Free Market Foundation

The Free Market Foundation (FMF) is a right-wing libertarian think tank, founded in 1975, which has a history of working on behalf of the tobacco industry.

Background

FMF is a partner of the Atlas Network.¹

In 2017, FMF and Atlas co-hosted the Africa Liberty Forum, an annual event that promotes greater freedom in public policy in the African region.²
FMF’s Executive Director Leon Louw and FMF staff and advisors have long been affiliated with the Mont Pelerin Society, an international organisation consisting of influential people who embrace free market principles.³⁴ Other Mont Pelerin members include Dr Tim Evans and the Eamonn Butler from the Adam Smith Institute.

Relationship with the Tobacco Industry

Part-Funded by Tobacco Companies

British American Tobacco South Africa (BATSA), which holds about 74% of the South African cigarette market,⁵ has been a “senior corporate member” of FMF from 2000.⁶⁷⁸⁹¹⁰ Philip Morris International (PMI) was also listed on FMF’s website as a senior corporate member in 2013. ¹⁰ Shortly after, the FMF removed information about members from its website, and it no longer makes its donors’ details public.¹¹

Senior membership is the highest level of FMF corporate membership¹⁰ and senior members donate between R100,000 and 250,000 annually (roughly equivalent to £5,000 – £12,750 per annum).¹²

A statement on FMF’s website outlines the relationship between FMF and its members:

“the FMF is employed by members to promote a market economy in which they earn higher profits.”¹³

Furthermore, its role is to “assist business” by “making representations on behalf of its members to the government.”¹⁴

Relationship with “Tobacco Kingpin” Johann Rupert

FMF has a long-standing relationship with the Rupert family of South Africa, who established the tobacco company Voorbrand in the 1940s, which was later consolidated with Rothmans International, before merging with British American Tobacco (BAT) to form BATSA.¹⁵¹⁶ After this restructuring, Johann Rupert, described by some as South Africa’s “tobacco kingpin”,¹⁵ became Chairman of investment companies Remgro and Reinet, each of which has had a major shareholding in BAT.¹⁷

In 2012, Reinet Investments was reported as holding 84 million shares in BAT, which accounted for around 85% of Reinet’s value¹⁸¹⁹¹⁹ and 4.3% of BAT’s capital.

Johann Rupert and his father Anton have been patrons of FMF between at least 2000 and 2016.²⁰²¹ FMF’s Louw has reported that in 2016 Johann Rupert “donated millions” to the FMF Khaya Lam project.²²

Pro-Tobacco Activities

One of FMF’s objectives is “persuading the general public and consumer associations that government does not solve problems”¹⁴. FMF staff and advisors have a long history of opposing tobacco control measures, criticising health research that threatens tobacco industry profits, and using national media outlets to voice their arguments.

Opposed South Africa’s 2018 Draft Tobacco Control Bill

In May 2018 the Government of South Africa announced its intention to introduce the Control of Tobacco Products and Electronic Delivery Systems Bill, aimed at strengthening the country’s tobacco legislation.²³ The Bill proposed several measures strongly opposed by the tobacco industry, including Plain Packaging.

In response to the draft Bill, FMF’s Executive Director Louw has made various unsubstantiated claims in the media, including that the Bill is “anti-small business”, “unconstitutional”, and “ignores the mental health benefits of smoking”.²⁴²⁵ Louw has further claimed that the draft Bill is an “assault on human dignity”,²⁶ is “racist”,²⁷²⁸ and will “threaten jobs and the economy”.²⁶

A peer-reviewed study from Bath University researchers has found that some of these misleading arguments have been used repeatedly by the tobacco industry in opposition to tobacco control measures.²⁹ The study also showed that having its anti-legislation arguments voiced by more credible allies, like FMF, is a well-documented tobacco industry tactic to lobby governments and sway public opinion in favour of de-regulation.²⁹

• For more information on the tobacco industry’s opposition to South Africa’s draft Bill, including the arguments and tactics used, go to South Africa: Industry Interference with the Control of Tobacco Products and Electronic Delivery Systems Bill.

FMF Advisor Labelled World Bank Health Report “Wicked and Shameful”

In response to the World Bank’s 1999 report Curbing the Epidemic, which found tobacco control resulted in public health benefits without harming economies,³⁰ tobacco companies recruited academics to write reports discrediting this evidence.³⁰
FMF lists two of these reports on its website under ‘Our History’ (key milestones and publications timeline).³¹

The first, Smoked Out: Anti-Tobacco Activism at the World Bank published in 2000, appears to have been a joint effort between FMF and Hugh High from the IEA.³² Deepak Lal, a FMF Advisor between at least 2000³³ and 2018³⁴ wrote the preface to the report, in which he labelled concerns about passive smoking as a “false scare” and claimed tobacco control would damage poorer countries’ economic wellbeing.³² The report was cited approvingly in internal BAT documents.³⁵

The second report, Smoke gets in your eyes: The economic welfare effects of the World Bank-World Health Organisation global crusade against tobacco, was also published in 2000.³¹ It was co-written by Deepak Lal who describes the World Bank’s report as “wicked and shameful”.³⁶ Lal claimed that tobacco control was simply “political correctness” and argued that for many “poor people”, smoking was “one of the only sources of pleasure in lives which remain ‘nasty, brutish and short’”.³⁶

Internal documents suggest BAT paid Lal over $55,000 USD for his work on the “World Bank Project”.³⁷ Neither report discloses its funding sources.

Defender of Tobacco Marketing

Internal tobacco industry documents identify FMF as an organisation that helped protect the tobacco industry’s “marketing freedoms”.³⁸
For instance, in 1993 BAT carried out a survey of its global public affairs employees, who were asked to: “List the third party groups which have helped in the defence of your marketing freedoms (eg. advertisers, media, etc)”. FMF was one of a small number of organisations listed for South Africa.³⁸ In a 1996 BAT document, an employee who had visited the United Tobacco Company (a company later acquired by BATSA), reported that United Tobacco Company were members of FMF because FMF helped protect against “legislative interference in marketing of products.”^{16 39}

These documents indicate FMF worked on behalf of BAT to try and block attempts to restrict tobacco marketing.

In 2016, FMF was one of 47 think tanks that collectively wrote to the World Health Organization to oppose plain packaging for tobacco products.⁴⁰ Many of the other think tanks were affiliated with the Atlas Network.

TobaccoTactics Resources

• South Africa- Country Profile
• South Africa: Industry Interference with the Control of Tobacco Products and Electronic Delivery Systems Bill
• Africa’s Tobacco Epidemic
• British American Tobacco in Africa: A History of Double Standards.
• Atlas Network
• Institute of Economic Affairs
• Philip Morris International
• British American Tobacco
• National African Federated Chamber of Commerce and Industry (NAFCOC)

Relevant Link

• Free Market Foundation website