This is one of six geographic regions of the World Health Organization (WHO). This region includes 22 countries, with a total population of nearly 679 million people.¹

Smoking in the Eastern Mediterranean Region

The latest WHO tobacco trends report, 2019, projects a smoking rate (properly called tobacco prevalence) of 18.6% in the EMR in 2020. The report expects a tobacco prevalence decrease in the region from the estimated 20.5% in 2015 to 17% in 2025. This decrease will however mean an increase in numbers of tobacco users from the estimated 90 million in 2015 to 94 million in 2025 because of population growth.²

The report also shows a huge difference in tobacco prevalence according to gender with 33.3% tobacco prevalence among males but just 3.9% among females. Another remarkable difference is the tobacco prevalence across different countries in the region. It starts at 9.6% in Oman and reaches 42.6% in Lebanon.²
The EMR has the highest waterpipe use as compared to any other region. Waterpipes are a particular method of consuming tobacco with it heated and drawn through water in inhaled via a pipe., It is estimated that schoolchildren aged 13–15 use waterpipes more frequently than cigarettes.³ Studies indicate mean prevalence estimate of ever use of waterpipe of 31.9% among adults in the EMR.⁴

Tobacco in the Eastern Mediterranean Region

Out of the 22 countries of this region, at least 14 countries grow tobacco and at least seven countries manufacture it. The following table shows a summary of agriculture and production of tobacco in the EMR (table 1). This table is based on fact sheets prepared jointly by WHO and the United Nations Conference on Trade and Development in 2015. However it is believed that both agriculture and production are much higher now.⁵

Table on agriculture and production of tobacco in the EMR

Who dominates the market?

The tobacco products that destroy so many people’s lives are the result of the activities of a number of companies around the world. The Tobacco Supply Chain Database enables tobacco control researchers and advocates to understand what the supply chain is, where it is located and who is involved. For more information, access the database here.

The cigarette market in the EMRO region is dominated by international and multinational companies, with their brands being the most sold cigarette in at least 12 countries. Locally produced cigarette brands are still the highest sellers in at least four countries. The waterpipe market shows a growing presence from multinational companies.⁶⁷

Table showing countries with most sold cigarette brand owned by international and multinational companies

Table showing the countries with most sold cigarette brand owned by local companies

Table giving examples of the dominant brands of waterpipe in the region

Links to governments

The industry aims to make sure it is well-represented

The industry has an established strategy in the region to lobby political figures and governments to serve its benefits. This strategy indicates links between tobacco industry and senior officials in the region trying to influence their decision making process.¹⁹
It is reported that the tobacco industry used corporate social responsibility activities as a strategy to access officials in Egypt, Jordan, Lebanon, Morocco, Pakistan, Tunisia and the United Arab Emirates. An example of the industry lobbying in the EMR is in trying to influence the countries’ selection of their representatives to the Conference of Parties (COP) of the WHO Framework Convention on Tobacco Control (WHO FCTC). Tobacco industries have pushed countries to send representatives from non-health sectors, who may see tobacco as a business rather than a health hazard.²⁰

There are state-owned and state-supported companies in number of EMR countries such as the Eastern Company in Egypt, Iran Tobacco Company in Iran, National Tobacco and Matches Corporation in Tunisia, Regie Libanaise des Tabacs et Tombacs in Lebanon, Régie des Tabacs in Morocco, and Kamaran Industry and Investment in Yemen. Most of these companies are a monopoly in charge of production, importing, and exporting tobacco products.²¹

Examples of good practice

Iran, one of the leading tobacco control countries in the region, is reported to be a successful country in resisting tobacco industry interferences by adherence to the WHO FCTC Article 5.3 guidelines. Iran bans corporate social responsibility activities by the tobacco industry and does not accept any support from or presence of the representatives of the Iranian Tobacco Company, a state monopoly, in its tobacco control policy making process.²²

Saudi Arabia, another leading tobacco control country in the region, has issued a policy to regulate communication and interaction, if required, between the government officials and tobacco industry. The policy reflects the principles and recommendations of Article 5.3 of the WHO FCTC. ²³

Roadmap to tobacco control

Most countries of the EMR are parties to WHO FCTC with 19 out of 22 countries have ratified joining the treaty.²⁴ Additionally, six countries of the region are parties to the Protocol to Eliminate Illicit Trade in Tobacco Products.²⁵ Most countries of the EMR have tobacco control laws.²⁶ However, the strength of such laws varies dramatically from a country to another.²⁷

The WHO Report on Global Tobacco Epidemic 2019 shows that out of the 22 EMR countries there are six countries that have recent, representative and periodic data on tobacco prevalence for both adults and youth; seven countries that have legislation banning smoking in all public places; three countries that have national quit line and both nicotine replacement therapy and some cessation services cost-covered; five countries that have large pictorial warnings on tobacco packages; four countries that have conducted national tobacco control campaign aired on television and/or radio; ten countries that have legislation banning all forms of direct and indirect advertising; and three countries that have a tax on retail price on the most popular brand of cigarettes higher than 75%.²⁸

Although the number of countries having such powerful tobacco control measures is not high, most of the EMR countries have at least some tobacco control measures. Most have implemented measures that puts them in the middle of their way to meet the comprehensive and recommended measures of tobacco control by the WHO FCTC. The report also shows that despite the existence of tobacco control laws, the compliance to such laws is challenging. For example, the report puts only one country in high compliance category out of the seven countries that have legislation banning smoking in all public places, and puts only five countries in high compliance category out of the ten countries that have legislation banning all forms of direct and indirect advertising. This compliance assessment highlights a huge gap in enforcement of existing legislation.²⁷

Stakeholders of tobacco control in the EMR includes governments, international intergovernmental organizations, non-governmental organizations, and academic institutes. Most countries of the EMR have a tobacco control unit within their ministries of health. Most international intergovernmental organizations that are accredited as observers to the COP are present in the EMR including the Arab League that 19 of the EMR countries are included in its members.²⁹ However the presence of non-governmental organizations accredited as observers to the COP is less noted in the EMR.³⁰³¹

Some academics in the region work in the field of tobacco control research with an example of the American University in Beirut hosting the Knowledge hub of FCTC on waterpipe.³² The WHO is present in the region through the Tobacco Free Initiative Unit in their office for the EMR, in addition to tobacco control focal point in the organization’s country offices.³³

Industry interference

Published literature shows that the EMR has been suffering from tobacco industry interferences for many decades. Such interferences undermine efforts of tobacco control in the region leading to continuous high prevalence of tobacco use. ³⁴ The following are themes and examples of tobacco interferences in the EMR.

Illicit trade

The tobacco industry claims to combat illicit trade but that contradicts their overproduction in some markets and oversupplying to others and in the knowledge that excess tobacco will end up on the illicit market. In the region, the tobacco industry continued to supply the contraband trade despite appeals by the government to cease undermining its revenues.³⁵ The magnitude of illicit trade in both cigarettes and waterpipes is huge within the EMR with studies referring to the tobacco industry involvement either through the producers or the distributers of tobacco, using various routes to, from and across the region. ^363738394041

Hijacking public health policies

The industry aims to undermine tobacco control efforts through their links to governments in the EMR.¹⁹ For example the tobacco industry manoeuvrings to hijack the track and tracing systems of tobacco products in the EMR. Although, as discussed earlier, the links between the tobacco industry and illicit trade are studied and observed, there is still an ongoing process of signing memorandums of understanding between them and the governments in many of the EMR allowing the industry to have links with customs and giving them the opportunity to influence the new track and tracing systems.⁴²

Influencing taxation policies

Internal documents of the tobacco industry show their efforts in delaying the establishment of unified tax increases across the Gulf Cooperation Council’s countries that consists of six of the EMR countries; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.⁴³ An internal Philip Morris memo showed how they work strategically to influence the tobacco taxing system in Egypt through range of interferences including lobbying at all levels of the authorities.⁴⁴ In Pakistan, the tobacco industry did changes in cigarette prices at their advantage by shifting some of their most sold brands to the lowest tax slab allowing itself to manipulate the market by price setting.⁴⁵

Expanding of multinational companies

The expansion of multinational companies in the region as part of the industry’s strategy to shift from developed markets, where tobacco control policies are strong and smoking prevalence is declining, to emerging markets where demand for tobacco is higher and tobacco control legislations are weaker. Additionally, local companies such as Eastern Company in Egypt are expanding as well.⁴⁶ A prominent example for the expansion of multinational companies in the EMR is the increasing investments of Japan Tobacco International in the region. The company bought two major tobacco manufactures in the EMR: the Egyptian waterpipe company Nakhla and the Sudanese cigarette manufacturer Haggar, which gives Japan Tobacco access to export its products to 85 countries, mainly in the EMR and Africa.⁴⁷⁴⁸

Promoting Next Generation Products

The tobacco industry is aggressively promoting electronic nicotine/ non-nicotine delivery systems and heated tobacco products in the region and has already launched them in number of countries such as Kuwait.⁴⁹ It is also expected that an international “vaping expo”, first of its kind, will be held in the United Arab Emirates in 2020 to frame the future of such products connecting manufacturers, distributors, and users of the products.⁵⁰ Although these products are being promoted globally by the industry, the case in the EMR is unique as electronic cigarettes were already banned in 11 out of the 22 countries of the region in 2017.⁵¹ However, the situation is dramatically changing with Saudi Arabia, one of the leading tobacco control countries in the region, reverting its legislation and allowing electronic cigarettes, raising fears that a domino effect will take place allowing the product in the rest of EMR.⁵² The industry is using number of interferences to promote these products such as lobbying policy makers and targeting youth with false information and by adding favourable flavours to its products.⁵³

Corporate social responsibility activities

Tobacco industry maneuvers to manipulate public opinion to gain the appearance of respectability happen across the countries in the EMR. For example, funding the education of women from Afghanistan in western universities by British American Tobacco;⁵⁴ donating to cancer screening and treatment hospital in Egypt by Eastern Company for Tobacco;⁵⁵ and funding projects for education in Pakistan, Jordan, Lebanon, Morocco, and Palestine by Philip Morris International.⁵⁶ Additionally, the industry sponsor popular sports such as the Egyptian Eastern Company for Tobacco sponsoring a football team carrying its name and playing in the Egyptian football league.⁵⁷Multinational companies also sponsor sport teams to brand their products such as British American Tobacco branding their electronic cigarette on McLaren cars (motorsports team) in the Bahrain Grand Prix, and Philip Morris International using Ducati (motorcycle team) for branding at the Qatar MotoGP.⁵⁸

Use of influencers and allies

A clear example of this well-practiced tactic is the visit of prominent doctors from number of Egyptian medical schools to a Philip Morris International factory in Switzerland, and then posting on social media about the visit claiming that it was supported by the WHO to check a new product of the company that has no side effects. The WHO issued a press release to condemn the incident and to deny any support to such tobacco industry maneuvers. The doctors removed the post from social media after the WHO press release.⁵⁹The industry is also active in approaching universities to keep its presence among youth and to recruit best qualified graduates in the region to keep growing. For example, British American Tobacco is listed as partner to the American University in Cairo in conducting employment fairs, After conducting such meetings, BAT publish news about it, which gives the impression that they are linked somehow to this prestigious university.⁶⁰⁷

Generating industry-funded science

The tobacco industry use of research and policy forums is a well-known strategy to influence policy-making processes. In the EMR there is an example of funding research institute in Pakistan with thousands of dollars to conduct studies in the field of tobacco. This fund from the Foundation for a Smoke-Free World, which is a Philip Morris International funded organization. There are also examples of think tanks in the EMR that are allied with the tobacco industry which are the Egyptian Center for Public Policy Studies and the Pakistani Policy Research Institute of Market Economy. Both think tanks opposed plain packaging of tobacco products despite the fact that it is an evidence based public health tobacco control intervention.⁶¹

Benefiting from emergencies and political instability

Tobacco industries look to use political instability as an opportunity to increase illicit trade and shape tobacco control policies in their favour. A number of countries in the region requested that tobacco control in protracted complex emergency situations should be an item for discussion during the COP of the WHO FCTC.⁶² As a result of such discussion, the COP made a specific decision in this regard aiming to providing technical and financial assistance to countries in protracted complex emergency situations, and requesting countries to pay special attention to Article 5.3 of the WHO FCTC and related Guideline.⁶³

Tobacco Tactics resources

• JTI Involvement in Smuggling
• Gallaher Versus its Cypriot Distributor
• CSR Strategy
• Motorsport Sponsorship
• Foundation for a Smoke-Free World
• Think Tanks

References

The post Eastern Mediterranean Region appeared first on TobaccoTactics.

See also:

• New Gallaher Documents Reveal Extent of Smuggling Activities
• Ocean Traders

Facilitation and “Permitting” of Smuggling

Between 2005 and 2008, a bruising legal battle fought by Gallaher exposed its own facilitation of tobacco smuggling. More than 20,000 internal documents were disclosed in the course of litigation between Gallaher and its former Cypriot distributor, Tlais Enterprises.
A subsequent investigation by The Sunday Times ^{64 65 66} revealed that many of these internal documents “raise serious questions about Gallaher’s own complicity in facilitating worldwide smuggling, sanctions busting in Iraq and the dumping of sub-standard cigarettes in Africa and Afghanistan”.
A witness statement by a former Gallaher director Norman Jack contended that “Gallaher’s board operated a policy of ‘willful blindness’ while instructing him to sell billions of cigarettes, a substantial proportion of which ended up being illegally diverted back into the European Union,” according to the Sunday Times.

“We are Not Seeking to Build Brands”

Norman Jack was the director Gallaher appointed to implement a new and undeclared “trading policy”, which was laid out in a memo written by then chief executive Peter Wilson to his senior managers in May 1999. It said: “As a consequence of the disruption to our business in Russia we should be seeking alternative sources of business in the short term in order to provide some compensation and to maintain throughput in our factories”. ⁶⁷
In a reflection of the policy to just export cigarettes rather than build market share in host countries, the memo went on to state: “The essence of trading business is that we are not seeking to build brands.” ⁶⁸
Such was the mass export of Gallaher brands, predominantly Sovereign and Dorchester, to markets where there was little or no known consumption of them, that by 2004, three-quarters of all genuine British cigarettes seized coming into the UK were rerouted Gallaher brands.
In his ruling, Mr Justice Clarke described Gallaher’s approach as irresponsible and carried out “in the knowledge that a substantial proportion would end up being smuggled”. Clarke’s judgement also blamed Gallaher for the increase in smuggling. ⁶⁹

No Due Diligence

The judgement repeated the accusation that the company did not carry out “detailed due diligence” of its supply chain. The Sunday Times alleged that:

Jack said Gallaher tried to ring-fence senior management from possible prosecution. ‘I told Peter Wilson that once we started to go down this road we would not be able to just stop. Gallaher could not bear to be behind (British rival) Imperial (Tobacco) in the stock market. (They) checked with outside barristers what their position was and were told, ‘If you don’t ask you don’t know what the answer is’…They adopted a policy of willful blindness, and I’m being charitable when I say that.’⁶⁶

In one statement, seen by the paper, Jack claims he was advised not to leave a paper trail, not to ask searching questions about shipments, or to attend meetings where this was discussed:

We were all aware that we were embarking on business that was potentially extremely risky…By following this course we could never be accused of conspiring to smuggle as no meeting had taken place and it was always possible to deny knowledge of everything and blame the distributor. ⁶⁶

According to the Sunday Times:

Jack’s evidence and disclosed internal documents suggest that behind the corporate veil it was business as usual the late nineties: Gallaher continued volume selling its cigarettes, indifferent to the smuggling risks.

The company was even accused of going to elaborate lengths to facilitate smuggling. Another example was from a document, dated 16 May 2003, where Gallaher wrote to a South African distributor which Customs had warned eight months earlier was a major smuggler into the UK. The documents revealed that, rather than pressing the distributor to stop smuggling, Gallaher advised it simply to form “a new company” to receive further cigarette shipments from the UK. Under cross-examination during the trial, Tom Keevil, then Gallaher’s general counsel, described the matter as a “dog’s dinner”.
Other allegations concerning Gallaher, contained in separate legal documents submitted to a Cypriot court, that were reported in the Sunday Times, accused the tobacco company of “colluding with Customs to mislead parliament about alleged complicity in tobacco smuggling”.⁶⁵ Gallaher and British Customs denied the charges.

Sanctions Busting

Saddam Hussein

The legal case also uncovered evidence that Gallaher had facilitated the smuggling of cigarettes into Iraq, despite United Nations sanctions. The UN sanctions against Iraq had been in place since the conclusion of the first Gulf war in 1991, and were lifted only after the US invasion in March 2003.
However, disclosed documents show that in 2000 Gallaher manufactured to order 44 million cigarettes with the unique Iraqi health warning on the packet. These were sold to several distributors who moved them into Iraq through Turkey and Jordan.
Tlais Enterprises also alleged that there was a meeting between a senior Gallaher executive and Uday Hussein, Saddam Hussein’s son and that the meeting was to follow up on the supply of cigarettes to Iraq despite United Nations sanctions. Gallaher said in a statement at the time that any “imports were made without (its) knowledge or consent” and it had “no convincing evidence” that its executives were involved. ⁷⁰
Nevertheless, at the High Court, senior Gallaher management admitted that between 2004 and 2007 the company had made four declarations to Customs under the Proceeds of Crime Act. The Sunday Times⁶⁶ wrote that: “These letters are understood to notify Customs of the possibility that Gallaher had traded on illegal profits from Iraq. One of the declarations was from the law firm representing Japan Tobacco, which sent it while carrying out due diligence during its acquisition of Gallaher.”
In a statement made after the hearings, Jack said:

I feel I have been set up by Gallaher to take the blame for the actions of others … My conduct was at all times consistent with company policy and the advice and instructions I received (from board members).

Tlais Enterprises even sent Japan Tobacco International what it called “a buyer beware notice” before the acquisition of Gallaher was agreed, warning the Japanese that there might be issues of due diligence that they should be aware of. ⁶⁶

Dealing with Hezbollah

Hezbollah

Documents lodged at the High Court in the acrimonious legal battle between Gallaher and Tlais Enterprises also accused the tobacco giant of agreeing to “enlist” the services of a militant Islamic group, Hezbollah. ⁷⁰
Tlais claimed that the firm agreed to an approach to Hezbollah to recoup taxes of £1 million that it had paid to the Iranian government, which funds the organisation. If successful, Hezbollah was allegedly promised a “success fee” of up to £287,000. Tlais Enterprises stated in its High Court claim: “Gallaher enlisted the services of a Middle Eastern group (that is proscribed in the US) to negotiate on its behalf, in an attempt to recover the duty.” Gallaher subsequently “denied categorically” that it had entered into any arrangement with Hezbollah, and in any way the duty was not recovered this way.⁷⁰

“Spotted and Stained” Cigarettes

Another issue that arose during the court case was the repeated problem of spotted and stained cigarettes, which is a by-product of cigarettes being kept in high temperature / humid conditions. ⁷¹

Relevant TobaccoTactics Resources

• This page is part of the historical section of Tobacco Smuggling, which also includes:
• Imperial And Gallaher Involvement in Tobacco Smuggling
• BAT Involvement in Tobacco Smuggling
• Also see the page on current Tobacco Smuggling in the UK.

References

The post Gallaher Versus its Cypriot Distributor appeared first on TobaccoTactics.