The battle over the introduction of plain packaging has revealed the unscrupulous tactics used by the tobacco industry to influence and counter. Evidence shows a multi-faceted campaign that includes using industry-funded research to falsely claim that plain packaging will lead to a rise in cigarette smuggling and illicit trade. This is despite the fact that these companies have been complicit in this very trade.
There is extensive historical evidence of transnational tobacco companies’ complicity in facilitating the smuggling of their own cigarettes. Complicity is suspected when companies export billions of cigarettes to countries that do not have a demand for such large volumes. The cigarettes find their way onto the black market and are smuggled into countries without paying appropriate duty.
As the tobacco industry wages what is arguably its most virulent battle in recent years against the regulation of its business – including threatening legal action against moves to standardise packaging. Here we provide a snapshot of the big four transnational companies operating in the UK and their relationship with the illicit trade – the list of evidence is not exhaustive.
British American Tobacco
In January 2000, the Guardian newspaper reported that British American Tobacco’s (BAT) own documents revealed how the company had “condoned tax evasion and exploited the smuggling of billions of cigarettes in a global effort to boost sales and lure generations of new smokers.”
Later the same year, BAT also faced serious racketeering charges in Columbia “arising from its involvement in organised crime in pursuit of a massive, ongoing smuggling scheme.”
On July 15 2010, in an agreement between the European Commission and BAT the Tobacco Company paid US$200m to settle smuggling-related issues.
Just last year, in 2014, BAT was fined £650,000 for over-supplying its own product to Belgium.
Imperial Tobacco
Imperial Tobacco, the fourth largest tobacco company in the world, and the company with the largest market share in the UK, has also been under fire.
In 2002, according to Her Majesty’s Revenue and Customs (HMRC), genuine Imperial brands accounted for 55% of the 17 billion cigarettes smuggled into the UK that year. Consequently, when the company was questioned about over-supply to countries notorious for smuggling at an appearance in front of the Commons public accounts committee, to which it claimed ignorance, Imperial’s chief executive was told: “One comes to the conclusion that you are either crooks or you are stupid, and you do not look very stupid.”
Imperial allegedly exported 1.7 billion cigarettes a year to Latvia which was enough for every man woman and child in the country to consume 722 cigarettes a year.
Philip Morris International
In 2004, Philip Morris International (PMI) paid the European Union US$1.25 billion to settle claims over tobacco smuggling.
As part of this settlement, PMI agreed to produce an annual report called Project Star about illicit tobacco in the European Union. An evaluation of Project Star by the Tobacco Control Research Group at the University of Bath found that the report “served the interests of PMI over those of the EU and its member states” and relied too heavily on their own surveys that were not independently verified.
Gallaher
Between 2005 and 2008, a legal battle fought by Gallaher (acquired by Japan Tobacco International in 2007) exposed its own facilitation of tobacco smuggling in which more than 20,000 internal documents between the company and a former Cypriot distributor. During the case the distributor, Ptolomeous Tlais, alleged the company set up a trading “environment” conducive to illegal activity.
Japan Tobacco International
In 2011, the Organised Crime and Corruption Reporting Project (OCCRP) revealed that Russia and the Middle East were the “hub of smuggling by JTI distributors” and that JTI’s own investigators said the company “did almost nothing when faced with reports …”
In 2013, JTI remained under investigation by OLAF, the European Union’s anti-fraud office for these smuggling offences. An enquiry has been made in 2015 to find out if this investigation is still ongoing.
Click here for more information on the tobacco industry, its involvement in illicit trade and its attempts to influence public health policy. And for a full history and documents, visit TobaccoTactics.org.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.