Japan Tobacco International

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Background

Japan Tobacco International (JTI) is an international tobacco business owned by Japan Tobacco Group. The company was formed in 1999 when the Japan Tobacco Group spread into the international market by the acquisition of several companies around the world. In 1999, the Japan Tobacco Group bought the US multinational RJ Reynolds. In 2007, JTI bought another major tobacco manufacturer, Gallaher. 1 JTI’s headquarters are in Geneva, Switzerland. 2

JTI produces cigarettes, rolling tobacco, electronic cigarettes, snus and cigars. 3 It also produces waterpipe tobacco through the acquisition of companies such as Al Nakhla Tobacco Company. 4 JTI’s brands number over a hundred and include Winston, Mevius (previously called Mild Seven), Camel, LD, Glamour, Benson & Hedges, Silk Cut, and Amber Leaf and Old Holborn rolling tobacco in addition to two electronic cigarettes: Logic and Ploom. 5

The company’s business is extremely globalised. JTI sources its tobacco leaf from 33 countries, manufactures its products in 26 countries, and distributes its products in 130 countries. 3 In 2020, the company reported on its website that it experienced a continuous profit growth with US$3,493 million adjusted operating profit and US$11,330 million in core revenue in 2018. 1 JTI claimed that its products represents 14% of the global market share that year. 5

JTI is working to expand its market of both traditional and emerging tobacco products. The company’s website emphasises this strategy: “achieving ever-greater quality and sustainability within our conventional products or developing new vaping products”. 6

Employees or Board Members: Past and Present

The company’s executive committee has 18 members. Eddy Pirard, a Belgian national, was appointed as President and Chief Executive Officer in 2017. Other members are: Koji Shimayoshi | Roland Kostantos | Vassilis Vovos | Howard Parks | Daniel Torras | Takehiko Tsutsui | Suzanne Wise | Wade Wright | Bilgehan Anlas | Yves Barbier  | Antoine Ernst | Stefan Fitz | Marchant Kuys | Hiroyuki Miki | Jorge da Motta | Andrew Newton | Kevin Tomlinson. 7

Previous members: Pierre de Labouchere | Thomas McCoy | Martin Braddock | Paul Neumann | Fadoul Pekhazis | Michel Poirier | Bill Schulz | Takehisa Shibayama | Mutsuo Iwai | Paul Bourassa | Jörg Schappei | Frits Vranken.

Affiliations

Memberships

In 2020, JTI declared membership of the following organisations on the European Transparency Register: Tobacco Europe | European Smoking Tobacco Association | European Cigar Manufacturers Association | Business Europe | Japan Business Council in Europe | British Chamber of Commerce in Belgium | American European Community Association | Center for European Policy Studies | Kangaroo Group | Ambrosetti Club Europe | Public Affairs Council. 8

JTI also declared giving donations to organisations such as Forest EU, Consumer Choice Center and EPICENTRE, of which JTI are not members. The company spent EU€800,000 – EU€899,999 in 2019 on activities covered by the register such as consultancy and membership fees. 8

JTI is also a member of the following lobby groups and trade associations: Tobacco Industry Platform | Associate Parliamentary Corporate Responsibility Group | European Smokeless Tobacco Council | Institute of Business Ethics | Tobacco Manufacturers’ Association (through its subsidiary Gallaher) | Confederation of European Community Cigarette Manufacturers.

Consultancies

JTI has extensively contracted consultancies to support its fight against plain packaging and graphic health warnings on tobacco packages. Examples of consultancies in this area:

  • From 2008 to 2012, JTI commissioned Europe Economics (consultancy based in United Kingdom), to perform economic analysis on proposed Plain Packaging in the UK, first considered by the UK government in 2008 and 2010. Four reports, prepared based on Europe Economics work, warned that if plain packaging were implemented, it would lead to an increase in counterfeit and/or contraband tobacco that would harm UK tobacco industry employment and reduce tobacco excise tax revenue. It also stated that a display ban would materially impair innovation, and a plain packaging requirement would probably all but end product innovation in the tobacco sector, which it claimed was an important source of enhanced consumer welfare. 9 10
  • In 2015 and 2016, JTI commissioned Andrew Lilico, Principal and Executive Director of Europe Economics to develop two reports about the effectiveness of plan packaging and its relation to the declining tobacco prevalence in Australia. The two reports published in 2015 and 2016 argued that plain packaging had no statistically significant impact upon the decline of Australia’s tobacco consumption and prevalence. 11
  • In 2008, 2010 and 2013, JTI contracted Warren J. Keegan (Keegan & Company LLC, American consultancy), to develop reports in response to the UK Department of Health Consultation on the Future of Tobacco Control (2008), the European Commission’s Directorate General for Health and Consumer Affairs proposal to increase the size of health warnings on tobacco packaging (2010), and the European Commission’s proposal to increase the size of graphic health warnings on tobacco packaging (2013). The three reports prepared by Keegan argued that there is no reliable evidence to suggest that a ban on retail display of tobacco products or plain packaging would lead to a reduction in youth smoking uptake. Additionally, Keegan concluded that there is no single study constitutes reliable evidence in respect of the potential impact of larger health warnings on consumers’ smoking behavior. 12 13 14
  • In 2016, building on the work of Keegan & Company LLC, JTI commissioned David Midgley, Professor of Marketing, to review consumer research relevant to bans on the display of tobacco products in retail outlets. The review concluded that studies are not capable of reliably supporting a hypothesis that a point of sale display ban would have any impact on smoking initiation or cessation. 15
  • In 2010, JTI contracted Daniel Gervais, Professor of Law at Vanderbilt University, to prepare a report on the compatibility of plain packaging measures with the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) and the Paris Convention for the Protection of Industrial Property (the Paris Convention). The report listed how it will be challenging for countries to implement plain packaging while also fulfilling their commitment to TRIPS and Paris obligations. 16
  • In 2010 and 2016, Laurence Steinberg, Professor of Psychology, was commissioned by the law firm Freshfields Bruckhaus Deringer, LLP (instructed by JTI) to prepare reports on adolescent decision making and the prevention of underage smoking. One of the two reports’ conclusions was that the impact on adolescent smoking of changes in cigarette packaging or in the display of cigarette packages is likely to be very small at best. 17 18
  • In 2010, 2012 and 2013, Timothy M. Devinney prepared three reports for JTI. These reports argue that the evidence base used by the European Commission during its impact assessment of tobacco control measures, including plain packaging, did not provide a sound evidence base linking these measures to key outcomes, including reducing underage smoking initiation and increasing smoking cessation. 19
  • In 2015, Philippe Février, Romain de Nijs and Dorian Beauchêne, of the French consultancy MAPP, prepared a report for JTI that analysed the impact of implementing plain packaging on the tobacco sector economics in France. The report claimed that the implementation of standardised tobacco packaging in France would lead to a decrease in the French tax revenue. 20
  • In 2017, JTI contracted CanvasU, an Australian consultancy company to carry out a national survey in Australia to explore public opinion on the plain packaging policy implemented in 2012 (see: Plain Packaging in Australia). The CanvasU study included outputs that could be used to discredit governmental policies. For example, the report stated “80% of Australians believe the Australian government wouldn’t change or would be reluctant to change a preferred policy even if the evidence was weighted against it”; 21 this wording could be used to raise concerns among public and decrease confidence in public health measures.

Think tanks, front groups and third party

The Tobacco Control Research Group of University of Bath has previously asked JTI about its funding of the think tanks active in the smoking and health debate in the UK. The company replied: “Please note that we do not wish to participate in your research”. 22

However, other sources show that JTI has previously donated to institutes all over the world such as Digital Coding & Tracking Association | Atlas Network | Consumer Choice Center | International Chamber of Commerce |  Institute of Economic Affairs | Institute for Democracy and Economic Affairs23 | Institute for Democracy and Economic Affairs in Malaysia24 | Japan’s Smoking Research Foundation. 25

Additionally, a review by TakeAPart, an initiative of the Campaign for Tobacco-Free Kids, showed that JTI has previously donated to Retailers Against Smuggling | International Trademark Association | Americans for Tax Reform | Cato Institute | Institute for Democracy and Economic Affairs | Adam Smith Institute | Austrian Economics Center | Center for Liberal Democratic Studies | Center for Social and Economic Research | Ekonomichna Pravda | Hibernia Forum | Tax Payers’ Alliance | Ukrainian Economic Freedoms Foundation | Forest EU | Kangaroo Group. 26

Tactics

Claiming a public health role

In the European Transparency Register, JTI declares public health as one of its fields of interest. 8 JTI argues that it should participate and engage in the process of regulation. 27 The company claims benefiting public health through its strategy of introducing “reduced risk products”, 28 and fighting illicit trade in tobacco products. 29 However, JTI continuously opposes public health policies to control tobacco use. 30 JTI claims that the decisions of the Conference of Parties to the WHO Framework Convention on Tobacco Control (FCTC) are excessive and controversial tobacco control measures. 31

Undermining public health policies

In 2020, JTI developed new product variants to replace menthol cigarettes as a way to circumvent the EU ban on menthol and other ‘characterising flavours’, which came into force in May that year. These included menthol flavoured cigarillos and cigarettes containing “distinctive blends” of tobacco. These new cigarettes were promoted under the logo “menthol reimagined”, alongside  JTI’s Next Generation Products (NGPs). 32 For more information see Menthol Cigarettes: Industry Interests and Interference

In addition to the numerous consultancies commissioned by JTI to lobby against graphic health warnings and plain packaging, in 2018 the company started a global campaign against plain packaging stating that it is raising awareness of excessive regulation.33This campaign is called “The Future of Brands” and, in addition to advocating against plain packaging, it invites other industries to join the campaign (including food and  alcohol) before similar regulations affect them. 33

During the COVID19 pandemic, it was reported that Zambian farm workers risk their health for Japan Tobacco International.34 While the public health advice was clearly mandatory mask-wearing, children and women working in tobacco farms were left without enough masks or guidance on the proper way to wear them. The STOP initiative reported that “JTI is trying to paint itself as part of the solution to the COVID-19 pandemic with so-called corporate social responsibility acts that support other parts of its supply chain, like donations to support independent retailers in the UK. But it seems to have forgotten about the women and children who risk their health to fuel the company’s profits in the midst of a pandemic”34

Targeting women and girls

JTI contributed to a systematic campaign, run by major tobacco companies, to promote tobacco use among women. JTI brought out limited edition ‘V-shaped’ packs of Silk Cut in 2011, within the same period that British American Tobacco introduced Vogue Perle, and Philip Morris launched Virginia S by Raffles. 35 JTI tried to take advantage of the growing female smoker population and launched the Glamour cigarettes that target women in a number of countries. 36 It was also reported that JTI has previously used marketing techniques targeting schoolgirls and mothers. 37

For more information see our page on Targeting Women and Girls.

Targeting kids and minors

A study by the Campaign for Tobacco-Free Kids revealed that tobacco companies, including JTI, pay social media influencers on social media platforms to advertise tobacco products. This marketing strategy exposes kids to advertising and promotes tobacco use among young social media users. It was also reported that JTI brands Winston and Camel were seen around schools in eight countries. 26 JTI stands against evidence-based public health interventions and claims that “Extreme measures, such as plain packaging of tobacco products, display bans or other proposals based on the attractiveness of tobacco products, will not eliminate smoking by minors, or cause minors to stop smoking”. 31

Involvement in smuggling

JTI uses illicit trade as pretext to fight tobacco control public health policies. JTI claims that “excessive” tobacco regulation creates environments in which the black market thrives. The company states that public health interventions such as higher taxes create appealing profit margins for criminals, while plain packaging is a gift to counterfeiters, making cigarette packs very easy to copy. 38

In 2011, the Organised Crime and Corruption Reporting Project (OCCRP) unveiled the results of a major investigation into JTI Involvement in Smuggling. The report shows very serious issues such as the involvement of the company’s distributor in smuggling, cases where JTI stayed idle when informed about suspected smuggling situations, and even expanding its business by collaborating with an alleged smuggler. 39

Despite the research suggesting involvement by the tobacco industry in smuggling, and against the WHO FCTC and its Protocol to Eliminate Illicit Trade in Tobacco Products that prevents their Parties from engaging with tobacco industry unless necessary, JTI signed voluntary memoranda of understanding with 42 countries and trained more than 580 law enforcement and customs officers around the world on counterfeit recognition in 2016 alone. 40

JTI portrays itself as a victim of illicit tobacco trade. The company launched an anti-illicit tobacco campaign in the United Kingdom called “Don’t Be Complicit In Illicit”. It engages in and monitors European Union policies on anti-illicit trade. It funds, alongside other tobacco companies, the Retailers Against Smuggling, an Irish organization that organises retailers’ efforts to prevent illicit trade in the country. It also contracted, alongside other tobacco companies, a KPMG study that reported that one in every ten cigarettes consumed in the European Union in 2013 were illicit. 26

For more information see our page on JTI Involvement in Smuggling.

Violating national and international law

There have been a number of reported cases that suggest that JTI has violated national tobacco laws in a number of countries. In 2018 the Bangladesh Anti-Tobacco Alliance demanded punitive action be taken against JTI, in Bangladesh, for violating the national tobacco control law by distributing free, JTI-branded merchandise including cigarettes, T-shirts, mobile phones, rice cookers, ceiling fans, umbrellas with their logo at points of sale. 41 In Singapore, JTI was fined SG$15,000 (US$10,700) in 2020 by the Singaporean government for distributing cigarettes without a license against the obligations of the national tobacco law. 42

A United Nations’ report released in 2019, linked JTI to companies that risk contributing to violations of international human rights and humanitarian law. The report listed Japan Tobacco in Myanmar as one of the companies that have a joint venture with the Myanmar Economic Corporation (MEC), one of the two major conglomerates and holding companies operated by the Burmese military. The companies identified in the report are tied to Myanmar’s military that has used its own businesses, foreign companies and arms deals to support operations against the Muslim minority ethnic group of Rohingya people in the country. 43 44 JTI responded to the United Nations Independent Fact-Finding Mission on Myanmar by a letter stating that: “it is incorrect to state that Japan Tobacco in Myanmar has a joint venture with MEC”. 45 The United Nations’ report made minor corrections after representations following its publication. The update stated: “None of the information received requires the Mission to change or alter any of the main findings or recommendations of its report”. 46

Additionally, as Japan is a Party to the WHO FCTC, it was reported that the state ownership of JTI with the huge financial revenue of the company influencing the country’s policies contradicts the Article 5 of the treaty that mandates Parties to protect their public health policies from commercial and other vested interests of the tobacco industry. 47

Lobbying officials and MPs

JTI, similar to all major tobacco companies, uses political spending to lobby governments to serve its business goals. In 2018, JTI spent approximately US$85,000 in the USA on lobbying activities. 48

Tobacco Industry Hospitality for UK Politicians: JTI has been the most active tobacco company in offering UK politicians hospitality, with politicians accepting JTI-sponsored tickets to various events, including the Chelsea Flower Show, Glyndebourne Opera Festival, Cricket Test Matches at the Oval, the Rugby World Cup, and a rock concert. 49

Brussels Lobbying: Until January 2011, JTI’s Brussels office was headed by Thierry Lebeaux, who previously worked for the PR company Citigate Dewe Rogerson. 50 His successor was Paolo Bochicchio. 51 In his prior role, Bochicchio was the EU Government Affairs Director for the European Plastic Converters (EuPC). 52 As mentioned in the section named “Affiliation” in this page, in its lobbying register declaration, JTI declares it lobbies European institutions through a number of organizations.

Intimidating governments with litigation or the threat of litigation

JTI uses litigation as a tool to challenge public health interventions. The Campaign for Tobacco-Free Kids on their TakeAPart initiative’s website lists some examples of JTI usage of litigation: 26

  • Australia, 2012: JTI, British American Tobacco (BAT), Philip Morris International (PMI), and Imperial Tobacco (now Imperial Brands), brought legal challenges against Australia’s plain packaging See Australia: Challenging Legislation for more detail. The High Court in Australia ruled in same year that plain packaging law was constitutionally valid. 53
  • Thailand, 2014: JTI Thailand challenged a proposed increase of graphic health warnings on tobacco packaging to 85 percent of the package surface. The Supreme Administrative Court ruled in favour of the implementation of the intervention.
  • Ireland, 2015: JTI Ireland threatened Irish Ministers with legal action if they failed to promise that no further steps will be taken to enact the draft plain packaging law. The government went forward and implemented plain packaging.
  • France, 2016: JTI, BAT, and PMI brought six legal challenges against France’s plain packaging regulations; all six challenges were later dismissed by the French high court.

Corporate Social Responsibility activities

Similar to other tobacco companies, JTI uses “corporate social responsibility” (CSR) activities to gain the appearance of respectability. Such activities are prohibited by the WHO FCTC as they manipulate public opinion. In 2015, JTI declared spending JP¥8967 million on community investment programmes in 64 countries. 54 For more information on how tobacco companies use CSR as a company strategy, see our page on CSR Strategy.

A prominent example that clearly shows how such activities are exaggerated and used for marketing purposes is JTI’s “Employment Project”. This project is advertised on JTI’s website as a major initiative by the company that was launched in response to the economic crisis in Spain in 2012. However, in 2020, after 8 years of the project, it is reported on the company’s website that the project provided only 19 full-time jobs in addition to 6 part-time jobs. The way the project is portrayed in the company’s website is that it has huge social output and contribution to solving the implications of Spain’s economic crisis. 55

In their efforts to look responsible and to cover the harms of deforestation caused by excessive wood use during tobacco curing, the tobacco industry claims a role in saving environment by supporting afforestation programmes. 56 From 2007 to 2014, the Japan Tobacco Group partnered with Total LandCare, NGO, to fund reforestation programmes in Tanzania and Malawi. 57 To read more about how the tobacco industry using donations to environmental programmes and charities to greenwash its business, visit our Greenwashing page

In 2000, JTI launched a scholarship program for journalists that has been running on annual basis since then. This training gives journalists opportunities to meet EU officials formally and informally. By 2020, over 250 journalists had joined this program, which is administered by the British Romanian Chamber of Commerce. 58

Discrediting proven science

As mentioned earlier in the section called “Consultancies”, JTI has extensively contracted consultancies to support its fight against plain packaging and graphic health warnings on tobacco packages. The outputs of these commissioned works consistently criticise evidence-based studies that show the effectiveness of plain packaging as an effective public health intervention for tobacco control.

JTI has also funded anti-regulation publications. JTI has paid EU€10,000 to commission a special edition of Euractiv entitled “Regulating Consumers?”. 59 More on how the tobacco industry supports self-regulation in favour of formal intervention can be found on our page on EU Better Regulation.

In 2019, JTI used a study on illicit trade in Malaysia to support its position against a tax increase on its products. Although this study was funded by JTI, the company did not disclose this information to the government. 60

In 2002, it was revealed that the writer and philosopher Roger Scruton, who wrote a pamphlet by the IEA attacking the World Health Organisation in 2000 for its campaign against tobacco, was on the payroll of JTI. 61 See Attacking the WHO.

Partnership with governments

As discussed above, JTI presents itself as a company that has a role in public health. Giving the obvious conflict of interest, any involvement of tobacco industry including JTI in the public health dialogue is banned by the WHO FCTC. However, JTI engages with many governments all over the world in policies dialogue in areas of customs control, illicit tobacco trade, and taxation. 26

Next Generation Products

Like its competitors, JTI has been investing in novel and emerging tobacco and nicotine products. These products are known as next generation products (NGPs) and are often publicly linked to tobacco companies’ harm reduction strategies and labelled “reduced-risk products” (RRPs). See Next Generation Products: Japan Tobacco International for more information.

Tobacco Tactics Resources

Japan Tobacco Group

Targeting Women and Girls

JTI Involvement in Smuggling

Tobacco Industry Hospitality for UK Politicians

Australia: Challenging Legislation

Next Generation Products: Japan Tobacco International

External Resources

Japan Tobacco International company website

References

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