that children of tobacco farmers are often unable to attend school because they are encouraged by the industry to work in tobacco fields to replace older family members.[21] This has been a consistent problem in Uganda; surveys conducted in Uganda in the 1990s discovered that only 60% of boys and 40% of girls in tobacco growing families were able to attend school, quoting labour requirements of tobacco farming and not enough profit from their crop as the reasons for their lack of attendance.[23]

More About BAT in Africa

For more information on BAT in Uganda and Africa, see:

Notes

  1. British American Tobacco, Who We Are, 2014, accessed June 2014
  2. World Health Organisation, Tobacco, 2014, accessed June 2014
  3. British American Tobacco, About Us, 2014, accessed June 2014
  4. British American Tobacco, Corporate Governance: A Commitment to Transparency, 2014, accessed June 2014
  5. 5.0 5.1 5.2 5.3 5.4 5.5 British American Tobacco, Southern African Area 1998-2000 Plan, 1998, Bates no. 325017595-325017650, accessed June 2014
  6. 6.0 6.1 6.2 6.3 British American Tobacco, BAT Arguments: Our Presence in Emerging Economies Uganda, undated, Bates no. 770009881-770009884, accessed June 2014
  7. 7.0 7.1 British American Tobacco, Talk to TMDP-Chelwood August 1990, 24 July 1990, Bates no. 502619006-502619029, accessed June 2014; note: The document is a 24-page speech with no author mentioned. However, the speaker introduces himself as sharing his “views from the perspective of a BAT Industries Board member as well as that of BATCo Chairman”. In 1990, Barry Bramley was the company’s Chairman, and at the trial MINNESOTA V. PHILIP MORRIS INC., the speech was attributed to him Deposition of RAYMOND J. PRITCHARD
  8. 8.0 8.1 8.2 British American Tobacco, Africa: Ashtray of the World, The Sunday Times, May 13, 1990, Bates no. 2500078937-2500078947, accessed June 2014
  9. British American Tobacco, BATCo Operating Group Five Year Plan 1992-1996, December 11 1991, Bates no. 300019658-300019747, accessed July 2014
  10. British American Tobacco, BAT Bulletin, February 1995, Bates no. 500161146-500161167, accessed July 2014
  11. J. Kluger, Big Tobacco Sets its Sights on Africa, July 24 2009, accessed July 2014
  12. G. Fooks, Explainer: How Big Tobacco Turns Profit, The Conversation, April 10 2014, accessed July 2014
  13. D. Crow, BAT South Africa Citygroup Presentation, BAT website, 2007
  14. C. Bates and A. Rowell, Tobacco Explained: The Truth About the Tobacco Industry… in its Own Words, 1998, accessed June 2014
  15. RA Pittman, Memorandum to J.A. Broughton et al. Concerning Marketing Descriptors for the Young Smokers Segment, 1975, Bates no. 670192436, accessed June 2014
  16. 16.0 16.1 16.2 British American Tobacco, Tobacco Strategy Group: Lucy Strike Filter- Progress in “Nothing else” Campaign Markets, undated, Bates no. 500245105-500245113, accessed June 2014
  17. 17.0 17.1 British American Tobacco, Lucky Strike Filter Status Report/ Key Issues, April 25 1995, Bates no. 500311225-500311256, accessed July 2014
  18. 18.0 18.1 18.2 18.3 Uganda National Tobacco Control Association, Shadow Report on the Status of Implementation of the World Health Organization Framework Convention on Tobacco Control (WHO-FCTC) Articles 8 and 13 in Uganda 2012, May 2013
  19. British American Tobacco, Memo Regarding Sunday Times Article on BAT, May 14, 1990, accessed June 2014
  20. Action on Smoking and Health, You’ve Got to be Kidding: How BAT Promotes its Brands to Young People Around the World, 2007, accessed June 2014
  21. 21.0 21.1 Centre for Tobacco Control in Africa, Tobacco Industry Monitoring Regional Report for Africa, August 2013
  22. Hillary Nsambu, BAT Ordered to Pay Farmers Sh3b, New Vision, 29 June 2008, accessed June 2014
  23. 23.0 23.1 D Yach and S Harrison (Ed.), Proceedings of the All Africa Conference on Tobacco or Health 14-17 November 1993, 1993, Bates no. 304057140-304057344, accessed June 2014