McKinsey

McKinsey is a global management consultancy firm with a long history of working with the Tobacco Industry and most recently the Foundation for a Smoke-Free World.

Background

McKinsey, which was established in 1926,¹ advises and conducts research for corporations, governments, institutions and philanthropic foundations across the world.²³
As of 2018, McKinsey had more than 14,000 consultants and offices in 120 cities.³
The company has a wide range of corporate clients, and calls itself “the trusted advisor and counselor to many of the world’s most influential businesses and institutions”.⁴

Relationship with the Foundation for a Smoke-Free World

In October 2017, McKinsey organised a stakeholder event for the Foundation for a Smoke-Free World (FSFW) in London.⁵ The FSFW website states that the purpose of this event was to ”review our objectives, and to hold an important discussion about our future plans to accelerate research and action to end smoking through better cessation and effective reduction.”⁶ The FSFW claims it is an independent, private organisation that commissions research to end cigarette smoking.⁷ However, it is wholly funded by Philip Morris International with PMI providing the Foundation with US$80 million annually.

Relationships with Tobacco Companies

McKinsey also has a history of well-documented ties with the tobacco industry from the 1960s through to the late 1990s. The company has worked for British American Tobacco (BAT), Philip Morris International (PMI), RJ Reynolds, Rothmans, Philip Morris USA, Japan Tobacco International (JTI), Lorillard, and Brown and Williamson, amongst others.⁸⁹

Work for Philip Morris USA and Philip Morris International (PMI)

The following are examples of previous work done by McKinsey for Philip Morris USA and PMI. This list is illustrative and not exhaustive:

• In the 1990s, PMI commissioned McKinsey to conduct a study on the cigarette industry’s advertising activities in four selected Asian countries that the tobacco company wished to gain access to.¹⁰
• In the 1980s, McKinsey advised Philip Morris USA on how to optimise its cigarette sales and marketing processes.¹¹¹² Having been asked by the tobacco company to investigate how profitable cigarettes were , McKinsey concluded that they were among the most profitable products in what was known as the dry grocery category and then used this research to encourage retailers to invest in gantry space to market tobacco products.¹³
• In the 1950s, McKinsey advised Philip Morris on how to improve its research and development department.¹⁴

Work for British American Tobacco

In the 1990s, McKinsey worked for BAT to plan and implement the restructuring of Indian Tobacco Company Limited (ITC).¹⁵ BAT owns nearly a third of ITC shares.

Work for JTI, BAT & PM on Project Cerberus

Between 1999 and 2001, Philip Morris, British American Tobacco and Japan Tobacco International executed “Project Cerberus” to “develop a global voluntary regulatory regime as an alternative to the Framework Convention on Tobacco Control (FCTC).”¹⁶ McKinsey provided support for the project team. In January 2000, McKinsey produced a confidential summary of a meeting in London which summarised the rationale and next steps for tobacco companies involved in the project. Participants discussed communication plans, consultation processes and legal reviews. The summary’s final slide entitled “What will success look like” listed short and long-term objectives for the tobacco companies. In the short term this was about offering “credible alternatives” to government regulation and the WHO; promoting their ability to be involved in dialogues and gaining third party endorsements. In the long term it was “being accepted participants in discussions” and that the majority of the public would trust them to manage “a controversial product”. It was key for the companies to end, or avoid, being isolated in debates among regulators.¹⁷¹⁸

Work for Other Tobacco Companies

In the nineties, McKinsey also helped JTI, Lorillard and Rothmans to restructure and develop their businesses.^{1920 212223}

McKinsey and Tobacco Company Staff

Many individuals that have worked for McKinsey have subsequently gone to work for tobacco companies. Similarly, former employees of tobacco companies later became employees at McKinsey. The following list is not exhaustive, but is an example of the revolving door. The revolving door is the term used to describe instances where legislators, regulators or government advisors take up positions as consultants for the private sector where their area of former public service can conceivably serve the interests of the private company. Similarly, the revolving door also refers to former private sector employees that accept positions of influence with governments.

From McKinsey to a Tobacco Company or Associated Organisation

• Since 2017, Onur Celik has served as Strategy Director at Fontem Ventures (owned by Imperial Tobacco) and is an Independent Consultant with McKinsey. For 11 years, Celik worked in the consumer and retail space in McKinsey in London.²⁴
• Deepak Mishra was a former partner of McKinsey & Company as part of the Consumer Goods, Retail and Operations leadership teams (2001 – 2014) and in 2018, Mishra was appointed Senior Vice President, Chief Strategy Officer at PMI .²⁵²⁶
• Martin Skancke was Director General and previously headed the Asset Management Department of the Norwegian Ministry of Finance between 2006 to 2011 which is responsible for the management of the government’s pension fund.²⁷²⁸ Between 2001 to 2002, he was an Advisor in McKinsey & Company’s Oslo Office advising international companies on business strategy.²⁷ In 2011, Skancke became the founder and General Manager of Skancke Consulting and since 2018 he has served as a board member of the PMI-funded Foundation for a Smoke-Free World.²⁹³⁰
• Between 2015 to 2018, Farhad Riahi was a former partner of McKinsey & Company Healthcare Systems and Services where he worked on a range of health systems with senior healthcare leaders across numerous sectors.³¹ Since 2018, Riahi served as the Chief Health, Science and Technology Officer at the PMI-funded Foundation for a Smoke-Free World.³²Riahi leads the ‘’scientific research and innovation effort to accelerate smoking cessation and harm reduction.’’³³ Riahi was also a confirmed speaker at the Global Tobacco and Nicotine Forum (GTNF) at the 2018 conference held in London on 11-14 September 2018.³⁴ In November 2018, the Foundation for a Smoke-Free World unveiled a new report it had commissioned from consultants EY-Parthenon. It stated that ‘’Less than a quarter of smokers stay off cigarettes for more than a year with current cessation products’’.³⁵ However it has been criticised by health experts as biased, for not adding anything new to science and for ‘’providing market research for PMI.”’³⁶
• Since 2017, Eddy Pirard has served as the President and CEO of Japan Tobacco International (JTI). He previously served as Executive Vice President and Regional President for JTI in Switzerland and worked for McKinsey’s as an Engagement Manager (1991 – 1995).³⁷

From Tobacco Company to McKinsey

• Arthur van Benthem was a Senior Advisor at McKinsey (2017 – 2018) and worked for Imperial Tobacco for six years (2011 – 2017) as both Executive Board Member and as Chief Operating Officer and Group Sales Director³⁸ Furthermore, van Benthem was Chief Executive Officer of Fontem Ventures (2015 – 2017).³⁹
• Peter Corijin served as Senior Advisor at McKinsey (2017 – 2018) and previously worked at Imperial Tobacco as both Chairman of the Operating Committee & CMO, Director Rizla, Global Travel Retail (2015 – 2017) and as Chief Marketing Officer. Corijin was also the Chairman of the Supervisory Board of Fontem Ventures (2013 – 2015).⁴⁰
• Lucian Hsu was the Consumer and Trade Strategy and Insight Analyst at Japan Tobacco International (2014 – 2015) and since 2018 serves as the Organisation Specialist Consultant at McKinsey.⁴¹

TobaccoTactics Resources

• British American Tobacco
• Japan Tobacco International
• Philip Morris International
• RJ Reynolds
• Foundation for a Smoke-Free World
• Imperial Tobacco
• Fontem Ventures
• Revolving Door

Relevant Links

McKinsey’s web site