• Menthol and flavoured cigarettes are widely available in low and middle-income countries (LMICs) many of which have high smoking rates
• LMICs have young populations – flavours appeal to young people, who may not understand the harms of flavoured tobacco
• Recently high-income countries have put bans in place; at the same time there has been marked growth of menthol market share in some LMICs
• There is a lack of regulation to reduce the appeal of flavours e.g. plain packs and advertising bans at point-of-sale or near schools
• Targets for new and improved bans include flavour capsules, and flavour references on packaging and cigarette sticks
• A ban on all flavourings may be easier and more effective in preventing product substitution
• A lack of data, especially in low-income countries, hinders the development of good regulation
• Multinational tobacco companies can threaten income from tobacco exports if governments attempt to put tobacco controls in place

This page covers flavoured tobacco, including menthol cigarettes, in low and middle-income countries (LMICs).¹²

Background

Flavoured tobacco products are available in various forms around the world, including products previously only used in particular regions or countries. For example in Indonesia, the vast majority of smokers use kretek, clove-flavoured cigarettes,³⁴ and they are now available in other countries.⁵⁶

Flavoured tobacco is used in waterpipe, a device which originated in middle-eastern countries and is increasingly popular elsewhere, including among young people.⁷

Here we focus on what are often called ‘conventional’ products, like cigarettes and cigarillos, which are sold by large transnational tobacco companies (TTCs): Philip Morris International (PMI), British American Tobacco (BAT), Imperial Brands (IMB, previously Imperial Tobacco) and Japan Tobacco International (JTI) (JTI also owns Nakhla in Egypt, which produces flavoured waterpipe) We summarise findings from Tobacco Control Research Group (TCRG) research on the extent of flavoured and menthol cigarette use in LMICs and the development of the market for ‘capsule’ products (cigarettes with flavour capsules in the filter).

We describe specific challenges for LMICs, including flavour regulation and evidence gathering. We then summarise flavour market evidence and research, first relating to LMICs in general and then by World Health Organization (WHO) region and individual countries (where available).

• For general background and evidence, including information on the global market, and details of specific bans and associated industry interference, see Flavoured and Menthol Tobacco.

For details of product regulation at country level, see the searchable database on the Tobacco Control Laws website, published by the Campaign for Tobacco Free Kids (CTFK). For countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) progress towards implementation of relevant articles, including newer products, is detailed in the FCTC implementation database

Specific challenges for LMICs

LMICs with no ban often have other major tobacco control policy gaps that are not necessarily menthol/flavour related but worsen the negative impact of menthol/flavours.⁸ One such policy is plain, or standardised, packaging,  which can include restrictions on flavour descriptors as well as colours on packaging which are known to signify flavour (e.g. green for menthol).⁹ However, plain packaging policies have yet to be implemented in many countries, including some high-income countries, so this would be a significant challenge in LMICs. Another relevant policy is the prohibition of marketing, especially near schools.¹⁰

Governments have more conflicts of interest in tobacco growing areas as they receive much needed foreign currency for tobacco exports,  and multinational companies can threaten this income stream if governments attempt to put tobacco controls in place.⁸¹¹  However, apart from rare exceptions the tobacco industry contributes little overall to the balance of payments.¹²¹³

Regulatory challenges

The WHO published brief guidance on the regulation of menthol and flavoured tobacco which summarised some regulatory options including restrictions on: the sale of menthol branded products,  the use of menthol at noticeable levels (giving a ‘characterising flavour’),  or banning any menthol ingredients.¹⁴  The report points to likely opposition from the tobacco industry in countries or regions with an established menthol market.¹⁴ This was the case with the European Union (EU) menthol ban which only came into full force in 2020, after the tobacco industry had successfully lobbied for a delay. Testing for characterising flavour is more difficult and expensive than a ban on ingredients; this makes banning menthol as an ingredient particularly efficient for LMICs.

The WHO noted that:

“A ban on all flavour agents that increase tobacco product attractiveness, rather than focusing on menthol exclusively, can provide an alternate route to restricting menthol, and may prevent the unwanted introduction of menthol substitutes.”¹⁴

Research and data

As of 2021, when TCRG researchers conducted a review of evidence on menthol/flavour in LMICs,¹⁵ there were very few research papers from countries in Eastern Europe, the Eastern Mediterranean region, and Africa.

Lack of data means that it is hard to monitor markets and company shares in specific countries.  Market research service Euromonitor (which receives project funding from Philip Morris International) includes no low-income countries and is proprietary, making it expensive and hard to access even for the middle-income countries which are included.

More research is needed on menthol and flavour in LMICs to help governments monitor the tobacco industry and its products, as recommended by the WHO: “An evidence base using data collected from the region of interest can provide more direct support for regulation.”¹⁴

Market in LMICs

Evidence suggests menthol and flavoured tobacco products are widely used in LMICs.  Data from the International Tobacco Control (ITC) Policy Evaluation Project suggests that menthol is smoked by more than 20% of smokers in several middle-income countries. Although the dates vary (see the note above on data challenges) this research gives an indication of the scale of the problem. The highest rates were found in Zambia (42% in 2014) and Thailand (35% in 2012). Kenya and India also had over 20% menthol smokers, with China just under just under that level.¹⁶

A study from Johns Hopkins University, between 2015 and 2017, found a range of flavoured and capsule cigarettes on the market in those LMICs with the highest number of smokers: Bangladesh, Brazil, China, India, Indonesia, Philippines, Russia, Thailand, and Vietnam.¹⁷

The main TTCs operating in these countries (PMI, JTI, and BAT) mostly sold menthol or mint flavours. China National Tobacco Corporation (CNTC) sold  a mix of flavours.¹⁷

There is also evidence from a number of studies that menthol and flavour tobacco use is rising, either as a proportion of the market or substantively.  Evidence from TCRG research shows that after the implementation of the European Union (EU) menthol ban in 2020, there was a marked increase in the share of menthol/flavoured products in some LMICs.¹⁵ A study of cigarette packs in Brazil, Indonesia, the Philippines, Russia, Thailand, and Vietnam, between 2013 and 2016, found that the number of flavour capsule variants on the market was growing.¹⁸ Most were mint and menthol flavour but with others the flavour was unclear from the product name.¹⁸

A number of studies have identified related marketing activities.  Marketing strategies for flavour capsules are likely driving their global growth particularly among young people in LMICs.¹⁹

TCRG’s review  of tobacco industry strategies underpinning the growth of menthol/flavoured tobacco use in LMICs  highlighted widespread marketing in stores (including retailers near schools), on billboards, on TV, online and via brand ambassadors. The packaging of flavoured and menthol products, legally displayed in stores, was  found to be colourful with non-conventional, appealing names for flavours.¹⁵

Tobacco companies also use symbols on cigarette sticks to indicate that they contain capsules.²⁰ Researchers studying this form of marketing in LMICs have described the space on a cigarette as “valuable communicative real estate” for tobacco companies, which could be better used to display public health messages.²⁰

Research and data from specific regions and countries is summarised below. We refer in many places to TCRG research based on 2019 cigarette market data from Euromonitor. In this data ‘high market share’ means 20% or more of the total cigarette market in that country in 2019. ‘High market share growth’ means that the share doubled between 2005-19 and was growing from 2017.¹⁵ We link to regional and country profile pages on TobaccoTactics, where available.

Africa

Nigeria has high menthol/flavour market share and high market share growth.¹⁵

Cameroon has high market share, the only other country in the region for which this data was available. (For Egypt see Eastern Mediterranean region below.)¹⁵

Tanzania

JTI sells a menthol cigarette called Sweet Menthol through its subsidiary in Tanzania. It describes this product as “the leading local mainstream menthol brand”.²¹

Zambia

JTI owned brand Sweet Menthol is the third most popular cigarette in Zambia.  It is cheap and is usually sold as single sticks.²²  On its webpage for Zambia, JTI describes itself  as a leaf farming company, and does not mention that it sells cigarettes in the country. A locally owned company, Roland Imperial,  also sells menthol cigarette brands.²³

ITC survey data showed a high prevalence of menthol smokers in Zambia, with 43% of smokers choosing the product.²⁴ Menthol was most commonly used among younger smokers, those with a middle income, and those that don’t smoke every day. Over a third of smokers indicated that they thought menthol cigarettes were less harmful than non-menthol.²⁴

Kenya

ITC survey data from Kenya also suggests a high prevalence of menthol smokers.²⁴²⁵ In 2018, 21% of smokers with a regular cigarette brand smoked menthol or sweet menthol (although Euromonitor estimates that only 7% of cigarette sales are menthol).¹⁵  More women smoke menthol than men in Kenya, and two thirds of smokers believed that menthol is less harmful than other cigarettes.²⁴²⁵

Ethiopia

In 2015, Ethiopia enacted a total flavour ban on all forms of tobacco.

• For details see Flavoured and Menthol Tobacco

This was a pre-emptive ban as flavour sales were low. However there has been a lack of enforcement at the retail level.⁸ Flavoured products are not made in Ethiopia and more collaboration with customs is needed to prevent illicit importation.⁸ There is also a lack of awareness that the ban includes waterpipe products.¹⁴

Since 2017, two years after the ban was enacted, JTI has owned 70%  the state owned tobacco company, NTE.²⁶

Latin America

Menthol cigarettes are popular in Latin America, and increasingly so in some countries.¹⁵ Guatemala and Peru have high market share and high market share growth. There is high market share in Columbia and the Dominican Republic, and high market share growth in Argentina, Bolivia and Costa Rica.¹⁵

Use of flavour capsule cigarettes is particularly high in Chile and Mexico.²⁷  According to BAT’s annual report in 2014,  sales of  flavour capsule cigarettes had increased in the region despite price rises, while overall cigarette sales were down.²⁸

A study of over 1,000 retailers located close to schools in Latin American cities (Argentina, Bolivia, Brazil, Chile and Peru) found that the majority (85%) sold flavoured cigarettes, and most (71%) sold capsule versions.¹⁰ (Similar findings were reported in Uruguay, a high income country, immediately before the implementation of plain pack regulations in 2020.)²⁹

These products were frequently displayed near the point of sale, or confectionary. Some stores also had advertisements and price promotions.¹⁰ Unconventional flavour descriptors such as “fusion blast” and “ruby ice” were very common.³⁰

Brazil

Survey data from 2016-2017 among adult smokers in Brazil found that over 50% supported a ban on menthol and over 60% supported a ban on all additives.³¹ Support did not vary across sociodemographic groups. When menthol smokers were asked what they would do if menthol cigarettes were banned, a third reported they would quit, around 20% would reduce the amount they smoked and a similar number would switch to non-menthol cigarettes. Slightly fewer said they would still find a way to get menthol cigarettes.³¹

ITC survey data from the same period suggested that 8% of smokers with a regular cigarette brand smoked menthol.³² 13% believed that menthol cigarettes were less harmful than non-menthol cigarettes, and over a third reported that they were smoother on the throat and chest.  Nearly two thirds  of surveyed smokers supported a complete ban on all cigarette additives, including flavourings.³²

An online sample of women aged 16- 26 (smokers and non-smokers) preferred packs with flavour descriptors.³³

• The tobacco industry has used a range to tactics to undermine and delay Brazil’s menthol ban. For details see Flavoured and Menthol Tobacco

Chile

In 2013, Chile sought to implement a law banning substances that cause higher levels of addiction, harm or risk, leading to tobacco industry resistance and interference.¹⁴

• For details see Flavoured and Menthol Tobacco

Mexico

Studies of retailers in Mexican cities, found that the majority sold menthol and flavoured products, and more than half of stores situated near schools sold flavour capsule cigarettes.³⁴³⁵ Many flavoured cigarettes have descriptors which suggest there is a flavour, but the type of flavour is unclear: chemical analysis of dual flavoured cigarettes suggested flavours were menthol and another flavour, for example fruit.³⁶

A study in Mexico City found that colour and flavour descriptors on cigarette packs made the products more appealing, and some smokers believed they would taste better.³⁷

Guatemala

A study of convenience store retailers in Guatemala found that all sold flavoured tobacco products.³⁸

The majority (88%) of indoor tobacco advertisements in Guatemala were found to be for capsule cigarettes.³⁸

South East Asia & Western Pacific

There is high market share of menthol/flavour in India, Malaysia, Philippines and Thailand, and high market share growth in Vietnam.¹⁵  A 2010 study noted that governments in the region had no legislation banning exotic flavours of cigarettes and cigarettes with new flavours had appeared in Cambodia, Indonesia, Malaysia and the Philippines.³⁹

Philippines

Menthol has been advertised to appeal to young women in the Philippines since the 1970s with menthol brands common for many decades.⁴⁰ PMI, JTI, BAT and Korea Tobacco & Ginseng (KT&G) all sell flavoured capsule cigarettes in the Philippines.⁴¹

Menthol packs studied in the Philippines were harder than non-menthol (for capsule protection) giving a quality feel. Flavoured capsule brands had a greater technological appeal,⁴¹ and packs were rated as more attractive by young adults.⁴²

Blue and white packs were perceived to be less harmful than other colours, as were the descriptors ‘light’ and ‘cool’, whereas the term ‘strong’ was perceived as more harmful.⁴²  Researchers called for greater action and support for banning flavour additives.

Malaysia

In Malaysia, menthol cigarette marketing has been aimed at young people and women.  In the 1980s Brown and Williamson’s Newport menthol cigarettes were marketed in Malaysia with youthful American images and were sold at a cheap price point.⁴³ An internal document from 1993 reveals how the company was developing sweet and fruit flavours for the Malaysian market. ⁴³⁴⁴ A 2003 study noted that the menthol variant of Cartier Vendome (a BAT brand at the time) was described as ‘pearl tipped’ so likely to appeal to women.⁴⁵

In 2013, vanilla, mint and fruit flavoured cigarettes were on sale, and strawberry cigarette packs with pink packaging were documented.⁴⁶

China

In China ‘flavour capsule’ was found to be one of the most common cigarette terms used in online tobacco marketing.  One website explicitly linked flavour capsules with female smokers.⁴⁷

Indonesia

In Indonesia the dominant cigarettes are kreteks which are flavoured with cloves.  Industry attempts to introduce their own cloved flavoured products had failed at least to 2004.⁴⁸  In 2009 PMI and BAT acquired two domestic manufacturers which allowed them access to the kretek market.⁴⁹ In 2009 PMI launched the first super slims kretek for women and Marlboro black menthol for young men.  By 2012 BAT had launched several kretek brands. Both companies were aware that kreteks  are particularly carcinogenic due to the presence of toxic chemical compounds: Anethole, Coumarin and Eugenol.⁴⁹

In Indonesia the flip lid of the cigarette packet was used by Esse (owned by Korean Tobacco & Ginseng, KT&G) to promote the brand with phrases evoking flavour, like “sweet surprise” and “its honey”.  Research found seven cigarette brands with capsules.  Flavours included mint, menthol, berry and honey.⁵⁰

Eastern Mediterranean

There is high market share growth in in Pakistan and Egypt .¹⁵

• See also Waterpipe for information on the role of flavours in promoting these products.

Eastern Europe

Data shows that in Russia menthol/flavour has both a high market share and high market share growth.¹⁵

Other LMICs in the region with high market share growth are Ukraine, Bosnia Herzegovina, Belarus, Azerbaijan, Kazakhstan and Uzbekistan.¹⁵

Relevant Links

WHO Advisory note: banning menthol in tobacco products (2016)

WHO Case studies for regulatory approaches to tobacco products: menthol in tobacco products (2018)

WHO FCTC decision on banning waterpipe flavour (2016)

A global map of menthol bans is available on Tobacco Atlas: Product Sales

TobaccoTactics Resources

• Flavoured and Menthol Tobacco
• Menthol Cigarettes: Industry Interference in the EU and UK

TCRG Research

A growing menace: menthol and flavoured tobacco products in LMIC, M. Zatonski, K. Silver, S. Plummer, R. Hiscock, Tobacco Induced Diseases, 2022;20(April):39, doi:10.18332/tid/146366
STOP research summary (May 2022)

Marketing of flavour capsule cigarettes: a systematic review, C. Kyriakos, M. Zatonski, F. Filippidis, Tobacco Control, Published Online First: 18 January 2022, doi: 10.1136/tobaccocontrol-2021-057082[/ref]

Flavour capsule cigarette use and perceptions: a systematic review, C.N. Kyriakos, M.Z. Zatoński, F.T. Filippidis, Tobacco Control, Published Online First: 04 October 2021, doi: 10.1136/tobaccocontrol-2021-056837

For a comprehensive list of all TCRG publications, including research that evaluates the impact of public health policy, go to TCRG publications.

References

The post Flavoured and Menthol Tobacco in LMICs appeared first on TobaccoTactics.

The Western Pacific region includes 37 countries and territories and hosts nearly 1.9 billion people. ⁵¹  The countries are Australia, Brunei Darussalam, Cambodia, China, Cook Islands, Fiji, Japan, Kiribati, Lao People’s Democratic Republic, Malaysia, Marshall Islands, Federated States of Micronesia (Micronesia), Mongolia, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Philippines, Republic of Korea (Korea), Samoa, Singapore, Solomon Islands, Tonga, Tuvalu, Vanuatu and Viet Nam.⁵²⁵¹ China, the largest country in the region, hosting 73% of its total population (1.39 billion), is home to approximately 20% of the world’s population.⁵³⁵⁴

Eleven countries (Nauru, Tuvalu, Marshall Islands, Palau, Micronesia (Federated States of), Singapore, Tonga, Kiribati, Samoa, Vanuatu and Fiji) in the WPR are among the 50 smallest countries in the world. ⁵⁵

Smoking in WPR

According to the WHO tobacco trends report, the prevalence of tobacco use reported in WPR in 2020 was 25.7% and it was the second highest prevalence following the South East Asian region (SEAR).⁵⁶

In 2020, the average prevalence of tobacco use among males and females reported were 47.9% and 3.6% respectively. Compared to other regions, male’s prevalence rate is the highest of a region, and the female prevalence rate was the lowest. ⁵⁶

The global highest prevalence of smoking among people aged >15years reported in 2020 in the WPR and it was 23.3% (384 million people). The average smoking prevalence among males and females reported in 2020 were 44% (361 million) and 2.6% (23 million) respectively.⁵⁶

According to the WHO estimates, the tobacco smoking prevalence across different countries in the region varies from 14.1% in Australia to 52% in Kiribati. The highest tobacco smoking prevalence among males was recorded in Kiribati (68.6%) and the lowest was recorded in Australia and New Zealand (16.1%). Among the female population, the highest and lowest prevalence of smoking was recorded in Nauru (46%) in Malaysia (1%) respectively.⁵⁶

With regards to the number of smokers aged >15years in the region, China records the highest with 306.2 million, which accounts for nearly 80% of total smokers in the WPR (386.5 million).⁵⁶

Tobacco Production in WPR

China is the largest tobacco producer in the WPR as well as in the world, with a production of 2.61 million metric tons in 2019.⁵⁷It accounts for nearly 40% of world’s tobacco production in 2019.⁵⁸

According to the Taxation office of the Australian Government, a license is required to grow and/ or manufacture tobacco in Australia; and there have been no license holders since 2006. ⁵⁹

Brunei Darussalam, Cook Islands, Kiribati, Marshall Islands, Micronesia, Mongolia, New Zealand, Niue, Palau, Samoa, Singapore, and Tuvalu do not grow tobacco. ⁶⁰In Solomon Islands and in Vanuatu, tobacco is growing small scale for personal use and sales. ⁶⁰

Table 1:  Summary of farming and production of tobacco in the WPR ⁶¹⁶²

*Information not available for Nauru and Papua New Guinea. Tobacco production, cultivation and cigarette manufacturing is not reported in Brunei Darussalam, Cook Islands, Marshall Islands, Micronesia, Niue, Samoa, Singapore and Tuvalu.

**N/A = Information Not available

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.

British American Tobacco (BAT) dominated the Australian and Malaysian markets with 47.6% and 68% of the market shares respectively. ⁶³⁶⁴Philip Morris International dominates the cigarette market in Philippines (70.5%)and Singapore (47%) ⁶⁵⁶⁶

The state owned tobacco monopoly in China (China National Tobacco Corporation (CNTC)) and in Japan(Japan Tobacco International (JTI)) lead the cigarettes market in the respective counties.⁶⁷⁶⁸In Lao, 72.3% of the tobacco market is owned by the Lao Tobacco Limited (LTL) since 2001, with placed joint venture with the government.⁶⁹

Local companies dominate in certain other countries, too, in the WPR: The Mongol Tobacco company (40%) in Mongolia, The Korea Tomorrow & Global Corporation (KT&G) (63.1% ) in  Korea,  and the Vietnam National Tobacco Corporation (VINATABA) (60.5% )in Viet Nam.⁷⁰⁷¹⁷²

Table 2: Countries with the most sold cigarette brand owned by an international/ multinational company.^{737464707175767778798081}

*Only countries in which data is available are mentioned in the table.

Presence of Transnational Tobacco Companies (TTCs)

Table 3 summarises the presence of ‘big tobacco’, the transnational tobacco companies (TTCs), in WPR. These companies are present in the region by way of having either manufacturing facilities, full/partial ownership in local entities or distribution rights. Philip Morris International (PMI), British American Tobacco (BAT), Imperial Brands and Japan Tobacco International (JTI) are present in the WPR. BAT is present in fifteen countries in the region, followed by PMI in twelve, Imperial brands in eleven and JTI in nine (Table 3). The presences of all four ‘big’ TTCs are seen in eight countries in the region, namely, Cambodia, China, Japan, Malaysia, Mongolia, Philippines, Singapore and Vietnam. Though tobacco cultivation and cigarettes manufacturing is absent in Mongolia and Singapore, the presence of all four TTCs in these countries is notable.

Table 3: Presence of ‘big’ transnational tobacco companies in WPR ^8283848572

*Presence of transnationals are not formally reported in Brunei Darussalam, Cook Islands, Kiribati, Marshall Islands, Micronesia (Fed. Sts), Nauru, Niue, Palau, Solomon Islands, Tonga, Tuvalu and Vanuatu.

Links to government

Tobacco industry recruits retired higher ranking government officials aiming to facilitate the lobbying process. There are examples in WPR of senior government officials taking up leadership positions in tobacco companies, highlighting the ‘revolving door´phenomenon. As of 2021, Yasutake Tango, who served as the Director General of Financial Bureau, Ministry of Finance, Deputy Vice Minister and Special Advisor to the Cabinet in Japan, is the Chairman of JTI. ⁸⁶Similar incidents were reported from Malaysia and Vietnam.⁸⁷

In Malaysia, the new Chairman of BAT Malaysia appointed in January 2017 was the former Secretary General of the Ministry of Home Affairs. He is active in service to sports as the Trustee and Chairman of the Football Association of Malaysia.⁸⁸

*Please see our page on TPD: Revolving Door Cases for more information on similar cases in the world.

There are state owned tobacco enterprises in the region such as the State Tobacco Monopoly Administration (STMA) in China who owns China National Tobacco Corporation (CNTC), and Vietnam National Tobacco Corporation (Vinataba) in Vietnam. The government of Japan holds 33% of the shares of Japan Tobacco Group and the government of Lao PDR maintains a joint venture with Imperial brands (Lao Tobacco Limited). ^{86 87}

 Participation of Industry on Policy/Decision Making Processes

The Tobacco Regulation Act 2003 in Philippines allowed a seat for an industry representative in the Inter-Agency Committee -Tobacco (IAC-T), established to implement the act. Representatives of the tobacco industry including Philippine Tobacco Institute (PTI), a retailers’ association and a farmers’ group were invited as resource persons for the Committee to discuss increasing tobacco taxes in 2018to the House of Representatives.⁸⁶National Kenaf and Tobacco Board (LKTN) and Border Security Agency (AKSEM) in Malaysia, which are responsible for licensing tobacco retailers and enforcement activities on illicit trade respectively, are represented by the JTI.⁸⁷ Active interference from the industry in developing national policies and tobacco control measures were reported from China, Japan, Lao PDR and Vietnam.⁸⁶⁸⁷

Lobbying government officials

A report published by the Health Justice Philippines illustrated the role of industry in influencing the policy formation for Electronic Nicotine Delivery System (ENDS). The Joint Committees of Health and Trade at the House of Representatives proposed nine bills related to ENDS. Six out of nine bills proposed were oriented to adopting ENDS; and the other three showed the involvement of PMI.⁸⁶ In Vietnam, the Ministry of Science and Technology promoted ENDS as a safer alternative following a meeting with PMI.⁸⁷

 Getting benefits/image promotion via CSR activities

Sponsorships from tobacco industry are allowed for poverty alleviation and disaster relief projects in Vietnam. Sponsorships by the Vietnam National Tobacco Corporation (Vinataba) in the fields of medical purposes, women empowerment, labour welfare, and scholarships are reported. Sponsorships in similar fields were reported from China and Republic of Korea, funded by the State Tobacco Monopoly Administration (STMA) and KT&G respectively. ⁸⁷

Many incidents of donations and CSR activities have been reported during COVID 19 pandemic. LT group, a company involved in tobacco and alcohol industry, and Japan Tobacco International (JTI) donated face masks to two hospitals in Philippines.^{89 90} Collapsible hospital beds were donated to Subic Bay Metropolitan Authority (SBMA) in Philippines by Philip Morris Fortune Tobacco Corp Inc, a joint venture between Philip Morris Philippines Manufacturing Inc. (PMPMI) and Fortune Tobacco Corporation (FTC).⁹¹ Japan Tobacco International (JTI) Malaysia donated money to supply food for low income families.⁹² Vietnam National Tobacco Corporation (VINATABA) in Viet Nam donated money, protective cloths and disinfection chambers to Bach Mai hospital.⁹³

 Good practices related FCTC Article 5.3

Civil Service Commission and Department of Health in Philippines issued a Joint Memorandum Circular in 2010, which provides a code of conduct consisting with the guidelines of the WHO FCTC Article 5.3, for all government officials. Some government departments enacted institute specific code of conducts or regulations complaint with the Circular.⁹⁴ Similarly, Lao PDR introduced a Code of Conduct for the employees of the Ministry of Health in 2018.⁸⁶

The Government of Australia prohibited the acceptance of donations from the tobacco industry. New South Wales Electoral Commission, Australian Labour Party and Liberal Party banned the donations from the tobacco industry as well.⁹⁴

In 2008, The Government of Australia started to maintain a Register of Lobbyists and a code of conduct for lobbying to make sure the transparency of dealings between the government representatives and the tobacco industry.⁹⁴ Since 2011, the Ministry of Health in New Zealand maintained an online register with all the details of the meetings conducted with the industry which is made accessible to the public.⁹⁴

 Roadmap to tobacco control

All countries in WPR are parties to the WHO Framework Convention on Tobacco Control (WHO FCTC) treaty.⁶⁰

Three countries (Fiji, Mongolia and Samoa) are Parties and another two countries (China and Republic of Korea) are Signatories to the  Protocol to Eliminate Illicit Trade in Tobacco Products. This protocol is an international treaty negotiated by Parties to the FCTC with the objective of eliminating all forms of illicit trade in tobacco products through cooperation of countries.⁹⁵

As of 2020, all countries in WPR have national level tobacco control laws in place.⁶⁰ WHO introduced MPOWER measures comprising the essential six elements (Monitor use and control measures, Protect from tobacco smoke, Offer help to quit, Warn against negative consequences, Enforce ban on advertisements and promotions and Raise tax) to implement FCTC effectively at country level. ⁹⁶ However, the 2019 WHO report on the tobacco epidemic shows that WPR has a considerable gap in achieving complete implementation of policies as per the FCTC directive thus maintaining compliance. Policy areas such as Monitoring tobacco use, Comprehensive cessation services and implementation of Graphical Health warning are well developed in most countries in the region. The compliance scores for each policy area suggest the existing gap between definition and enforcement of the control policies. For example, none of the countries have reached “fully compliant” (i.e. score of 10) in terms of comprehensive smoke-free legislation as per the FCTC directive. Some countries in the region have reached the score of 10 as fully compliant in terms of tobacco advertising, promotion and sponsorships. ⁹⁶

The following table shows a summary of implementation of MPOWER strategies in each country in the WPR (Table 4).A level above zero is considered as implementation.

Table 4: Summary of implementation of MPOWER policies in the WPR ⁹⁶

Lao People’s Democratic Republic is the only country in WPR that has completely banned the tobacco related CSR activities. Department of Education in Philippines issued a Department Order (No. 48 s. 2016) prohibiting tobacco industry sponsorships including CSR activities for both public and private schools.⁹⁴

All countries in WPR, except Japan, Kiribati, Marshall Island, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Tonga and Tuvalu, have implemented Graphic Health Warning Labels (GHWL) on cigarette packs.⁹⁷

Australia and New Zealand have completed the implementation of plain packaging while Singapore has it under consideration.⁹⁸

In November 2017, Viet Nam became the first country in Asia to adopt a policy to stop cooperating with the PMI-funded Foundation for a Smoke-Free World (FSFW). ⁸⁸

Some countries in the region have either banned or regulated electronic nicotine delivery systems (ENDS).Brunei Darussalam, Cambodia, Lao DPR and Singapore are the countries which have banned all types of e-cigarette sales in WPR. Australia and Japan have banned the sale of e-cigarettes with nicotine. ⁹⁹

McCabe Centre for Law and Cancer, a non government institute in Australia, hosts the WHO FCTC Secretariat’s Knowledge Hub on Legal Challenges.This is a one the seven and the first WHO FCTC Secretariat’s Knowledge Hubs established in the world. The aim of establishing Knowledge Hubs is to assist the Parties to implement the articles of FCTC. ¹⁰⁰

As part of WHO FCTC ratification, all countries in WPR have established a FCTC focal point for tobacco control and a National Coordination Mechanism (NCM) except for Fiji, Marshall Islands, Mongolia, Niue, Papua New Guinea, Tuvalu and Vanuatu. FCTC focal points in general are responsible for facilitating the establishment of NCM for FCTC implementation and serve as coordinating hubs for national and international stake holders.¹⁰¹⁶⁰

Industry interference

Tobacco industry (TI) has been ambitious about the Western Pacific region as the region hosts 1.9 billion of the world’s population, and the largest tobacco producer in the world.⁵¹⁵⁷ Therefore the TI has been using multiple tactics to penetrate and expand the markets in the region.

The following are a selection of themes and examples of tobacco industry interference in the region:

Delaying enforcement of tobacco control laws through litigation

Australian Parliament passed world’s first Plain Packaging legislation on 21 November 2011 to be enforced from 1 December 2012. All four big tobacco companies, British American Tobacco, Philip Morris, Imperial Tobacco, and Japan Tobacco International, brought legal challenges against this legislation. Philip Morris Asia initiated legal proceedings under the Arbitration Rules of the United Nations Commission on International Trade Law 2010, claiming the legislation on plain packaging did not comply with The Australia – Hong Kong Bilateral Investment Treaty. This legislation was also challenged at the World Trade Organization (WTO) by a few countries. Additional legal action was filed at the Australian High Court against the legislation by PMI, BAT, Imperial Tobacco and JTI arguing the new legislation is an acquisition of property by the government.

*For more information on plain packaging and campaigning by tobacco industry against plain packaging laws in Australia, see our pages Plain Packaging, Australia: Challenging Legislation and Plain Packaging in Australia.

Interfering the development and implementation of tobacco control measures

In Japan, when implementing GHWL on cigarette packs, the proposal was dismissed by a committee under the Ministry of Finance which was reported as industry friendly. There was no GHWL displayed in China till 2015 owing to the influence of State Tobacco Monopoly Administration.⁸⁶ PMI and BAT continue their Heated Tobacco Products (HTP) sale without prescribed GHWL amidst the unresolved classification on HTPs in Malaysia. ⁸⁷

With industry interference, China was unable to implement the national-level smoke-free policy. Japan remains with text-only GHWL on the package of tobacco products. Korea is unable to enforce the policies to prohibit the advertising including point of sale advertising and sponsorships. ⁸⁷

The government of Lao PDR made a joint agreement with Imperial Brands, which allows industry preferred tax rates depending on the production. This agreement caused to extinguish about USD 144 million to the government in tax revenues for the period of year 2002-2017.⁸⁶  Cambodia waived off the tax on tobacco leaves exported to Vietnam. ⁸⁶

Aggressive expansion of multinational companies in the region

TTCs are aggressively seeking to expand their markets in this region through acquisitions and mergers. TTCs have also capitalised on countries with weaker economies to enforce unreasonable conditions to favour them when making investments. When Imperial Tobacco acquired Lao Tobacco Limited in 2001, they negotiated a 25-year agreement with the government to charge only a 15% tax on cigarettes. It is estimated as of 2014, Laos have lost more than US$ 79 million in 13 years and will lose more than US$ 72 million in the next 12 years due to this agreement.¹⁰²

Expansion plans have brought rival companies together on some occasions. South Korea’s leading tobacco company KT&G established a strategic alliance with Philip Morris International in January, 2020 to expand the market worldwide for its heat-not-burn cigarette brand ‘lil’. This partnership have potentially secured a global distribution network for KT&G which had remained domestic predominantly.¹⁰³

 Pressuring governments to open their markets in the name of free trade

Tobacco companies have been able to capitalise on free trade agreements in the region to open the markets. During the 1980s, the US Cigarette Export Association, consisting of Philip Morris International, R.J. Reynolds and Brown and Williamson, petitioned against South Korean and Japan governments under the General Agreement on Trade and Tariffs (GATT) for not opening their markets to foreign cigarette manufacturers. As a result of the GATT ruling, Japan and Republic of Korea had to open its market to US cigarettes in 1990s.¹⁰⁴

 Interference on tobacco control measures through front groups and business councils

The International Tobacco Growers Association (ITGA) is a well-known global front group of the tobacco industry. Members in the region include the China Tobacco Society in China, Korean Tobacco Growers Organization in Korea, Phil Tobacco Growers Association in Philippines and Vietnam National Tobacco Corporation (VINATABA) in Viet Nam ^{105 106107} ITGA is alleged for smearing WHO and FCTC reports on tobacco control, providing false information about farmers and conflicting statistics, and creating fears among farmers, for example in Philippines and Vietnam. ¹⁰⁸

Most countries in WPR have American Chamber of Commerce (AmCham) country chapters, namely, Australia, Cambodia, China (China, Hong Kong, Shanghai, South China and Macau), Fiji, Japan (Japan, Okinawa), Malaysia, Mongolia, New Zealand, Philippines, Singapore, South Korea and Vietnam.¹⁰⁹Senior managers from tobacco industries have served in AmCham leadership positions and both AmCham and US Chamber of Commerce have become platforms for tobacco industry representatives to associate with senior government officials. In 2009, Chris Nelson served as the chairman of PMI Philippines and later he served as the Director of AmCham Board and Trustee of the
AmCham foundation in Philippines.¹¹⁰ Similarly,  the Board of Governors of the AmCham was represented by the higher positions of tobacco companies in China, Malaysia and Singapore.¹¹⁰

AmCham contributes to promotion of the image of tobacco industry via CSR activities, Graduate Trainee Programs and different events.¹¹⁰⁸⁷

US-ASEAN Business Council, which includes a board member from PMI, held a dinner reception collaborating with the US Chamber of Commerce during the 74^thUN General Assembly in New York in 2019. ⁸⁷

* For more detail on the activities and movements of front groups in the region and across the globe, see our pages on Front Groups, Think Tanks and the US Chamber of Commerce.

Funding research institutes and think tanks on advocacy for tobacco industry

The tobacco industry’s usage of research and policy forums to promote its own agenda is a well-known strategy used to influence policymaking. From 2012 to 2015, Philip Morris International (PMI) funded US and UK-based think tanks International Tax and Investment Center (ITIC) and Oxford Economics Ltd, to conduct studies on the illicit trade in the ASEAN region.¹¹¹

There are instances where industry-funded think tanks directly interfered in tobacco control. In Australia, industry funded think tanks, consultancies and independent experts campaigned against implementation of plain packaging and undermined Australian government efforts, even after the implementation. Read more on this at Australia: Funding Think Tanks and Hiring Independent Experts. In Malaysia, when the Ministry of Health announced plans for plain packaging in 2016, Institute for Democracy and Economic Affairs (IDEAS), a Malaysian think tank, opposed it. IDEAS received funds from JTI and PMI in 2015 and 2016. Since 2015,IDEAS has been actively opposing tobacco control measures, especially plain packaging and tax increase.¹¹²

The Foundation for a Smoke-Free World (FSFW) is a Phillip Morris International-funded organisation. In 2019, when Hong Kong government was considering a ban on next generation tobacco products, both FSFW and PMI submitted their arguments against it.

In WPR, FSFW have funded institutes in China and New Zealand,  to conduct tobacco smoking related research since 2018.¹¹³

There are also examples of TTCs funding organisations to advocate on new generation tobacco products in the region. Factasia.org, a non-governmental organization based in Hong Kong, funded by Philip Morris International and Tobacco Vapor Electronic Cigarette Association (TVECA),is an example.¹¹⁴

* Read more about the Foundation and the projects it funds on our pages Foundation for a Smoke-Free World and Foundation for a Smoke-Free World Grantees.

Sponsorships and Involvement in Sports

The government of Japan allows JTI to sponsor volleyball, chess, and golf teams and tournaments and getting media coverage as Japan has not banned the tobacco sponsorships.⁸⁷

*For more information on tobacco industry involvement in sponsoring sports events, see our Motorsport Sponsorship and Gudang Garam and sports endorsement.

Corporate Social Responsibility (CSR) activities

Corporate Social Responsibility(CSR) is a strategy used by the tobacco industry to build their reputation in the eye of the public, to gain sympathies from the governments and as a platform to interact with public officials.

Industry involves government officials during these CSR activities in order to get their endorsements and help for tobacco companies to gain acceptance in the community. Government officials from the Ministry of Industry and Trade have joined to distribute gifts to flood victims sponsored by Vietnam National Tobacco Corporation (Vintaba); and local authorities joined to distribute gifts to poor households at the inauguration ceremony of a bridge constructed sponsored by BAT. In Malaysia, the Minister of Domestic Trade, Cooperatives and Consumerism, whose ministry has a new responsibility to regulate electronic cigarettes, officiated at a Philip Morris-sponsored “Back to School” programme organised by the Salam Foundation, a regular recipient of PMI’s CSR grants.⁸⁸

CSR activities in Japan is oriented towards public education promoting “good manners” in smoking, such as smoking in designated ‘smoking spaces’, aiming to maintain a facade of reconciliation with non-smokers. Japan Tobacco International has established 943 locations as ‘smoking spaces’ with the partnership of 212 Municipalities in Japan. Similarly, in China, guidance was issued by Chinese National Bureau to develop “Beautiful China” with ‘civilised smoking environment’, which operates at national and sub national levels.⁸⁶

In 2017, Shanghai Tobacco Company donated RMB 10 million (USD 1.5 million) to the Shanghai Charity Foundation for education. Charity Award for outstanding corporate social responsibility in China was awarded to Shanghai Tobacco Company by China Charity Foundation.⁸⁶

Philip Morris Fortune Tobacco Corporation (PMFTC) conducts CSR activities through its CSR arm called “Embrace” in Philippines. ⁸⁷

*Read more about the CSR strategies by tobacco industries on our page CSR Strategy.

Illicit trade of Cigarettes (Tobacco Smuggling)

Studies based on industry documents have revealed that TTCs have allowed Tobacco Smuggling as a marketing strategy in several Asian countries with examples in China and Vietnam.¹¹⁵ One such study reveals, when China opened its tobacco market for international brands in 1979, BAT initially established its brands such as State Express 555 through smuggling. And BAT has tried to establish a legal presence only when risks for contraband sales were amplified.¹¹⁵ Another study reveals that one of the strategies adopted by BAT was to set up the contraband trade to gain access to tobacco market in Vietnam when the Vietnamese government banned importing of cigarettes in 1990. ¹¹⁵

* Refer to our pages Tobacco Smuggling and BAT Involvement in Tobacco Smuggling for more information.

 Lobbying for less regulation of next generation products

With increasing controlling laws on traditional smoking products, tobacco industry has focused on developing Next Generation Products (NGPs). Some common NGPs are electronic nicotine delivery systems (ENDS) which also referred to as e-cigarettes and Heated Tobacco Products.

Around the globe and in Asia the industry is lobbying governments for leniency in regulation, which would allow the companies to promote these products or be treated less restrictively than combustible tobacco products. One study shows that in Philippines in 2018, from the nine bills proposing ENDS regulation in Congress, six were oriented to adopting industry positions in relation to ENDS. Three bills, two in the House of Representatives and one in the Senate, showed the involvement of PMI. The Philippines E-Cigarette Industry Association (PECIA) and Vapers Philippines were vocal during the meetings, arguing that regulation should be assigned to the Department of Trade and Industry, promoting the harm reduction argument, and claiming that e-cigarettes are an effective smoking cessation tool.¹¹⁶

* Read more about new tobacco industry products and strategies here on Next Generation Products and Harm Reduction

Tobacco tactics resources

*Japan Tobacco International

* US-ASEAN Business Council

*China National Tobacco Corporation

*South East Asian region

* Tobacco Smuggling

* CSR Strategy

* Foundation for a Smoke-Free World Grantees

References

The post Western Pacific Region appeared first on TobaccoTactics.

Background

The CNTC was founded in 1982 and brought together disparate regional producers under one umbrella organisation to enable central-planned cigarette manufacturing. It has the state-owned monopoly on tobacco growing, production and sales with an estimated 97% market share.¹¹⁷

The CNTC generates between 9% and 12% of total state revenue making it a “government-business leviathan”. However which relatively little is known about the company.¹¹⁸¹¹⁹

That volume of income is down due to it having the single largest domestic market in the world, an estimated 270 million smokers. It produces 2.5 trillion sticks – comfortably making it the largest single producer in the world.¹²⁰

The CNTC is not one organisation but manages hundreds of tobacco companies, manufacturers, suppliers, and growers of varying size. ¹²¹ This vertical spread of entities are engaged in everything from tobacco leaf production to selling the brands. Despite this their numbers are down significantly from when the CNTC was originally formed as it has looked to consolidate operations to benefit from economies of scale.¹²²

• See below for a list of Tobacco Companies and of global subsidiaries of the CNTC.

State Tobacco Monopoly Administration

While the CNTC makes the products, the State Tobacco Monopoly Administration (STMA) is responsible for managing the state monopoly on tobacco. It answers to the Ministry of Industry and Information. Although they have different names, they are essentially the same organisation with the STMA setting the strategic decisions and CNTC responsible for carrying them out. In addition, as the state entity, the STMA has responsibility for tobacco control measures. China ratified the Framework Convention on Tobacco Control in 2005 and in 2015 banned cigarette advertising, although it is still permitted online. There is a fundamental contradiction here:  the government’s vehicle for manufacturing and selling cigarettes is also, under another name, responsible for tobacco control policies.¹²¹¹²³ This contradiction with FCTC Article 5.3 has been seen at the international level. As the STOP report on industry interference in China points out:

“In 2014, representatives from STMA and the China National Tobacco Corporation (CNTC) joined the Sixth Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (FCTC) in Moscow, Russia. At COP8 tobacco representatives participated in the naming of the group members in China’s delegation.”¹²⁴

CNTC Tobacco Companies

The CNTC controls a number of Chinese tobacco companies which produce their own brands popular with particular markets. Among the biggest are:

Based on data from Campaign for Tobacco-Free Kids.¹²² These companies also invest in other internal markets such as real estate, transportation, hotels and finance.

CNTC Global Subsidiaries

The CNTC also has a number of other companies based both within and outside of China. Amongst these:^120125126

Relationships with Transnational Tobacco Companies

Although CNTC has the domestic monopoly, outside tobacco companies are allowed to operate, in exchange for the technology they can provide and licensing fees for selling popular brands. That ‘open door’ policy began in the 1970s and most recently has seen CNTC look to operate beyond its own national borders.

Philip Morris International

Philip Morris International (PMI) has the biggest presence in the limited market available to overseas tobacco companies in China. It signed an agreement with the CNTC in 1994 to allow the manufacture and sale of the Marlboro brand.¹²¹ That same year PMI began sponsoring the China national football league. In 2008 PMI agreed a joint venture with China National Tobacco Important Export Group Corp. to put Chinese national brands into markets in Europe and Latin America.¹²²¹²⁷

• For more information on PMI’s China sports sponsorship see the page on Football Sponsorship

British America Tobacco

British American Tobacco (BAT) has a long association with the country. During the first half of the twentieth century, it dominated the industry but was forced to leave in the 1950s and only returned in the 1980s. That return was marked by what one key study described as “strategically critical” involvement in smuggling cigarettes into China.¹²⁸ BAT was closely involved in efforts to get China to become a member of the World Trade Organisation which would have assisted BAT as it would have liberalised the Chinese tobacco market.¹²⁹. See also the Tobacco Tactics page on Chatham House.

BAT has engaged in some joint-ventures and assisted with tobacco growing investment.¹²¹ These have not always proved successful.¹²² However the joint venture with CNTC to sell the popular BAT brand State Express 555 in China and the Shuangxi brand overseas has been in operation since 2013. The vehicle for that is CTBAT International Company based in Hong Kong.¹³⁰

Japan Tobacco International

Japan Tobacco International (JTI) and CNTC work together to make and sell a few popular JTI brands.¹²¹ Some of those relationships are based on those JTI inherited through acquisitions of RJ Reynolds (1999) and Gallaher (2007).¹²² JTI established a China Division in 2003 to enable its work with the CNTC in the country.¹³¹

Imperial Brands

Imperial Brands is the company with the newest and weakest of links with the CNTC. It signed a deal in 2003 for CNTC subsidiary Hongta to produce its West brand and in return Imperial distributes the Hongtashan brand abroad.¹²² In 2017, CNTC’s Yunnan Tobacco and Imperial set up a joint company, Global Horizon Ventures Limited, to sell the West cigarette and Davidoff cigar brands in China and Jade and Horizon brands abroad.¹³² Imperials’ e-cigarette subsidiary Fontem Ventures has a separate company based in Bejing.

Product Portfolio

See product terminology for definitions used on TobaccoTactics.

The vast majority of CNTC’s revenue comes from the sale of cigarettes and other conventional tobacco products.

Conventional tobacco products

Through their global network of subsidiaries, CNTC is behind a multitude of cigarette brands. Some of their subsidiaries and brands are:¹²²¹³³

See also the Tobacco Supply Chain database for country specific information.

Newer nicotine and tobacco products

As the harms from smoking conventional products have become better understood, and tobacco control measures have been put in place, the cigarette market – from which tobacco companies make most of their profits – has started to shrink.  To secure the industry’s longer-term future, TTCs, as well as the CNTC, have invested in, developed and marketed newer nicotine and tobacco products.¹³⁴

As part of the STMA’s strategic planning, it has engaged in the research and development of these products. Its Tobacco Research Institute has been working in this area since the 1980s – initially on flavours and lower-tar cigarettes but more recently on e-cigarettes (also known as electronic nicotine delivery systems, or ENDS) and heated tobacco products (HTPs).¹²². CNTC has focused on HTPs and produces several brands including Kuanzhai Kungfu, MC and MOK. These are sold in both domestic and foreign markets, specifically South Korea and Japan.¹³⁵¹³⁶ The booming e-cigarette industry operates separately from the company with thousands of manufacturers and an estimated two million employees serving a global market and with limited regulations.¹³⁷¹³⁸

The CNTC has also long-maintained extensive relations with domestic academic research institutions. One analysis of journal articles published concluded that: “The Chinese tobacco industry relies heavily upon academic researchers to advance its research agenda and such reliance has grown over time. Most research deals with farming, manufacturing and management issues, but research on ‘reduced harm’ and health effects has increased.”¹³⁹

Product Regulation

For detailed, up to date information at country level, see the searchable database on the Tobacco Control Laws website, published by the Campaign for Tobacco Free Kids (CTFK).

For countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) progress towards implementation of relevant articles, including newer products, is detailed in the FCTC implementation database.¹⁴⁰

Market Strategy: Moving Out of the Domestic Market

While China’s domestic market remains large, in recent years tobacco control policies have caused a decline in the number of home customers. The CNTC has looked to operate at an international level as a way to maintain revenue. As a state-owned enterprise, a more aggressive overseas profile also supports the Chinese government’s global Belt and Road Initiative (BRI). This ambitious programme sees Chinese-funded infrastructure projects in more than 125 countries. The development of a CNTC presence in BRI countries was set out as strategic objective in 2017.¹⁴¹

“China Tobacco’s overall goal [is] to eventually become a transnational tobacco company with its own leading brands, in order to compete with the likes of Philip Morris International and British American Tobacco,” says Jennifer Fang, from the Global Tobacco Control Research Programme at Simon Fraser University, who studies the company.¹¹⁷

As such, exports rose from US$248m in 2009, which was around 1% of total production, to US$722m in 2019, with the majority going to the Asian market.¹¹⁷

As part of this move China Tobacco International Hong Kong launched onto the stock market in July 2019. An analysis in Tobacco Control wrote: “As the goal of the IPO was to finance market expansion in CNTC target markets, and establish strategic collaborations with other cigarette companies, its significance for tobacco control and public health should not be underestimated.”¹⁴²

Tactics to Undermine Tobacco Control

Tobacco industry interference is widely understood to be the greatest barrier to progress in reducing the deadly health impact of tobacco.¹⁴³ Article 5.3 of the World Health Organization Framework Convention on Tobacco Control (FCTC), obliges countries to protect their health policies from the “vested interests of the tobacco industry”.

TCRG has identified a range of tactics used by tobacco companies to interfere with and undermine tobacco control, in order to further their commercial goals.

Tactics used by the CNTC include:

Controversial marketing strategies

Despite the monopoly status, the CNTC uses the same marketing techniques as its transnational competitors. It produces “light” and “low tar” versions, brands aimed at women and young people, and puts iconic images on its packs.^122144145

Online marketing of tobacco presents a particular challenge to tobacco control in China.¹⁴⁶¹⁴⁷

Corporate Social Responsibility (CSR) initiatives

As with marketing, so the CNTC engages in corporate social responsibility (CSR) activities familiar to transnational tobacco firms. This is despite the fact that a parallel part of the CNTC, the STMA, is responsible for tobacco control policies.

CSR activities include grants to tackle poverty, environmental initiatives, supporting scholarships and donations to disaster relief.¹²² Indeed on the CNTC web site there is a specific section called “Poverty Alleviation”.¹⁴⁸

Jennifer Fang wrote: “As a state-owned enterprise, CNTC is expected to closely follow the government’s policy leads, and to support particular priorities, such as reducing poverty.”¹⁴⁹ That includes the tobacco company setting up more than 100 schools named after cigarette companies or brands. Fang also identified a school built in Zimbabwe in 2010 by a CNTC subsidiary while a Cambodian subsidiary donated school supplies in that country.

Despite being the largest single producer of cigarettes globally there is little information on the environmental impact of the CNTC.

Alleged involvement in illicit trade

Xu Ying, one of the State Tobacco Monopoly Administration deputy directors, gave an interview in 2020 in which he revealed that seizures of counterfeit and smuggled cigarettes had risen year on year and further action was required. He said:

“Although the nationwide anti-counterfeiting and smuggling work has achieved significant results, the current situation is still grim. Driven by huge profits, the manufacture and sale of counterfeit cigarettes and smuggling activities will inevitably exist for a long time. The current situation of anti-counterfeiting and smuggling of tobacco across the country has emerged. The main manifestation is the transfer of cigarette counterfeiting activities abroad, and the counterfeit domestic brand cigarettes produced abroad are smuggled into the country and then distributed nationwide. The momentum is rampant and intensified.”¹⁵⁰

Illicit CNTC products seized in European countries have been found to have originated through Ukraine. ^{151 152}

CTIEC cigarettes were sold to an Iraqi company, Devmak, before being allegedly smuggled into Italy. The smugglers were found to have links to organized crime and are also suspected of being active in Moldova and Montenegro.^{153 152}

Smuggling networks have also been uncovered in Latin America, with several China Tobacco-connected, Panama-based companies coordinating shipments of illicit products to several countries in the region. ¹⁵⁴¹⁵²

Key employees and board members

Zhang Jianmin: General Manager of the China National Tobacco Corporation, Director of the State Tobacco Monopoly Administration, member of the party leadership group of the Ministry of Industry and Information Technology. Zhang has a background in engineering before going on to gain a doctorate in economics. He served in a number of regional party posts before joining the ministry responsible for the STMA in 2018.¹⁵⁵

Xu Ying: State Tobacco Monopoly Administration, deputy director.¹⁵⁵ Has worked in the tobacco industry since 1992 and appears to have responsibility for countering smuggling and counterfeiting.

Duan Tieli: State Tobacco Monopoly Administration, deputy director.¹⁵⁵He has been working in the domestic tobacco industry since 1991.

Zhang Tianfeng: State Tobacco Monopoly Administration, deputy director.¹⁵⁵ He has been working in the tobacco industry since 1998 and has a masters in business administration

Han Zhanwu: State Tobacco Monopoly Administration, deputy director.¹⁵⁵ Has held a number of personnel roles in different state organisations since 2000 before joining the Ministry of Industry and Information Technology in 2016 and the STMA in 2020.

Relevant Links

China National Tobacco Corporation http://www.tobacco.gov.cn/

Organised Crime and Corruption Reporting Project: China Tobacco Goes Global

STOP report on China

STOP brief on the CNTC

TobaccoTactics Resources

Western Pacific Region

References

The post China National Tobacco Corporation appeared first on TobaccoTactics.

MarketKonnect is a subsidiary of APCO Worldwide and is based at the PR firm’s global headquarters in Washington DC.¹⁵⁶

MarketKonnect LLC was registered in Delaware, US, in May 2019.¹⁵⁷ Another branch of the firm was established in the District of Columbia, US, in February 2020.¹⁵⁸

Margery Kraus, Executive Chairman of APCO, is also the executing officer and governor of MarketKonnect LLC.¹⁵⁹.

Low profile

The company does not have a website and there is very little information about it in the public domain.¹⁶⁰ It is not mentioned on the APCO website.¹⁶¹

Relationship with the Tobacco Industry

MarketKonnect’s parent company, APCO, has worked closely with the tobacco industry since it formed in 1984.¹⁶² You can read more on this history of close connection on our APCO page.

There are also long-standing links between Derek Yach, President of the Foundation for a Smoke-Free World (FSFW), and APCO. In 2014 he was appointed a member of the PR firm’s Health Advisory Board.¹⁶³ Yach remained on the Board until 2018.¹⁶⁴

Connection to China

Minutes from a special meeting of the FSFW’s board of directors in February 2019 state that APCO is the “lead group in managing the registration process in China” and has been asked to “charter and register the Foundation in China and establish the necessary governance, structural and staffing framework for the Foundation”.¹⁶⁵

The minutes state: “Dr. Yach described how establishing the Foundation and its programs in China will be challenging and will require operating tightly and with great sensitivity”.¹⁶⁵

In 2019, APCO subsidiary MarketKonnect was paid US$1,137,992 by the Foundation for “consulting services”.¹⁶⁶ It is unclear whether this sum relates to the US$1.3 million the FSFW agreed to pay APCO in 2019 to “establish the Foundation in China.”¹⁶⁷

Despite its subsidiary, MarketKonnect, receiving a contract with more than a million dollars from the FSFW, there is no mention of APCO directly in the Foundation’s 2019 tax return. Nor is there any description of APCO’s planned work in China on the Foundation’s website other than in its board minutes.¹⁶⁶

Tobacco Tactics Resources

Foundation for a Smoke-Free World

APCO Associates

References

The post MarketKonnect appeared first on TobaccoTactics.

Article 17 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) encourages parties to promote sustainable alternatives to tobacco farming.¹⁶⁸ There is a consensus that diversification programmes, designed for the local context, can improve farmers’ livelihoods.

Despite a global trend of decreasing tobacco consumption from 2000 to 2020,¹⁶⁹ and an overall worldwide decline in tobacco leaf production during the same time period,¹⁷⁰ tobacco remains a popular cash-crop choice for many farmers, especially in low- and middle- income countries (LMICs) where the vast majority of tobacco farming takes place.¹⁷¹¹⁷²  The global fall in tobacco leaf production has been accompanied by a production shift from Europe and other high income countries, towards lower income countries like Malawi, Kenya, Uganda and Zambia^170173174

The tobacco industry portrays tobacco farming as economically advantageous for governments and especially for farmers. Other claims include that it helps improve resilience, empowers low-income populations and strengthens communities, while the industry also tends to minimise the risks of tobacco growing for health and the environment.^175176177

In reality, tobacco farming often leads to economic hardships, labour exploitation, environmental degradation, and health problems for farmers. Farmers often have less influence within the political process than non-tobacco growers in the same area.¹⁷⁸

Image 1: Tobacco leaf drying (Source: Shutterstock)

The myth of economic prosperity

According to the tobacco industry, tobacco cultivation promises high rates of return for investing in tobacco crops and long-term benefits to smallholder farmers.^175176177

However, tobacco growing is often less profitable for farmers than other crops, and tobacco-growing families are poorer than comparable non-tobacco-growing households.¹⁷³¹⁷⁹ In Lebanon, research has shown that small scale production is so unprofitable that it would not be possible without government subsidy.¹⁸⁰

Evidence shows that the labour costs of growing tobacco are enormous, as much as double the labour needed to produce other similar crops. For example, tobacco is amongst the most labour-intensive crops in Kenya, requiring over 1,000 hours of unpaid labour to produce one acre of tobacco.¹⁸¹ The number of hours needed for tobacco growing stops families spending time attaining educational qualifications or developing skills that might lead to more lucrative livelihoods.

Tobacco growing also creates specific vulnerabilities for farmers:  they depend on tobacco companies for inputs and technologies, and are exposed to fluctuations in the price of tobacco leaf.¹⁸²

In its reporting, the tobacco industry minimises the low rates of return on investment for tobacco growing and downplays the financial risks for the farmers. For example, BAT reported that in Kenya, tobacco farmers can either grow food for their families’ needs or have sufficient profits to purchase food.¹⁷⁵ A 2020 study of tobacco farming in Kenya instead shows that most tobacco farmers are stuck in unprofitable ‘contract farming’ systems and 10-15% are food insecure.¹⁸¹

Contract farming

Most tobacco farmers work under a contract system with leaf buying-companies or directly with transnational tobacco companies like BAT.¹⁸¹¹⁸³

Under these systems, farmers receive inputs like plants, fertiliser and machinery at the start of the season from leaf-buying companies, without having to pay for these upfront. In return, they commit to selling their tobacco to the leaf merchant. However, leaf prices are dictated by the buying companies, who often set these very low or reduce them during the contract period. Leaf buyers often use tobacco grading, or the classification of leaf quality, to reduce the offer price, often in disagreement with farmers.^181184185 Leaf buying companies can also deduct unfairly high costs from the payment they offer farmers, to pay back the inputs they initially provided.¹⁸¹

Contract farming rarely produces the high returns promised by tobacco and leaf-buying companies. Instead, contract farmers remain stuck in ‘bonded labour’: debt cycles where they never earn enough to repay their debts.^181183185186 Contracted farmers often have to rely on the unpaid labour of family members and children in fields in order to meet contract requirements.¹⁸³

Farmers often understand that this contract system for tobacco farming is risky but agree to this work because they lack the credit to pursue other economic opportunities. Contract tobacco growing guarantees them the income, however low, that they need in order to pay for basic necessities like healthcare and education.¹⁷³

The COVID-19 pandemic and profitability

The COVID-19 pandemic worsened the struggle of farmers to find fair prices for their tobacco leaf. In Malawi, farmers reported receiving less than half of the expected rate for their tobacco leaf at auction.¹⁸⁷ Fears that crowded auction floors and direct contact between growers and buyers would promote transmission of the virus prompted Zimbabwean authorities to delay the opening of the tobacco market selling season.¹⁸⁸¹⁸⁹ Once the markets did open, new regulations stated that individual farmers would not be allowed onto auction floors where they could observe buyers; tobacco association representatives would instead sell leaf on behalf of farmers.¹⁸⁹

• For more information on the tobacco industry and COVID-19, see our page on COVID-19

The climate crisis and profitability

The climate crisis in tobacco-growing regions makes profits from tobacco growing more unreliable.

In Zimbabwe, shorter and more erratic rainy seasons decrease the quality and quantity of tobacco crops, especially for smallholder farmers who can’t afford irrigation systems and rely on rainfall instead.¹⁹⁰

In the tobacco-growing region of Temanggung, Indonesia, the phenomenon of late tobacco harvesting seasons has become increasingly common. In this region, farmers have been losing income, as companies purchase tobacco leaf from other regions where harvesting happens earlier in the year.¹⁹¹

Farmers in tobacco growing regions that are heavily impacted by the climate crisis have been developing adaptation and mitigation strategies to maintain the profitability of their tobacco crops, such as irrigation systems and later harvesting. However, research indicates that “even with these adaptations tobacco and maize are riskier crops to grow than traditional grains.”¹⁹⁰¹⁹² soil degradation,¹⁹³¹⁹⁴ biodiversity loss,¹⁹⁵ the use of pesticides,¹⁹⁶¹⁹⁷ and adverse effects on farmers’ health.¹⁹⁸ Despite this, tobacco companies use ESG rankings and accreditations to clean up their image.¹⁹⁹

• For more information, see the page Tobacco and the Environment

Image 2: A farmer carrying a bundle of tobacco leaf (Source: Shutterstock)

Vulnerable communities

Together with the narrative of economic prosperity comes the myth that impoverished and vulnerable communities are empowered. Philip Morris International (PMI) published a report in April 2020, focusing on the empowerment of women for change in its supply chain. In this report, PMI argued that it works to “empower women to play an active role in improving the household economic condition but also in enhancing the overall wellbeing of their children and maintaining a safe work environment” on tobacco farms.²⁰⁰ However, a study in Zimbabwe concluded that women in households growing cash crops, in particular tobacco, were more likely to be disempowered.²⁰¹ A study conducted in China, Tanzania and Kenya concluded that few women in tobacco growing households in Tanzania and Kenya had any financial decision-making power. Women also face particular harmful effects to their health while working on tobacco farms, including the risk of miscarriage while pregnant.²⁰²

All four transnational tobacco corporations present a strong and compelling narrative around tobacco farming: that it will improve livelihoods, strengthen communities, provide good working conditions and deliver financially stable futures for farmers.^203204205206 For example, Japan Tobacco International (JTI) states on its website that “Growers know they will receive meaningful support that not only leads to improved yields and profits, but that also help improve the social conditions and quality of life in their communities.”²⁰⁷

However, a WHO report on tobacco and the environment published in 2017 found that the long-term consequences include “increased food insecurity, frequent sustained farmers’ debt, illness and poverty among farmworkers, and widespread environmental damage”.¹⁸⁴ Tobacco farmers end up having to dedicate intensive labour hours to produce tobacco leaf, in inadequate working conditions, with low wages and unfair conditions that include child labour (see below).

• For more information on the tobacco industry narratives around farming see International Tobacco Growers Association

Health risks to farmers

Tobacco leaf production has many health risks, which are frequently underreported by the tobacco industry.

According to the World Health Organization, “each day, a tobacco worker who plants, cultivates and harvests tobacco may absorb as much nicotine as found in 50 cigarettes”.¹⁷² Nicotine poisoning, also known as green tobacco sickness, occurs as a result of exposure to wet tobacco leaves during tobacco cultivation. Children are more likely to develop green tobacco sickness, not only because they have a relatively smaller body size, but also because they have not yet built up the nicotine tolerance which is needed protect them from these side effects.¹⁷⁵ Avoiding nicotine poisoning when working with tobacco plants is difficult, even when wearing protective equipment. BAT reported several cases of green tobacco sickness in its Brazilian farming operations, despite workers having worn protective equipment.¹⁷⁵

Another risk resulting from tobacco farming is the exposure to agrochemicals, including pesticides. Researchers found that in Kenya, 26% of tobacco workers showed symptoms of pesticide poisoning;²⁰⁸ in Malaysia, this number was higher than a third.²⁰⁹ In Bangladesh, where weed killer is frequently used in tobacco fields, significant levels of chemicals were also detected in local water sources, killing fish and soil organisms needed to maintain soil health.²¹⁰

The risk of exposure to agrochemicals is generally lower for tobacco farmers in high-income countries than in LMICs, where the regulation of chemicals tends to be weaker.¹⁹³ Dichlorodiphenyltrichloroethane (DDT) plus eleven other persistent organic pollutants used in agrochemicals are banned in high income countries, but not in some LMICs.¹⁹³²¹¹ Pesticides are often sold to tobacco farmers in LMICs without proper packaging or instructions.¹⁹³²¹¹ The health effects that derive from chronic exposure range from birth defects and tumours to blood disorders, neurological diseases and depression.¹⁹³²¹¹ Even tobacco workers who do not directly mix or spray chemicals, like harvesters, can be exposed to significant levels of toxins and are susceptible to pesticide poisoning.¹⁸⁴

Child Labour

Child labour is a prevalent and long standing issue in the tobacco farming sector.²¹²

Children involved in the growing stages of tobacco farming take part in labour-intensive activities,²¹³ which poses risks to their health,²¹⁴²¹⁵ and limits their access to education.²¹⁶²¹⁷

Children working in tobacco farms are also more vulnerable to the health risks than adults, including the impacts of absorbing nicotine.²¹⁸

Many of the children working in tobacco fields in Kenya report handling fertilisers and chemicals, endangering their health.¹⁸¹²¹⁸

Tobacco farming and the FCTC

The World Health Organization Framework Convention on Tobacco Control (WHO FCTC) is an international treaty that aims to reduce the demand and supply of tobacco.

It recognises that as countries and governments adopt measures to reduce the demand of tobacco products, they must also address the consequences of this demand reduction on tobacco farmers who rely on these crops for their livelihoods.²¹⁹

Specifically, article 17 recognises the need to:

“promote economically viable alternatives to tobacco production as a way to prevent possible adverse social and economic impacts on populations whose livelihoods depend on tobacco production.”¹⁶⁸

The tobacco industry argues that tobacco control policies threaten the economic benefits  that it claims tobacco growing brings to local farmers.¹⁶⁸However, other crops can provide much more sustainable alternatives. In addition, demand reduction happens slowly, allowing farmers to diversify their crops gradually, reducing the economic impact.¹⁶⁸

Parties to the WHO FCTC also have an obligation to:

“have due regard to the protection of the environment and the health of persons in relation to the environment in respect of tobacco cultivation and manufacture within their respective territories.” ²¹⁹

• For more information see the page on Tobacco and the Environment

Corporate Social Responsibility and Environmental, Social and Governance

In response to increasing scrutiny over environmental degradation and the use of child labour in the tobacco supply chain, transnational tobacco companies have invested in Corporate Social Responsibility (CSR) initiatives which they describe to their shareholders in their Environmental, Social and Governance (ESG) reports.¹⁹⁹

• For more information, see the pages on CSR: Child Labour, and the Eliminating Child Labour in Tobacco-Growing (ECLT) foundation

The tobacco industry has also been involved in CSR programmes supporting farming diversification in tobacco growing regions, despite the FCTC specifically recommending that “policies promoting economically sustainable alternative livelihoods should be protected from commercial and other vested interests of the tobacco industry”.¹⁶⁸²²⁰

• See Greenwashing in Malawi and the Centre for Agricultural Transformation (CAT)

PMI’s ‘Agricultural Labour Practices’ (ALP) Programme

On 10 December 2020, PMI published an article seeking to celebrate the International Day of Human Rights by promoting its achievements around its Agricultural Labour Practices (ALP) program. This programme was created by PMI in 2011, seemingly aiming to end child labour and protect workers’ rights and livelihoods.²²¹

According PMI’s ALP 2020 report, the key principles of the programme include “no child labor, no forced labor or human trafficking, fair treatment, safe working environment, fair income and work hours, freedom of association, and terms of employment”.²²² However, the timeline below (Image 3) from the same report, shows how, despite the programme having run for 9 years, PMI continues to use child labour in its supply chain. The company has given itself a further 5 years to end the practice.²²²

Image 3: Timeline of the ‘Agricultural Labor Practices Program’ (Source: Philip Morris International, ALP program 2020 report)²²²

• For more information on PMI’s ALP programme, and how tobacco companies fail to properly measure or manage the effectiveness of this type of initiative, see CSR: Child Labour

TobaccoTactics Resources

• Greenwashing
• Tobacco and the Environment
• CSR: Child Labour
• Tobacco Supply Chain Database: addressing the supply side of the tobacco epidemic

Relevant Links

• TCRG blog Supplying the deadly tobacco industry
• WHO World No Tobacco Day 2023: Grow food, not tobacco includes a myth buster on Tobacco growing
• WHO report: “Tobacco and the environment”
• Tobacco Atlas

TCRG Research

For a comprehensive list of all TCRG publications, including TCRG research that evaluates the impact of public health policy, go to the Bath TCRG’s list of publications.

References

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