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tobaccoinaustralia.org.au
Tobacco in Australia Facts & IssuesA comprehensive online resource
Tobacco in Australia: Facts and Issues. Fourth Edition
A comprehensive review of the major issues in smoking and health in Australia, compiled by Cancer Council Victoria.
First edition published by ASH (Australia) Limited, Surry Hills, NSW, 1989 Second edition published by the Victorian Smoking and Health Program, Carlton South, Victoria (Quit Victoria), 1995 Third edition published by Cancer Council Victoria 2008 in electronic format only.
ISBN number: 978-0-947283-76-6
Suggested citation: Scollo, MM and Winstanley, MH. Tobacco in Australia: Facts and issues. 4th edn. Melbourne: Cancer Council Victoria; 2012. Available from www.TobaccoInAustralia.org.au OR <Author(s) of relevant chapter section>, <Name of chapter section> in Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. 4th edn. Melbourne: Cancer Council Victoria; 2012. <Last updated on (date of latest update of relevant chapter section)> Available from < url of relevant chapter or section>
Tobacco in Australia: Facts and Issues; 4th Edition updates earlier editions of the book published in 1995, 1989 and 2008. This edition is greatly expanded, comprising chapters written and reviewed by authors with expertise in each subject area. Tobacco in Australia: Facts and Issues is available online, free of charge. A hard copy version of this publication has not been produced.
This work has been produced with the objective of bringing about a reduction in death and disease caused by tobacco use. Much of it has been derived from other published sources and these should be quoted where appropriate. The text may be freely reproduced and figures and graphs (except where reproduced from other sources) may be used, giving appropriate acknowledgement to Cancer Council Victoria.
Editors and authors of this work have tried to ensure that the text is free from errors or inconsistencies. However in a resource of this size it is probable that some irregularities remain. Please notify Cancer Council Victoria if you become aware of matters in the text that require correction.
Editorial views expressed in Tobacco in Australia: Facts and Issues. Fourth Edition are those of the authors.
The update of this publication was funded by the Australian Government Department of Health and Ageing.
Cancer Council Victoria 1 Rathdowne Street Carlton VIC 3053
Project manager: Michelle Scollo Senior Policy Adviser, with assistance from Merryn Pearce, Policy and Projects Officer, Quit Victoria. Editorial advice and editing: Rosemary Moore Website design: Creative Services, Cancer Council Victoria Design and production: Jean Anselmi Communications Proofreading: Caz Garvey
Book excerpt List of chapters available at tobaccoinaustralia.org.auIntroduction
Chapter 1 Trends in the prevalence of smoking
Chapter 2 Trends in tobacco consumption
Chapter 3 The health effects of active smoking
Chapter 4 The health effects of secondhand smoke
Chapter 5 Factors influencing the uptake and prevention of smoking
Chapter 6 Addiction
Chapter 7 Smoking cessation
Chapter 8 Tobacco use among Aboriginal peoples and Torres Strait Islanders
Chapter 9 Smoking and social disadvantage
Chapter 10 The tobacco industry in Australian society
Chapter 11 Tobacco advertising and promotion
Chapter 12 The construction and labelling of Australian cigarettes
Chapter 13 The pricing and taxation of tobacco products in Australia
Chapter 14 Social marketing and public education campaigns
Chapter 15 Smokefree environments
Chapter 16 Tobacco litigation in Australia
Chapter 17 The economics of tobacco control
Chapter 18 The WHO Framework Convention on Tobacco Control
Appendix 1 Useful weblinks to tobacco resources
Tobacco in Australia Facts & Issues A comprehensive online resource tobaccoinaustralia.org.au
Chapter 10The tobacco industry in Australian society
i
Date of last update: 6 Dec 2011
Chapter 10: The tobacco industry in Australian society
Chapter 10
The tobacco industry in Australian society
Margaret Winstanley, 2007 Updated by Dr Becky Freeman, 2010Table of contents
10.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
10.1 The global tobacco manufacturing industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
10.2 The manufacturing industry in Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10.3 Retail value and volume of the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910.3.1 Comparison of tobacco sales with sales of other product
categories from Australian supermarkets, grocers and convenience outlets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.4 The tobacco companies operating in Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1210.4.1 British American Tobacco Australia Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.4.2 Philip Morris (Australia) Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.4.3 Imperial Tobacco Australia Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.5 Major importers operating in the Australian market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1710.5.1 Stuart Alexander Pty Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.5.2 Swedish Match Australia Pty Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.5.3 Other importers of tobacco products into Australia . . . . . . . . . . . . . . . . . . . . . . 18
10.6 Market share and brand share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010.6.1 Market share by brand: cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.6.1.1 Sales figures relevant to market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.6.1.2 Survey data on brand preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.6.1.3 Australian adult smokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.6.1.3 Australian secondary school students . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.6.2 Market share by brand: roll-your-own tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.6.3 Market share by brand: cigars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ii Tobacco in Australia:Facts and Issues
Date of last update: 6 Dec 2011
10.7 Trends in products and packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2510.7.1 Flavoured cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.7.2 Shorter or wider cigarettes: ‘quickies’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.7.3 Smokeless tobacco and ‘snus’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.7.4 Countering concerns about secondhand smoke . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.7.5 Electronic cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.7.6 Potentially reduced exposure products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.7.7 Roll-your-own tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.7.8 Organic, ‘green’ and additive-free cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.7.9 Packaging trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.7.10 Reduced fire risk cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.7.11 Specialty products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.7.12 Accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.8 The tobacco growing industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3710.8.1 Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.8.2 Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.8.2.1 Brief history. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.8.2.2 Government regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.8.2.3 The decline of tobacco farming in Australia . . . . . . . . . . . . . . . . . . . 38
10.9 The tobacco industry and the illegal tobacco market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4110.9.1 The emergence of chop-chop in Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.9.2 The size of the illicit tobacco market in Australia in 2010 . . . . . . . . . . . . . . . 42
10.9.3 Is smuggling advantageous to the international tobacco industry? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.10 The tobacco industry exposed: tobacco industry document repositories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.11 Corporate responsibility and the birth of good corporate citizenship . . . . . . . . . . . 4710.11.1 Corporate makeover: Philip Morris and Altria—
a case study in brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.11.2 Corporate links with charities and social causes . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.12 The tobacco industry’s revised stance on health issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5410.12.1 Smoking, health and addiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.12.2 Secondhand smoke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.13 Encouraging young people not to smoke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5710.13.1 Youth access programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.13.2 ‘Life skills’ programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.13.3 Anti-smoking advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.14 The environmental impact of tobacco production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6110.14.1 Land clearing and deforestation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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Date of last update: 6 Dec 2011
10.14.2 Pesticide use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.14.3 Tobacco production and climate change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.14.4 Genetically modified tobacco leaf. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.15 Ethical farming issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6610.15.1 Tobacco farming and child labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.15.2 Tobacco farming and ‘fair trade’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.16 The environmental impact of tobacco use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6910.16.1 The tobacco industry’s response to tobacco litter . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.17 Tobacco industry lobbying: overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7410.17.1 Freedom of choice arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.17.2 Economic importance of the industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.18 Tobacco industry lobbying: the tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7810.18.1 Tobacco industry-sponsored consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.18.2 Tobacco industry-affiliated research foundations . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.18.3 Australian-based organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.18.4 Tobacco industry-funded research in academic institutions . . . . . . . . . . . 80
10.18.5 Establishment of international manufacturers’ and growers’ organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.18.6 Australian manufacturers’ organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.18.6.1 Tobacco Institute of Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.18.6.2 Tobacco Information Centre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.18.7 Smokers’ rights groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.18.8 Tobacco retailers as a lobby base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.18.9 Marshalling opposition to smoking bans in entertainment and social venues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.19 Tobacco industry lobbying: the targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9010.19.1 Major scientific reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.19.2 Countering tobacco control legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
10.19.2.1 Case study: pre-emptive self-regulation . . . . . . . . . . . . . . . . . . . . . . . . 91
10.19.2.2 Case study: undermining the Framework Convention on Tobacco Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.19.3 Subverting public health initiatives and tobacco control organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.20 Intervention in political and judicial processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.21 Public attitudes to the tobacco industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10010.21.1 ‘Denormalisation’ of tobacco use and the tobacco industry . . . . . . . . . . . 100
10.22 The future of the tobacco industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10310.22.1 In Australia and other developed country, mature markets . . . . . . . . . . . 103
10.22.2 Low and middle income country markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
iv Tobacco in Australia:Facts and Issues
Date of last update: 6 Dec 2011
Tables and figuresTable 10.1.1 Estimated percentage share of global market, 2010
Table 10.1.2 Brand share (by global brand name), 2010 (%)
Table 10.3.1 Ranking by sales value of leading product categories in Australian groceries and supermarkets, 2010
Table 10.3.3 Convenience growth performance by category, 2010
Table 10.3.2 Ranking by % of sales value of leading product categories in Australian convenience retail outlets, 2007–2009
Table 10.4.1 Tobacco companies operating in Australia: summary
Table 10.4.2 British American Tobacco (Australasia Holdings)*, 2002–2009
Table 10.4.3 British American Tobacco Australia brands and products, 2011
Table 10.4.4 Philip Morris Australia, 2002–2009
Table 10.4.5 Philip Morris Australia brands and products, 2011
Table 10.4.6 Imperial Tobacco Australia, 2002–2009
Table 10.4.7 Imperial Tobacco Australia brands and products, 2011
Table 10.5.2 Swedish Match tobacco products sold through convenience retailers 2010
Table 10.5.1 Stuart Alexander tobacco products, sold through convenience retailers, 2010
Figure 10.5.1 Heavily discounted imported cigarettes are sold at Coles
Table 10.6.2 Top five cigarette brands at grocery retail by price category, 2010
Table 10.6.1 Market share by retail sector, Australian tobacco companies, 2009–10
Table 10.6.4 Percentage of adults smoking each brand in each pack size, 2010 Australian smokers 18+
Table 10.6.3 Top 10 cigarette brands and variants sold by convenience stores ranked by value % share, 2009
Table 10.6.5 Preferred brands by Australian secondary school students who smoked in the past week*†, 20083
vChapter 10: The tobacco industry in Australian society
Date of last update: 6 Dec 2011
Table 10.6.6 Percentage of current smokers obtaining their last cigarette from different pack sizes, Australia, 20083
Table 10.6.8 Leading cigar brands sold by grocery stores ranked by % value of market share, 2010
Table 10.6.9 Top 10 cigar brands, representing 76.0% of total sales of cigars sold through convenience retailers
Table 10.6.7 Top 10 roll-your-own tobacco brands, representing 84.2% of total sales of roll-your-own sold through convenience retailers
Figure 10.7.1 Camel Crush cigarette with a squeezable menthol bead in the filter
Figure 10.7.2 Dunhill Essence 20s compared to a standard pack of Dunhill 25s
Figure 10.7.3 American Spirit magazine ad (US 2011)
Table 10.8.1 Leading producers of tobacco leaf, 2007
Table 10.17.1 Tobacco industry interference in tobacco control summary of tactics
Table 10.17.2 Freedom of choice arguments and the tobacco control counter arguments
Table 10.17.3 Tobacco economic myths versus reality16
Table 10.20.1 Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2009–10
Table 10.20.2 Donations to Australian political parties by British American Tobacco Australia Limited, 1998–1999 to 2009–2010
Figure 10.20.1 Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2009–10
Figure 10.20.2 Donations to Australian political parties by British American Tobacco Australia Limited, 1998–99 to 2009–10
Figure 10.22.1 Share of the world covered by selected tobacco control policies, 2010
1Chapter 10: The tobacco industry in Australian society
Section: 10.0Date of last update: 26 March 2012
10.0
IntroductionThe selling of tobacco is a globalised operation resulting in a global health burden.1 In only a few nations (e.g. China, the US, Japan and Egypt) is the tobacco market controlled by companies headquartered in that country.2 Tobacco companies may be either government operated or publicly traded companies. Fourteen countries have major state-owned tobacco companies, accounting for approximately 40% of world cigarette consumption. (When excluding China this figure is only about 5%.) Most of these operations are based in the Middle East/Africa region and Asia Pacific.3 Government ownership alone is not always predictive of a lack of resolve to implement strong tobacco control measures. For example, the Thai Tobacco Monopoly is government owned, yet Thailand is internationally recognised as having one of the world’s most advanced tobacco control programs.4 Privatisation of formerly state owned tobacco companies has been shown to lead to decreased cigarette taxes, overturned tobacco control legislation and increased tobacco consumption and prevalence.5,6
The cigarette business is now primarily concentrated in the hands of five tobacco companies that collectively control about 90% of the world’s cigarette market, four of which are publicly traded corporations. The global tobacco industry produces more than 5400 billion cigarettes a year. The biggest single market is China, where the industry is state owned, with approximately 350 million smokers who account for more than 40% of the global total. Four international tobacco companies—Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Tobacco—account for some 45% of the global market, or around three-quarters of the market outside China.7
2 Tobacco in Australia:Facts and Issues
Section: 10.0Date of last update: 26 March 2012
References1. Haustein K-O and Groneberg D. Society, politics and the tobacco industry. In Haustein, K-O and Groneberg, D, eds, Tobacco or Health? Physiological and Social Damages Caused by Tobacco
Smoking. Springer e-books, 2010. 411–31. Available from: https://springerlink3.metapress.com/content/g8571304413tu081/resource-secured/?target=fulltext.html&sid=p5vwkv45auw2nlzc4dirmfbz&sh=www.springerlink.com
2. Physicians for a Smoke-Free Canada. The global tobacco economy: A snapshot of economies of multinational tobacco companies and of international tobacco control efforts in 2008. Ottawa: Physicians for a Smoke-Free Canada, 2009. Available from: http://www.smoke-free.ca/pdf_1/GlobalTobaccoEconomy-2009.pdf
3. Euromonitor International. Meeting the new challenges – corporate strategy in tobacco. London: Euromonitor International, 2011, [viewed 10 August 2011]. Available from: http://www.euromonitor.com/tobacco
4. World Health Organization. Tobacco industry interference with tobacco control. Geneva: WHO, 2009. Available from: http://whqlibdoc.who.int/publications/2008/9789241597340_eng.pdf
5. Gilmore AB and McKee M. Exploring the impact of foreign direct investment on tobacco consumption in the former Soviet Union. Tobacco Control 2005;14(1):13−21. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/1/13
6. Gilmore A, Fooks G and McKee M. The International Monetary Fund and tobacco: a product like any other? International Journal of Health Services 2009;39(4):789−93. Available from: http://www.ncbi.nlm.nih.gov/pubmed/19927416
7. British American Tobacco. Annual report 2010. Global market overview. The global tobacco market. London: British American Tobacco, 2011, [viewed 1 June 2011]. Available from: http://www.bat.com/ar/2010/directors-report/business-review/global-market-overview.html
3Chapter 10: The tobacco industry in Australian society
Section: 10.1Date of last update: 26 March 2012
10.1
The global tobacco manufacturing industryThe largest tobacco company in the world (measured by cigarette volume) is the state-owned China National Tobacco Corporation.1 According to industry reports, China National Tobacco Corporation has a more than 99% market share in China,2 making it the single largest tobacco manufacturer in the world. Philip Morris—including both the separate Philip Morris International and US market (Altria) companies)—runs second to China National Tobacco Corporation with 17.3% of the global market share, followed by British American Tobacco, Japan Tobacco International and Imperial Tobacco. See Table 10.1.1 for global market share for each of the five major tobacco companies.
The driving force behind consolidation of the tobacco companies is the desire to increase market share, particularly in emerging markets. Since 2009, this strategy has been increasingly important as it marks the first time world cigarette sales volume has fallen, by 0.2%. Market growth in favourable countries such as China failed to make up for declines (driven largely by tax increases) in the US and other less favourable countries. Even with falling smoking prevalence, total growth in population, particularly in Asia, means there is opportunity and potential for growth.1
The ability of the global companies to increase prices continued to outweigh the effect of volume falls in cigarettes in 2009 and in the first 9 months of 2010.4 The world tobacco market was worth US$664 billion in 2010, escaping relatively unscathed the global recession.5 However, tobacco as a category was downgraded by Citigroup analysts due to the unsustainability of profits rising amid volumes falling. According to the Citigroup report, tobacco could disappear from developed nations in the next 50 years:
‘no-one can be certain how smoking rates will play out in the distant future. [There are] three broad possibilities: Scenario A just extends the existing trend line until it hits zero. In Scenario B gradually fewer people quit, as we approach some sort of hard core of smokers, but in Scenario C smoking gets to a tipping point, as it becomes increasingly unacceptable and hence easier to regulate against. Possibly it may be (eventually) banned. We are certainly not saying that we know which is right; plainly we don’t. We think that each scenario is quite plausible. [But] it is quite possible that there will be no smokers left in Britain or many other developed countries in about 30–50 years.’6
According to Euromonitor International, the key company trends predicted from May 2011 onwards are:4
< Volumes down in 2009–2010 All the international companies recorded falling volumes in 2009 and in the first nine months of 2010. Multinationals’ cigarette market share (excluding China) rose to 68% in 2009, with British American Tobacco, Philip Morris International, Japan Tobacco International and Imperial Tobacco between them leading the cigarette markets in 61 out of the 80 leading markets.
< Values up due to price increases, though future less certain The increased product prices for the major companies continued to outweigh the effect of volume falls in cigarettes in 2009 and in the first nine months of 2010.
< Tobacco control success will continue More countries introduced public smoking bans and raised prices due to obligations under the WHO Framework Convention on Tobacco Control. Tax-driven price rises caused volumes to fall in most key markets and particularly in the European Union. Display bans, flavour bans and plain packaging are the new threats.
< High profile, high profit cigarette brand sales increasing The proportion of global sales accounted for by the top 10 brands continued to grow in 2009 and 2010. Tobacco companies continue their high profile brand strategy: looking to improve the product mix and perceived brand values.
Table 10.1.1 Estimated percentage share of global market, 2010
China National Tobacco Company 39.7Philip Morris International + Altria* 17.3 (14.7 + 2.6)British American Tobacco 12.4Japan Tobacco International 9.8Imperial Tobacco 5.2
*Altria is the completely separate US arm of Philip Morris
Source: Euromonitor International 20113
4 Tobacco in Australia:Facts and Issues
Section: 10.1Date of last update: 26 March 2012
< Development of cigarette alternatives to help ensure profitability in the longer term Non-combustible tobacco products such as Japan Tobacco International’s ZeroStyle Mint and Altria’s Marlboro/SkoalTobacco Sticks are the latest launches in the cigarette alternatives market.
Philip Morris International is the largest of the multinational tobacco companies. It owns the most popular and valuable tobacco brand in the world, Marlboro, which was worth US$67 billion in 20107 and has 7.3% total share of all the tobacco brands sold globally.8 See Table 10.1.2 for a summary of the global brand share. The almost universal consumer familiarity with global brand names can act as a potential shield against advertising restrictions.4 The establishment of licensing agreements and joint ventures with local tobacco industries has extended PMI’s market reach. One of the most important of these agreements is Philip Morris International’s partnership with China National Tobacco Corporation.9 The agreement establishes a joint venture company equally owned by both tobacco groups, to be headquartered in Lausanne. It licenses China National Tobacco Corporation to produce and distribute Marlboro in China, and in return, facilitates entry for China National Tobacco Corporation to the global tobacco market with a portfolio of ‘Chinese heritage brands’10 carefully modified to appeal to foreign palates,9 as well as providing China National Tobacco Corporation with other international business opportunities. Both companies benefit from shared sales, distribution and other business infrastructure.10 In a bid to compete with the international brands, China National Tobacco Corporation has plans to cut the number of domestic cigarette brands to less than 20 by 2015, which means removing more than 80 brands from the market.4
British American Tobacco ranks as the second largest transnational tobacco company after Philip Morris International. Although British American Tobacco has around 300 brands in its portfolio, it regards Dunhill, Kent, Lucky Strike and Pall Mall as its most important ‘Global Drive’ brands. Since 2005, British American Tobacco has also become active in the market for Swedish-style snus.i11 British American Tobacco’s stated intention is to overtake Philip Morris as the leading cigarette company in the world; currently, British American Tobacco has a higher proportion of its business in developing countries than Philip Morris International. British American Tobacco’s strategy is to increase sales (and prices) in the emerging economic regions such as Africa and Latin America to counterbalance the threats to its traditional marketplaces through its ‘Global Drive’ brands.4
Japan Tobacco International grew from a largely domestic company to an international one through acquisition of other companies/brands. The international business has a strong portfolio of brands lead by Winston (the second-largest international brand in the world and fastest growing over the last decade), and Camel (sold in over 100 countries). Mild Seven is the top-selling premium charcoal filtered brand in the world.4
Imperial is the smallest of the four international tobacco companies and the one most concentrated in a few markets. The Imperial Tobacco Group has substantially increased its global expansion since the mid-1990s, through brand acquisition (as has occurred in Australia) as well as increase in market share. Since its acquisition of Reemtsma Cigarettenfabriken GmbH in 2003, the Imperial Tobacco Group has become the second largest tobacco company in Germany and the fourth largest international tobacco company in the world, manufacturing and distributing cigarettes, loose tobaccos, cigars and smoking-related paraphernalia such as cigarette papers, filters and tubes. The company cites Asia, Eastern Europe, Africa and the Middle East as its key growth regions.12 Imperial Tobacco leads the global market in fine cut tobacco and reports its volume cigarette sales in terms of cigarette equivalents to demonstrate the way in which roll-your-own tobacco can mitigate volume falls in cigarette sales.4
The trend towards globalisation of the tobacco industry has lead to a globalised approach to marketing, research and lobbying,13 and factors such as trade liberalisation have opened new and lucrative markets to the transnational
i For further information on snus, see Section 10.7.3, Chapter 3, Section 33 and Chapter 12, Attachment A12.3.
Table 10.1.2 Brand share (by global brand name), 2010 (%)
Brand* Company %Marlboro Philip Morris International + Altria 7.3 (5.1 + 2.2)Winston Japan Tobacco International 1.8Mild Seven Japan Tobacco International 1.6L&M Philip Morris International 1.5Pall Mall British American Tobacco 1.3Kent British American Tobacco 1.2
*Excludes China National Tobacco Corporation brands and includes only those brands with a greater than 1% global market share.
Source: Euromonitor International 20113
5Chapter 10: The tobacco industry in Australian society
Section: 10.1Date of last update: 26 March 2012
companies. Companies are increasingly focused on their ‘international’ brands, it being more cost effective to manage and market a smaller number of iconic brands than to develop smaller, market-specific brands.14 The negative effects of tobacco industry globalisation can be illustrated through the imbalance between the money that flows from (often poor) smokers to (often not poor) shareholders and the money that flows from wealthy to poor countries to reduce tobacco use. For example, in 2005, British American Tobacco reported that smokers in the poorest countries of sub-Saharan Africa provided about $340 million to its bottom line, an amount equal to about 140% of the total global development assistance for tobacco control.15
Although the companies engage in strong competition, as an industry they are generally united in their desire to promote their products and undermine tobacco control measures.i At an international level, the tobacco industry engages against instrumentalities including the World Health Organization, the World Bank and the United Nations. It strongly fights to discourage countries from adopting the effective measures mandated in the WHO Framework Convention on Tobacco Control. The industry has marshalled and given voice to an international lobby for tobacco growers, especially powerful in countries where tobacco is a major agricultural commodity.ii Using arguments honed over decades of cooperation, the industry as a whole continues to advance misinformation about the nature of its products, obfuscates about addiction, and persists in its denials that advertising recruits new smokers.14
A research project by Stanford University’s Global Tobacco Prevention Research Initiative, the Cigarette Citadels, maps the location of more than 400 cigarette factories worldwide. The goal of the project is to pinpoint all the factories in the world producing cigarettes and provide basic facts about them.16 The interactive map can be accessed here: https://www.stanford.edu/group/tobaccoprv/cgi-bin/wordpress/
i An important exception is Altris, which broke ranks by publicly supporting the legislation that granted the US Food and Drug Administration regulatory authority over tobacco products. See Chapter 10, Section 10.23.1.
ii The tobacco industry argues that it is a vital, positive contributor to the economies of some countries. For discussion, see Chapter 17, Section 17.3.4.
6 Tobacco in Australia:Facts and Issues
Section: 10.1Date of last update: 26 March 2012
References1. American Cancer Society and World Lung Foundation. The Tobacco Atlas. Tobacco companies. Atlanta, Georgia: American Cancer Society, 2009, [viewed 1 June 2011]. Available from:
http://www.tobaccoatlas.org/companies.html
2. Shafey O, Dolwick S and Guindon G, eds. Tobacco control country profiles. Atlanta, Georgia: American Cancer Society, World Health Organization and International Union Against Cancer, 2003.
3. Euromonitor International. Tobacco. Company shares. Statistics. London: Euromonitor International, 2011, [viewed 20 June 2011]. Available from: http://www.euromonitor.com/tobacco
4. Euromonitor International. Meeting the new challenges – corporate strategy in tobacco. London: Euromonitor International, 2011, [viewed 10 August 2011]. Available from: http://www.euromonitor.com/tobacco
5. Euromonitor International. Tobacco. Market sizes. Statistics. London: Euromonitor International, 2011, [viewed 20 June 2011]. Available from: http://www.euromonitor.com/tobacco
6. Fletcher N. Imperial Tobacco and BAT fall as Citi says smoking could disappear by 2050. The Guardian, (London) 2011:7 Jan. Available from: http://www.guardian.co.uk/business/marketforceslive/2011/jan/07/imperial-bat-smoking-disappear
7. Millward Brown. Optimor. BrandZ top 100 most valuable global brands 2011. Millward Brown Optimor, 2011, [viewed 31 July 2011]. Available from: http://www.millwardbrown.com/Libraries/Optimor_BrandZ_Files/2011_BrandZ_Top100_Report.sflb.ashx
8. Euromonitor International. Tobacco. Brand shares (by global brand name). Retail volume. Statistics. London: Euromonitor International, 2011, [viewed 31 July 2011]; Available from: http://www.euromonitor.com/tobacco
9. O’Connell V. Philip Morris readies aggressive global push. The Wall Street Journal Online, 2008:29 Jan. Available from: http://online.wsj.com/article/SB120156034185223519.html?mod=hpp_us_pageone
10. Philip Morris International and China National Tobacco Corporation. The China National Tobacco Corporation and Philip Morris International announce the establishment of a long-term strategic cooperative partnership. Joint Press Release from Philip Morris International and China National Tobacco Corporation, 21 December 2005. [Media release]. Beijing: 2005 [viewed 31 July 2008]. Available from: http://www.philipmorrisinternational.com/pmintl/pages/eng/press/pr_20051221.asp
11. British American Tobacco. Corporate website. London: British American Tobacco, 2008, [viewed 30 June 2008]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AD6H?opendocument&SKN=1&TMP=1
12. Imperial Tobacco Group. Corporate website. Bristol, UK: Imperial Tobacco Group, 2008, [viewed 5 February 2008]. Available from: http://www.imperial-tobacco.com/index.asp
13. Hafez N and Ling PM. How Philip Morris built Marlboro into a global brand for young adults: implications for international tobacco control. Tobacco Control 2005;14(4):262-71. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/4/262.pdf
14. Yach D and Bettcher D. Globalisation of tobacco industry influence and new global responses. Tobacco Control 2000;9(2):206-16. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/9/2/206
15. Callard C. Follow the money: how the billions of dollars that flow from smokers in poor nations to companies in rich nations greatly exceed funding for global tobacco control and what might be done about it. Tobacco Control 2010;19(4):285-90. Available from: http://tobaccocontrol.bmj.com/content/19/4/285.full
16. Stanford’s Global Tobacco Prevention Research Initiative. Pinpointing the factories: where are all those ‘cancer sticks’ produced? Stanford, California: Stanford University, 2011, [viewed 30 June 2011]. Available from: https://www.stanford.edu/group/tobaccoprv/cgi-bin/wordpress/
7Chapter 10: The tobacco industry in Australian society
Section: 10.2Date of last update: 26 March 2012
10.2
The manufacturing industry in AustraliaThe Australian tobacco industry is a subset of the global industry. All three tobacco companies which operate in Australia—British American Tobacco Australia, Philip Morris International (Australia) and Imperial Tobacco Australia—are wholly owned subsidiaries of their overseas parent. Although the Australian tobacco market is considered to be mature1 and per capita consumption is in decline, the tobacco companies remain highly profitable entities and continue to successfully operate despite the challenging regulatory environment. In 2009, an estimated 21 928.5 million cigarettes were sold in Australia, the equivalent of 1669 packs of 25 cigarettes per minute (this does not include roll-your-own tobacco, which has increased in consumption).2
Overseas ownership of the Australian companies means that no tobacco company is currently listed on the Australian Securities Exchange and that the availability of information specific to local company operations is limited. British American Tobacco Australia offers a websitei with some Australian emphasis, but Philip Morris International (Australia) and Imperial Tobacco Australia provide little in the way of Australian data. It is probable that the tobacco companies prefer not to expose their activities to any more scrutiny than is strictly required by law. Most of the information used in the following sections discussing the Australian tobacco companies and their operating environment has been sourced from literature published by various trade and marketing associations, and cannot be independently verified. Given the immense impact of the tobacco industry on the health of Australians, this lack of accountability and disclosure is inconsistent with government priorities to reduce tobacco use and could be remedied by legislation requiring greater reporting of sales and marketing data.
Reflecting international trends, the companies operating in Australia have undergone consolidation. Only two of the three companies, Philip Morris International (Australia) and British American Tobacco Australia, own local manufacturing facilities. Brands sold by Imperial Tobacco Australia, which entered the market following the merger of WD & HO Wills and Rothmans in 1999, are marketed under licence by British American Tobacco Australia. In addition, a small number of companies import speciality products and brands. Chapter 10, Sections 10.3‒10.6 provide further detail on the size and composition of the Australian tobacco industry.
A total of 23 544.5 million cigarettes were produced in Australia in 2009, with 4,021.0 million cigarettes exported (primarily to Pacific Island countries) and an additional 2,465.0 cigarettes imported.2
i See: http://www.bata.com.au/
8 Tobacco in Australia:Facts and Issues
Section: 10.2Date of last update: 26 March 2012
References1. Imperial Tobacco Group. Rest of the world. Asia-Pacific. Bristol: Imperial Tobacco Group, 2011, [viewed 1 July 2011]. Available from: http://www.imperial-tobacco.com/index.
asp?page=355
2. Euromonitor International. Tobacco--Australia, September. London: Euromonitor International, 2010, [viewed 30 June 2011]. Available from: http://www.euromonitor.com/tobacco
9Chapter 10: The tobacco industry in Australian society
Section: 10.3.1Date of last update: 26 March 2012
10.3
Retail value and volume of the marketThe three major tobacco companies operating in Australia are not required to report retail sales data to government. Tobacco sales data would be extremely valuable in monitoring trends in tobacco use and in evaluating the effectiveness of tobacco control interventions. Because of the low level of illicit trade in Australia, retail data are likely to provide a reasonably accurate estimate of total tobacco consumption in Australia and would provide an unbiased benchmark against which self-reported tobacco consumption survey data could be evaluated.1 Some sales data are collected by market research companies and are available for purchase at a high cost, although some researchers have been denied access to this data despite being willing to purchase it.1 Accordingly, much of the information reported in this and the following sections is drawn from market research reports that cannot be independently verified.
In 2009, the total grocery value of cigarettes in Australia was $4.84 billion, which is an increase in value of 5.6% from the previous year. This increase in value is despite a decrease in volume of 2.1%, representing a total of 10.6 billion cigarettes sold at supermarkets alone.2 According to Euromonitor, although no precise data are provided, supermarkets gained actual volume share in cigarette in 2009, due to smokers switching from purchasing products from higher-priced convenience stores.3 A total of 21.9 billion cigarettes were sold in Australia in 2009,3 suggesting that about half of all readymade cigarettes were purchased at supermarkets.
Despite falling tobacco consumption and lower sales volumes (see Chapter 2), the value of tobacco sales has increased over the years, due to price increases caused in part by taxation increases. In 2009,i the taxation component ranged from about half of the retail price of premium brand cigarettes to up to around 70% of the retail price of economy brand cigarettes.3 Manufacturers of cigarettes receive 18–37% of the retail price, with manufacturers obtaining a higher margin from premium brands. Profitability has increased as well, and sales of tobacco products represent a lucrative market for retailers, and (except in the case of tobacconists) offer a strong return on relatively little floor space. Different retail outlets generally set different profit margins on tobacco products, with the average margin being 14.5%.3 For example, convenience stores set an estimated 30% gross marginii per pack. At the other end of the scale, supermarkets/grocers and tobacconists, which rely more heavily on larger sales volumes and discounted sales by the carton, have an average margin of 8% and 6% respectively.4 An Australian study of smoker purchasing patterns suggests that the lower prices charged by tobacconists and supermarkets results in larger average purchase sizes, and this potentially leads to higher tobacco consumption.5
10.3.1
Comparison of tobacco sales with sales of other product categories from Australian supermarkets, grocers and convenience outletsIn 2010, consumers spent $4.84 billion on cigarettes, down 2.1% on the previous year.2 Tobacco ranked second only to dairy produce in sales value, and the total sales value of tobacco products earned at least twice as much as from the frozen foods, bread and confectionary categories (Table 10.3.1).
i This pricing data was collected prior to the significant tax increase in April 2010.ii Gross margin is defined as ‘the difference between the price for which a business purchases goods and the price for which these goods are sold’: Pricewaterhouse Coopers
Table 10.3.1 Ranking by sales value of leading product categories in Australian groceries and supermarkets, 2010
Rank Product category Sales value ($ billion)1 Dairy case 5.752 Cigarettes 4.843 Cold beverages 4.084 Frozen foods 2.855 Health and beauty 2.596 Confectionary 2.277 Bread, rolls and hotplate 1.98 Pet needs 1.769 Paper, plastics, foil 1.710 Hot beverages 1.29
Source: Retail World2
10 Tobacco in Australia:Facts and Issues
Section: 10.3.1Date of last update: 26 March 2012
Tobacco sales are even more important to convenience and impulse retailers. Data from annual Nielsen reportsi of the convenience sector,6–9 which compiles information on market size and brand share of products sold through convenience outlets, shows that tobacco is the leading source of sales revenue. Tobacco, which includes cigarettes, tobacco and smoking accessories, consistently brings in close to 40% of all sales, over twice the amount spent on the next strongest category, ready to drink beverages (see Table 10.3.2). Convenience retailers generally work on higher margins on tobacco than supermarkets, with consumers trading off price for greater convenience. Due to these higher margins, consumers who purchase in convenience stores are thought to be less price sensitive, and more likely to choose premium brands.9
The 2010 Nielsen report8 (as of 14/01/2010) shows an overall growth of 3.3% in total value of convenience sector sales. The total per cent value share of top ranked category products was not provided in the 2010 report so instead the per cent value change from 2009 is reported. See Table 10.3.3. As the 2010 data show, cigarette and tobacco sales increased in terms of total per cent value of all convenience sales, 3.9% and 8.7% respectively, over and above the total growth of 3.3% in the total convenience sector.
i Nielsen’s ScanTrack Convenience service is a continuous census based scan measure representing over 1900 outlets across seven retailers including Caltex, Coles Express, 7-Eleven, BP, Mobil, Night Owl and Gull. Data for sales are based on 15 defined categories, which include tobacco (cigarettes, tobacco and accessories), beverages (carbonated beverages and fruit juice), confectionery, salty snacks (snack foods and nutritious snacks), ice cream, grocery (biscuits, cereal, bread, milk, cordial), communications and publications.
Table 10.3.2 Ranking by % of sales value of leading product categories in Australian convenience retail outlets, 2007–2009
Rank Product category 20076 20086 20097
1 Total Tobacco 39.4 38.8 39.02 Ready to drink 18.0 18.5 19.0*3 Communications 13.9 14.0 14.0*4 Confectionary 8.6 8.7 8.6*5 Milks 7.2 7.6 7.6*6 Magazines/newspapers 5.4 5.0 4.9*7 Ice cream 2.7 2.6 2.7*8 Snack Foods 2.7 2.6 2.59 Bread 1.3 1.3 1.210 Defined grocery .8 .8 .9*
* Numbers are approximate
Source: 2009 Nielsen report7
Table 10.3.3 Convenience growth performance by category, 2010
Total convenience sector 3.3Cigarettes 3.9Carbonated beverages 9.6Communications -4.2Milks 2.5Confectionery 4.4Magazines/newspapers -6.9Ice cream 5.5Snack foods 5.8
Tobacco 8.7Health/beauty 2.1Bread -0.5Fruit juice/drinks -6.9Cereal 17.5Biscuits 1.8Nutritious snacks 8Cordials 2.4
Source: 2010 Nielsen report8
11Chapter 10: The tobacco industry in Australian society
Section: 10.3.1Date of last update: 26 March 2012
References1. Gartner CE, Chapman SF, Hall WD and Wakefield MA. Why we need tobacco sales data for good tobacco control. Medical Journal of Australia 2010;192(1):3-4. Available from: http://
www.mja.com.au/public/issues/192_01_040110/gar11174_fm.html
2. Annual report, Market sizes & shares Retail World 2010;63(23):50.
3. Euromonitor International. Tobacco-Australia, September. London: Euromonitor International, 2010, [viewed 30 June 2011]. Available from: http://www.euromonitor.com/tobacco
4. PricewaterhouseCoopers. Sales of cigarettes and tobacco products by type of retail business. An analysis of sales of cigarettes and tobacco products to tobacco retailers in Australia. Document tabled as part of a formal submission (no. 46) made by British American Tobacco Australia in relation to the Inquiry into Tobacco Smoking in New South Wales in 2006. Sydney: PricewaterhouseCoopers, 2005. Available from: http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/2b14b998dda58536ca2571620017ecd2/$FILE/Sub%2046%20BATA%20-%20Attachment%202.pdf
5. Heuler S, Burton S and Clark L. Retail tobacco outlets: variation by usage segment. Australian and New Zealand Marketing Academy Conference. Sydney, Australia: 2009, viewed 3 July 2011. Available from: http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:8740?f0=type%3A%22conference+paper%22
6. Convenience & Impulse Retailing. Nielsen convenience report. Macquarie Park: Nielsen, 2008, viewed 1 July 2011. Available from: http://www.c-store.com.au/industry/acn/acn2008.pdf
7. Convenience & Impulse Retailing. Nielsen convenience and impulse sales report. Balmain, NSW: Berg Bennett, 2009, [viewed 1 July 2011]. Available from: http://www.c-store.com.au/industry/acn/acn2009.pdf
8. Convenience & Impulse Retailing. Nielsen convenience and impulse report. Macquarie Park, NSW: Nielsen, 2010, [viewed 1 July 2011]. Available from: http://www.c-store.com.au/industry/acn/Nielsen_Report_10.pdf
9. Convenience & Impulse Retailing. Tobacco challenge. Balmain, New South Wales: Berg Bennett, 2010, [viewed 2 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=503
12 Tobacco in Australia:Facts and Issues
Section: 10.4.1Date of last update: 26 March 2012
10.4
The tobacco companies operating in AustraliaThe tobacco market in Australia is dominated by three major companies, of which the largest is British American Tobacco Australia. In 2009, the three tobacco companies had combined total revenue of more than $2.8 billion and employed about 2100 people (Table 10.4.1).
10.4.1
British American Tobacco Australia LimitedBritish American Tobacco Australia (BATA) is a wholly owned subsidiary of British American Tobacco.5 British American Tobacco is a publicly listed company on the London Stock Exchange.
BATA was created in 1999 by the merger of WD and HO Wills Holdings Ltd (controlled by British American Tobacco) and Rothmans Holdings Ltd.6 The merger of the two Australian companies mirrored the international merger of British American Tobacco with Rothmans International, making the newly formed BATA the largest tobacco company operating in Australia. The then Chairman of Wills (and former Premier of New South Wales), Mr Nick Greiner, subsequently became Chairman of BATA.6 The new corporate entity soon realised higher profits due to sales growth, cost reductions and distribution advantages arising from rationalisation of resources.7
The head office and main manufacturing base for BATA are located in Eastgardens, in suburban Sydney.5 BATA’s printing and packaging is contracted out to Anzpac Services, which was a wholly owned subsidiary of BATA before it was sold in October 2008 to the Singapore-based New Toyo International Holdings for $60 million. This sale incorporated a seven-year agreement for Anzpac to supply British American Tobacco with cigarette cartons for production in Oceania, Malaysia, Singapore and Vietnam.8
The British American Tobacco Australasia area covers Australia, New Zealand and the Pacific Islands. Taking into account the wider region, BATA employs a total workforce of about 2200, who produce just over 18 billion cigarettes a year, with additional manufacturing facilities in Papua New Guinea, Fiji, the Solomon Islands and Western Samoa. BATA also produces tobacco goods for export throughout other Pacific Island nations, through its own export division.5 BATA imports some tobacco products, and is under contract by Imperial Tobacco Australia to manufacture a range of products (see Chapter 10, Section 10.4.3).
Since BATA is wholly owned by its UK parent British American Tobacco, financial data specific to BATA do not need to be made publicly available. In British American Tobacco’s annual company reports, Australia is included in the Asian-Pacific region, for which results from New Zealand and the South Pacific, and Asian countries including Indonesia, Malaysia, Pakistan, Japan, Bangladesh, South Korea, Taiwan and Vietnam are pooled.9 According to the 2010 British American Tobacco annual report, ‘Australia achieved strong profit growth through higher pricing and continued cost saving initiatives. Good performances from both Pall Mall and Winfield led to an increase in market share, although an ad hoc excise increase in May 2010 resulted in a drop in industry volumes’.9
Limited financial information for BATA is compiled and published annually as part of Business Review Weekly and IBISWorld’s annual ‘1000 Index.’ Information from recent Business Review Weekly reports is presented in Table 10.4.2. Because these data collapse the Asian-Pacific region, as do British American Tobacco’s annual reports, it is
Table 10.4.1 Tobacco companies operating in Australia: summary
BATA PMA ITARank (within Top 1000 companies in Australia) 195 420 727Total revenue ($m) 1667.9 754.7 405.0Net profit after tax ($m) 369.8 284.4 n/a% change in net profit from 2008 -18.8% 20.1% n/aShareholders’ funds ($m) 608.7 319.7 n/aTotal assets ($m) 3002.7 546.2 n/aNumber of employees 11001 7002 317*3
Volume share cigarettes 45.7%1 37.32 16.23
Volume share cigars 24.1% n/a n/aVolume share smoking tobacco 35.4% n/a 61.6
* 2007 figure
Source: BRW data 20094
13Chapter 10: The tobacco industry in Australian society
Section: 10.4.2Date of last update: 26 March 2012
not possible to isolate Australian performance. For the year 2009, Business Review Weekly ranked BATA at 195 out of Australia’s top 1000 companies on the basis of total revenue, and 63 out of 1000 for net profit after tax.4
BATA claims market leadership in Australia and the Pacific, with around 46% of market share in Australia, 75% in New Zealand and 100% throughout the Pacific Islands. BATA’s major brands in Australia are Dunhill, Winfield and Benson & Hedges.5 British American Tobacco’s annual reports since 200318–22 consistently allude to increasing profits in Australia, attributing this success to higher margins, reductions in overheads and improved supply chain efficiencies, and strong performances by its key brands, Winfield, Dunhill, Benson & Hedges and Holiday. Table 10.4.3 presents BATA’s Australian brand portfolio.
10.4.2
Philip Morris (Australia) LimitedPhilip Morris (Australia) Limited is the Australian subsidiary of Philip Morris International, based in Lausanne. Philip Morris Australia was established in 1954, the first overseas affiliate to be set up by Philip Morris International.24 Philip Morris Australia’s Australian head office and main manufacturing facility, which employs more than 200 people,2 are located in Moorabbin, a suburb of Melbourne, Victoria. The Australian headquarters provides support to Philip Morris interests in other countries in the Asian region, including Hong Kong, Japan, Malaysia, the Philippines and India.25 Philip Morris Australia’s major brands include Longbeach, Peter Jackson, Marlboro and Alpine.
On the basis of market share, Philip Morris Australia is the second largest tobacco company in Australia.25 Since its delisting as a public company in 1992, Philip Morris Australia has had no formal requirements to publicly lodge annual reports or financial statements specifying results from its Australian operations. No Australia-specific information is reported in Philip Morris International’s annual reports. However, limited
Table 10.4.2 British American Tobacco (Australasia Holdings)*, 2002–2009
2002 2003 2004 2005 2006 2007 2008 2009Year ending December
Total revenue ($m)† 1232.5 1310.4 1325.7 1431.8 1476.7 1506.5 1595.4 1667.8Profit after tax ($m)† 117.6 200.4 248.0 412.7 410.7 455.7 755.7 369.8Share-holder’s funds ($m)† 1681.9 1671.1 1294.5 1412.9 632.6 702.6 745.3 608.7Total assets ($m)† 3034.3 2844.7 2852.5 3018.8 2962.1 3026.3 3156.9 3002.7Number of employees* 2364 2009 2025 n/a 2300 n/a n/a 2200
* Table includes data from all operations throughout the Asian-Pacific region
† Figures unadjusted for inflation
Sources: Business Review Weekly10,11,12,13,14,15,16,17,4 BATA5
Table 10.4.3 British American Tobacco Australia brands and products, 2011
CigarettesBenson and Hedges, Cambridge, Craven A, Dunhill, Holiday, Kent, Kool, Pall Mall, Rothmans, Stradbroke, Vogue, Wills, Winfield
Roll your own tobacco Capstan, Holiday, Port Royal, Samson, Winfield
Cigars Captain Black, Dunhill, Mercator, Schimmelpenninck
Smoking accessories Ranch Filters ROLLIES and VENTTI Cigarette Papers
Source: The Australian Retail Tobacconist23
Table 10.4.4 Philip Morris Australia, 2002–2009
2002 2003 2004 2005 2006 2007 2008 2009
Year ending DecemberTotal revenue ($m)* 615.8 633.1 655.0 635.4 623.3 676.8 700.7 754.7Profit after tax ($m)* 121.2 155.2 187.1 193.4 172.6 226.2 236.7 284.4Shareholder’s funds ($m)* 275.4 315.2 335.6 431.4 403.4 260.3 28.7.6 319.7Total assets ($m)* 591.8 563.4 670.2 644.6 627.5 465.8 498.2 546.2Number of employees 753 732 735 745 691 n/a n/a 700
* Figures unadjusted for inflation
Sources: Business Review Weekly 10,11,12,13,14,15,16,17,4
14 Tobacco in Australia:Facts and Issues
Section: 10.4.3Date of last update: 26 March 2012
information is available through the annual listings compiled by the Australian Business Review Weekly and IBISWorld. Data from these sources are presented in Table 10.4.4. In 2009, Philip Morris Australia was ranked 420 out of Australia’s top 1000 enterprises on the basis of total revenue, and 83 out of 1000 for profit after tax.4
10.4.3
Imperial Tobacco Australia LimitedImperial Tobacco Australia Limited is the smallest and most recently formed of the tobacco companies operating within Australia. Imperial Tobacco Australia was established to coincide with the merger of WD & HO Wills Holdings Limited and Rothmans Holdings Limited as British American Tobacco Australia. At the time of the proposed merger, concerns were raised about the likelihood for reduction in competition in the Australian marketplace, thereby potentially causing a breach of Section 50 of the Trade Practices Act 1974. The Australian Competition and Consumer Commission agreed to permit the merger to proceed, on condition that another tobacco company enter the Australian market. The UK-based Imperial Tobacco Group was invited to enter the Australian market and in September 1999, Imperial Tobacco Australia commenced operations.26,
27 As part of the agreement allowing the formation of British American Tobacco Australia, Imperial Tobacco Australia was sold a portfolio of cigarette, roll-your-own tobacco and cigarette paper trademarks previously owned by Rothmans or WD & HO Wills for the sum of $325 million. The purchase gave Imperial Tobacco Australia an opening market share of 17.1%.27
Imperial Tobacco Australia ranked third in cigarettes sales in 2009, with a volume share of 16.2%. Imperial Tobacco Australia dominates the roll-your-own tobacco category, where it had a 62% volume share in 2009.3 For the year 2009, Imperial Tobacco Australia was rated 727 out of Australia’s top 1000 enterprises on the basis of total revenue.4 See Table 10.4.6 for financial information.
The head office for Imperial Tobacco Australia is located in the suburb of Baulkham Hills, north-west of Sydney. Regional offices operate in
Table 10.4.5 Philip Morris Australia brands and products, 2011
Cigarettes Alpine, Choice, GT, Longbeach, Marlboro, Peter Jackson, PJ EvolveRoll your own tobacco Longbeach, Marlboro, Peter JacksonCigars WingsSmoking accessories Ventti Filters and Paper, Cricket Lighters
Source: The Australian Retail Tobacconist23
Table 10.4.6 Imperial Tobacco Australia, 2002–2009
2002 2003 2004 2005 2006 2007 2008 2009($m)* Year ending SeptemberTotal revenue ($m)* 271.4 306.7 342.7 367.9 386.5 358.0 370.1 405.0Profit after tax ($m)* 27.2 36.5 47.7 53.2 2.7 5.9 217.2 n/aShareholder’s funds ($m)* 62.4 97.5 67.7 73.2 25.1 34.3 38.0 n/aTotal assets ($m)* 128.5 161.8 146.2 158.8 176.7 203.6 230.1 n/aNumber of employees 261 274 278 299 317 317 n/a n/a
* Figures unadjusted for inflation
Sources: Business Review Weekly 10,11,12,13,14,15,16,17,4
Table 10.4.7 Imperial Tobacco Australia brands and products, 2011
CigarettesBrandon, Camel, Davidoff, Escort, Horizon, JPS, More, Peter Stuyvesant, Superkings
Roll your own tobaccoBank, Champion, Dr Pat, Drum, Escort, Golden Virginia, Horizon, Log Cabin, Peter Stuyvesant, Stockman’s, White Ox
Pipe/Fine cut Amphora, Dr Pat, Log Cabin
Smoking accessoriesPapers, Rizla, and Tally Ho Papers Tally ho Filters, Tally Ho Cigarette Tubes, Tally-Ho cigarette maker machine
Source: The Australian Retail Tobacconist23
15Chapter 10: The tobacco industry in Australian society
Section: 10.4.3Date of last update: 26 March 2012
Melbourne, Adelaide, Perth and Brisbane. In 2007, Imperial Tobacco Australia employed 217 personnel. Imperial Tobacco Australia does not own manufacturing plant in Australia, but subcontracts British American Tobacco Australia to produce its Australian-made range of cigarettes and tobacco, including Horizon, Peter Stuyvesant and Escort. Additionally, Imperial Tobacco Australia imports a range of cigarettes and loose tobacco products from its international stable of brands, including Camel and Superkings.3
16 Tobacco in Australia:Facts and Issues
Section: 10.4.3Date of last update: 26 March 2012
References1. Euromonitor International. British American Tobacco Australia Ltd. Tobacco - Australia. London: Euromonitor International, 2010 [viewed 25 June 2011]. Available from: http://www.
euromonitor.com/tobacco
2. Euromonitor International. Local company profile, Philip Morris (Australia) Ltd. Tobacco - Australia, September. London: Euromonitor International, 2010 [viewed 31 March 2011]. Available from: http://www.euromonitor.com/tobacco
3. Euromonitor International. Local company profile, Imperial Tobacco Australia Ltd. Tobacco - Australia, September. London: Euromonitor International, 2010 [viewed 31 March 2011]. Available from: http://www.euromonitor.com/tobacco
4. Business Review Weekly and IBISWorld. The BRW 1000. BRW (Australia) 2011;33(3)
5. British American Tobacco Australia. About us. Maroubra, New South Wales: British American Tobacco Australia, 2011 [viewed 7 July 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WYL8K?opendocument&SKN=1
6. British American Tobacco plc. Australian announcement. Merger of Rothmans Holdings Limited and WD & HO Wills Holdings Limited, 19 May 1999. London: British American Tobacco plc, 1999 [viewed 24 January 2008]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AFRT/$FILE/medMD52XFE8.pdf?openelement
7. Neil M. Tobacco group lifts profit. The Canberra Times, 2001:1 Mar. 15
8. ANZPAC Services. Australian packaging covenant. Smithfield, New South Wales: ANZPAC Services, 2010 [viewed 07 July 2011]. Available from: http://www.packagingcovenant.org.au/documents/File/Anzpac%20Services%20%28Australia%29%20Pty%20Ltd%20AP_10_15.pdf
9. British American Tobacco. Complete annual report. London: British American Tobacco, 2010 viewed 08 July 2011. Available from: http://www.bat.com/ar/2010/downloads/index.html
10. Business Review Weekly and IBISWorld. BRW 1000 Index. BRW (Australia) 2002;22 Nov:33-114.
11. Business Review Weekly and IBISWorld. BRW 1000 Index. BRW (Australia) 2003;20 Nov
12. Business Review Weekly and IBISWorld. The BRW 1000. BRW (Australia) 2004;11 Nov:87-130.
13. Business Review Weekly and IBISWorld. BRW 1000. The List. BRW (Australia) 2005;10 Nov:77-123.
14. Business Review Weekly and IBISWorld. BRW 1000 List. BRW (Australia) 2006;9 Nov:28-98.
15. Business Review Weekly and IBISWorld. Australia’s 1000 Biggest Enterprises. BRW (Australia) 2007;22 Nov:33-114.
16. Business Review Weekly. BRW 1000 REVENUE. BRW (Australia) 2008;30(46):58-77. Available from: http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=35901081&site=bsi-live
17. Business Review Weekly. Top 1000 companies. BRW (Australia) 2010;32(3):24-40.
18. British American Tobacco plc. British American Tobacco Annual Review and Financial Summary Statement 2003. London: British American Tobacco plc,, 2004 [viewed 13 February 2008]. Available from: http://miranda.hemscott.com/ir/bats/ar_2003/main.htm
19. British American Tobacco plc. British American Tobacco Annual Review and Summary Financial Statement 2004. Addictiojn. London: British American Tobacco plc, 2005 2005 [viewed 13 February 2008]. Available from: http://miranda.hemscott.com/ir/bats/re_2004/main.htm
20. British American Tobacco plc. British American Tobacco Annual Review and Summary Financial Statement 2005. London: British American Tobacco plc,, 2006 [viewed 13 February 2008]. Available from: http://miranda.hemscott.com/ir/bats/ar_2005/download/pdf/management_review_regional_summary.pdf
21. British American Tobacco plc. Annual Report and Accounts 06. Annual Review and Summary Financial Statement and Directors’ Report and Accounts 2006. London: British American Tobacco plc, 2007 [viewed 19 January 2008]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AK34/$FILE/medMD6ZPCA4.pdf?openelement
22. British American Tobacco. Annual report and accounts 06. London: British American Tobacco, 2007 [viewed 17 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AK34/$FILE/medMD6ZPCA4.pdf?openelement
23. Trademarks. The Australian Retail Tobacconist 2011;81(2: May-July):18-20.
24. Philip Morris International. Australia. Country overview. Moorabin, Australia: Philip Morris, 2011 [viewed 9 July 2011]. Available from: http://www.pmi.com/marketpages/pages/market_en_au.aspx
25. Philip Morris International. Corporate website. New York: Philip Morris International, 2008 [viewed 8 January 2008]. Available from: http://www.philipmorrisinternational.com/pmintl/pages/eng/default.asp
26. Imperial Tobacco Group Australia Limited. Joint Select Committee on Tobacco Smoking in New South Wales. Inquiry into tobacco smoking in New South Wales. Imperial Tobacco Australia Limited. . Sydney, NSW: 2006. Available from: http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/468F5DB9395A7382CA257162000F4502
27. Imperial Tobacco Group PLC. Australian acquisition. News release, 27 September 1999. London: Imperial Tobacco Group PLC,, 1999 [viewed March 2008]. Available from: http://www.imperial-tobacco.com/index.asp?page=78&newsid=47&type=18&year=archive
17Chapter 10: The tobacco industry in Australian society
Section: 10.5.2Date of last update: 26 March 2012
10.5
Major importers operating in the Australian marketApart from the three major companies listed in Chapter 10, Section 10.4, a small number of companies operate within Australia as distributors of imported cigarettes and other tobacco products, and smokers’ requisites such as cigarette papers and filters for roll-your-own tobacco users.
10.5.1
Stuart Alexander Pty LtdStuart Alexander is an importer, marketer and distributor for tobacco products and a range of packaged food products. Stuart Alexander imports and markets tobacco products for Scandinavian Tobacco Group, Japan Tobacco International, Altadis, Swisher, Mac Baren and Ranch Filters.1 Stuart Alexander has a 50.0% value share of the $23.5 million cigar market in grocery stores.2
10.5.2
Swedish Match Australia Pty LtdSwedish Match Australia is the Australian operating division of the Stockholm based, publicly listed company Swedish Match. Swedish Match is engaged in the manufacture and distribution of moist snuff (snus), cigars, pipe and chewing tobacco, matches and lighters. Swedish Match operates production facilities in 11 countries, and is active in more than 100 countries. It is the largest producer of snus in Scandinavia, and is market leader for chewing tobacco products in the US.4
On 30 June 1998, Swedish Match purchased Bryant & May, makers of Redhead matches and firelighters, in Australia. Redheads firelighters continue to be manufactured in Australian, while Redheads Safety Matches are now imported from a Swedish Match factory in Sweden.5 Swedish Match Australia concentrates its tobacco product efforts in the cigar market (Table 10.5.2). Swedish Match has a 36.2% value share of the grocery store cigar market.2
Additionally, Swedish Match lists the following as part of its portfolio of brands: Redheads, Lighthouse, Cricket, Wee Willem, Ritmeester, White Owl, Villiger, Ventti, La Paz, El Credito, Macanudo, Davidoff and Borkum Riff.6
Table 10.5.1 Stuart Alexander tobacco products, sold through convenience retailers, 2010
Roll-your-own tobacco Old Holborn, Irish Cake, Plumcake, Mac Baren
CigarsAltadis, Bering, Colts, Hav-A-Tampa, Henri Wintermans, Henry Clay, Café Crème, Jewels, King Edward, Old Port, Sweet Aromatic
Smoking accessories Ranch Filters
Source: The Australian Retail Tobacconist3
Table 10.5.2 Swedish Match tobacco products sold through convenience retailers 2010
Cigarettes Djarum
Cigars
Alternativos, Arturo Fuente, Ashton, Aurora, Avo, Cuesta-Ray, Danneman, Davidoff, Delicias, La Paz , Diamond Crown, Don Sebastian, El Credito, Excalibur, La Flor Dominicana, La Paz, La Regenta, La Unica, Leon Jimenes, Macanudo, Puros Indios, Real AL Pedro, Rigoletto, Ritmeester, Villiger, White Owl, Willem II, Sosa, Salsa, Tabacalera, Tatiana, Tueros, Zino
Roll-your-own tobacco BaiPipe tobacco Borkum Riff, Erinmore
Smoking accessoriesVentti filters, Ventti and Zig Zag Papers, Cricket and Simplicity Lighters
Source: The Australian Retail Tobacconist3
18 Tobacco in Australia:Facts and Issues
Section: 10.5.3Date of last update: 26 March 2012
10.5.3
Other importers of tobacco products into AustraliaSeveral other businesses import cigarettes, cigars and other tobacco products into Australia. These include standard American and European cigarettes, as well as kreteks, flavoured cigarettes from Hong Kong and Chinese brands from the Shanghai Cigarette Factory.3,7 Chinese brands in particular sell more cheaply in Australia than many other brands, so appeal to the value end of the market as well as to expatriate Chinese smokers.7
Richlands Express imports the following cigarette brands: Gala, Easy, Ashford, Manitou and Manitou roll-your-own tobacco and Candlelight cigars. The Patron Group Australia imports the following Chinese cigarette brands: ChungHwa, Double Happiness, Golden Deer, Panda, Peony and GD.8 Pt Korea imports cigarette brands from Korea including Carnival, Esse Blue and Raison Blue. The Trojan Trading Company imports a range of international cigarette brands: Black Devil, DJ Mix Special Feel, Nat Sherman and Sobranie.3
In July 2010, supermarket giant Coles attracted critical media coverage due to the sale of ‘home-brand-style packs of 25 cigarettes, imported from Germany, at about $11, almost $4 a pack less than Australian-made Winfield and other leading brands’. The packs carry unfamiliar names such as Bayside, Deal, Harvest and Tradition and are being promoted by Coles as a cheaper alternative to well-known brands.9 See Figure 10.5.1.
At least two Australian distributors, Alexanders Cigar Merchants10 and Cigarworld Australia,11 operate their own specialist retail outlets, which sell cigars as well as other tobacco-related paraphernalia and giftware. Alexanders Cigar Merchants also distributes Cigar Aficionado publications.
Figure 10.5.1 Heavily discounted imported cigarettes are sold at ColesSource: R Squires, The Sunday Telegraph9
19Chapter 10: The tobacco industry in Australian society
Section: 10.5.3Date of last update: 26 March 2012
References1. Stuart Alexander. Brands. Corporate website. Rosebery, New South Wales: Stuart Alexander Pty Ltd, 2011, [viewed 15 July 2011]. Available from: http://www.stuartalexander.com.au/
brands/
2. Annual report, Market sizes & shares Retail World 2010;63(23):50.
3. The NSW Retail Tobacco Traders’ Association. Trademarks. Cigarettes, cigars, tobacco. The Australian Retail Tobacconist. Official publication of the NSW Retail Tobacco Traders’ Association 2011;81(May-July):18-20.
4. Swedish Match. Our company. Stockholm: Swedish Match, 2011, [viewed 6 July 2011]. Available from: http://www.swedishmatch.com/en/Our-company/
5. Redheads. History and milestones 1998. Clayton, Australia: Readheads, 2011, [viewed 9 July 2011]. Available from: http://www.redheads.com.au/history.php?hp=7
6. Swedish Match Australia. National packaging covenant. Action Plan 2008-2010. Swedish Match Australia Pty Ltd, 2008, [viewed 9 July 2011]. Available from: http://www.packagingcovenant.org.au/documents/File/Swedish_Match_Australia_AP_08_10.pdf
7. Convenience & Impulse Retailing. Brand matters - the importance of brand loyalty in the tobacco category. Australian Convenience Store News. Balmain, New South Wales: Berg Bennett, 2008, [viewed 31 August 2008]. Available from: http://c-store.net.au/magazine/view_article.php?id=169
8. Convenience & Impulse Retailing. Recommended retail prices for tobacco products and accessories. 2010, [viewed 15 July 2011]. Available from: http://www.c-store.com.au/industry/tobacco-pricing.pdf
9. Squires R. Coles importing cheap cigarettes from Germany and selling them at discount prices. The Sunday Telegraph, (Sydney) 2010:18 Jul. Available from: http://www.news.com.au/business/coles-importing-cheap-cigarettes-from-germany-and-selling-them-at-discount-prices/story-e6frfm1i-1225893467835
10. Alexanders Cigar Merchants. Company website. Melbourne: Alexanders Cigar Merchants, undated, [viewed 2 March 2008]. Available from: http://www.alexanderscigars.com.au/
11. Cigarworld Australia. Corporate website. Mermaid Waters, Queensland: Cigarworld Australia, 2005, Last modified June 2007 [viewed 3 March 2008]. Available from: http://www.cigarworld.com.au
20 Tobacco in Australia:Facts and Issues
Section: 10.6.1.1Date of last update: 26 March 2012
10.6
Market share and brand shareBritish American Tobacco Australia was the clear market leader in 2009–10, with 41.7% of tobacco sales in the grocery market and 55% in the convenience sector. Philip Morris ranked second, followed by Imperial, and Stuart Alexander had a small slice (0.4%) of the convenience sector (Table 10.6.1).1,2
10.6.1
Market share by brand: cigarettesThe Australian cigarette market has a number of differentiating features including different brand, variations on flavour or blend, pack size, and price. Market share can be assessed either by looking at sales figures (from various industry sources) or at the proportions of smokers who regularly smoke various sorts of products (from surveys of smokers).
10.6.1.1
Sales figures relevant to market shareIn broad terms, the cigarette market is broken into three main price brackets: ‘value’ for the price conscious smoker, ‘mainstream’ for the middle price range, and ‘premium’ for the higher end of the market. Table 10.6.2 shows the top five brands, by price category, ranked by share of total cigarette sales value in Australian grocery stores in 2010. It shows that in the supermarket and grocery sector, value brands are the most important segment in terms of percentage of cigarettes sold by value, occupying about 46% of market share based on % value of sales ($2.2 billion of the $4.77 billion in sales). Mainstream brands account for over one-third (37%) of the market, and the most expensive, premium brands account for about 16% of the market.
Although British American Tobacco Australia is overall market leader in the grocery sector it does not lead in all segments of the market when examined by price positioning and pack size. Philip Morris International is the company leader in the value category, with a 48.6% value share, followed by Imperial Tobacco Australia with 31.3% and British American Tobacco Australia at 20.1%. In the mainstream price category British American Tobacco Australia is the frontrunner, with 53.0% share trailed by Philip Morris International with 42.7% and Imperial
Table 10.6.1 Market share by retail sector, Australian tobacco companies, 2009–10
Company Retail sector % market shareGrocery/supermarket Convenience retailers
BATA 41.7 55Philip Morris 40.9 32Imperial 17.4 12.1Stuart Alexander n/a 0.4
Sources: Retail World1 and Convenience and Impulse Retailing2
Table 10.6.2 Top five cigarette brands at grocery retail by price category, 2010
Category: Value ($2.2 Billion – 5.2 billion sticks)
$0.42/stick
Category: Mainstream ($1.8 billion – 3.9 billion sticks)
$0.46/stick
Category: Premium ($770.8 million – 1.5 billion sticks)
$0.51/stickBrand % value share Brand % value share Brand % value share
Longbeach 40.5 Winfield 53.0 Benson and Hedges 50.0Horizon 23.3 Peter Jackson 36.4 Dunhill 21.0Holiday 11.9 Alpine 7.3 Marlboro 12.4Choice 7.6 Escort 3.3 Peter Stuyvesant 11.3
Brandon 3.9 n/a n/a Kent .5
Source: Retail World1
21Chapter 10: The tobacco industry in Australian society
Section: 10.6.1.3Date of last update: 26 March 2012
Tobacco Australia with only 3.3%. In the lucrative premium price category, British American Tobacco Australia dominates with a 75.3% share with Philip Morris International and Imperial Tobacco Australia each taking about a 12% share.1
At convenience retail outlets, British American Tobacco Australia clearly dominates with the popularity of Winfield, Dunhill and Benson & Hedges making up six of the top 10 brand variants sold. British American Tobacco Australia is followed by Philip Morris, with Peter Jackson and Longbeach making up the remaining four of the top 10. Imperial Tobacco Australia does not have a brand variant in the top 10, and is represented much lower in the rankings, with Horizon Blue (number 35) and Peter Stuyvesant Filter (number 36).2 The most popular pack size is 25s, followed by 30s. See Table 10.6.3 for details on brands sold through convenience retailers.
10.6.1.2
Survey data on brand preferencesWhile data on brand preferences among adults has been collected from surveys in Victoria and South Australia, neither the Australian Bureau of Statistics Health Survey or the Australian Institute of Health and Welfare’s National Drug Strategy Household Survey have asked about brand preferences, and so only limited data are available at the national level.i
10.6.1.3
Australian adult smokersData from the Australian arm of the International Tobacco Control policy evaluation study from 2010 show a pattern of use similar to that evident in the sales data tabulated above, with Winfield, Longbeach, Peter Jackson, Horizon and Holiday the brands most preferred by Australian adult smokers.
10.6.1.3
Australian secondary school studentsNational surveys of smoking prevalence and behaviours among Australian secondary school pupils have included questions about brands smoked. Table 10.6.5 shows the cigarette brands most commonly smoked by school students in 2008.3 Brand preference among school-aged smokers is broadly similar to that indicated by the total market share surveys shown in the preceding tables. In 2008, Winfield (42%) was the most popular cigarette brand among young smokers. Peter Jackson and Longbeach were both smoked by 13% of current young
i Questions about brands purchased were included in the early surveys evaluating the impact of the National Tobacco Campaign from 1997 to 2001, but reports from this survey have not been published for some years.
Table 10.6.3 Top 10 cigarette brands and variants sold by convenience stores ranked by value % share, 2009
Rank Brand Pack size Manufacturer1 Winfield Blue 25 BATA2 Winfield Gold 25 BATA3 Peter Jackson Rich 30 PMI4 Benson & Hedges Smoooth 25 BATA5 Dunhill Distinct 25 BATA6 Winfield Sky Blue 25 BATA7 Peter Jackson Original 30 PMI8 Winfield Blue 20 BATA9 Longbeach Rich 40 PMI
10 Longbeach Original 40 PMI
BATA = British American Tobacco Australia, PMI = Philip Morris International
Source: Convenience and Impulse Retailing2
Table 10.6.4 Percentage of adults smoking each brand in each pack size, 2010 Australian smokers 18+
20 25 30 35 40 50 Brand%
Winfield 11 89 0 0 0 0 18.6
Longbeach 11.2 0 24.5 0 64.3 0 16.7
Peter Jackson 9.9 7.7 81.3 1.1 0 0 15.5
Horizon 2.5 0 24.1 0 2.5 70.9 13.5
Benson and Hedges 5.7 92.5 1.9 0 0 0 9
Holiday 2.6 2.6 21.1 0 0 73.7 12.9
Alpine 0 100 0 0 0 0 5.1
Dunhill 10.3 86.2 3.4 0 0 0 4.9
Marlboro 73.3 26.7 0 0 0 0 2.6
Escort 28.6 28.6 0 42.9 0 0 1.2
Size % 9.4 36.8 23 0.7 11.1 19.1
Source: 2010 International Tobacco Control Policy Evaluation Study, n =587, unpublished data
22 Tobacco in Australia:Facts and Issues
Section: 10.6.2Date of last update: 26 March 2012
smokers. Since it is illegal in Australia to sell cigarettes to children under the age of 18, under-age smokers are more likely to procure cigarettes from friends or the home, so brands usually smoked are likely to reflect the preferences of the older smokers around them. Other factors known to influence choice of brand among young people include price and marketing.
Cigarettes were most commonly obtained from packets of 25 (40% of all current youth smokers), followed by packets of 20 (29%) and 30 (16%). Among 12–15 year olds, a similar proportion of current smokers obtained cigarettes from packs of 20 (31%) and packs of 25 (31%). Among 16–17 year olds, fewer current smokers used packs of 20 (26%) than packs of 25 (48%). See Table 10.6.6.
10.6.2
Market share by brand: roll-your-own tobaccoImperial Tobacco Australia accounted for a 62% volume share in the roll-your-own market in 2009.4 In 2010, at convenience retailers, Imperial Tobacco Australia was also the clear market leader in the roll-your-own category, well ahead of British American Tobacco Australia. Philip Morris has only a minor interest in the roll-your-own market. See Table 10.6.7. According to the trade publication, Convenience and Impulse Retailing, roll-your-own has been in continuous growth since 2000 and has accelerated in popularity since 2007 due to the price pressures felt by consumers. The April 2010 25% tobacco excise increase further fuelled roll-your-own market growth. According to 2010 Aztec data, the roll-your-own category achieved a volume growth of 5.8% in the past 12 months while tailor-made cigarettes declined by –5.8%.5 According to Aztec, tailor-made cigarettes represent 95.75% of sales, roll-your-own represent 3.55% and cigars represent 0.7% of the tobacco category at convenience outlets.6
Table 10.6.5 Preferred brands by Australian secondary school students who smoked in the past week*†, 20083
Age
12–15 year olds 16–17 year olds Total
BrandMale (%)
Female (%)
Total (%)
Male (%)
Female (%)
Total (%)
Male (%)
Female (%)
Total (%)
Winfield 39.1 40.9 40.1 46.8 42.1 43.9 42.6 41.5 42.0
Peter Jackson 17.8 15.4 16.5 9.1 10.2 9.7 13.3 12.9 13.1
Longbeach 16.8 17.7 17.3 7.3 11.1 9.2 11.9 14.5 13.3
Horizon 5.3 7.3 6.4 4.2 4.2 4.2 4.7 5.8 5.3
Benson & Hedges 2.8 3.6 3.2 9.9 10.8 10.4 6.5 7.1 6.8
Holiday 5.7 2.5 3.9 1.3 1.6 1.4 3.4 2.0 2.7
Dunhill 2.4 3.4 2.9 2.9 4.1 3.5 2.6 3.7 3.2
Marlboro 2.8 1.7 2.2 2.9 5.4 4.2 2.8 3.5 3.2
Escort 1.8 1.5 1.6 1.3 1.0 1.1 1.6 1.2 1.4
Alpine 1.0 1.3 1.2 0.0 0.7 0.4 0.5 1.0 0.8
Percentages of total in each age and gender category.
• Percentages exclude responses from students who gave more than one brand
† Percentages do not add to 100 as only the most frequent responses are listed
Table 10.6.6 Percentage of current smokers obtaining their last cigarette from different pack sizes, Australia, 20083
Age
12–15 year olds 16–17 year olds Total
Pack sizeMale (%)
Female (%)
Total (%)
Male (%)
Female (%)
Total (%)
Male (%)
Female (%)
Total (%)
20 31.5 31.2 31.3 26.3 26.4 26.4 28.9 28.9 28.9
25 32.1 30.2 31.1 50.2 46.5 48.3 41.3 37.8 39.5
30 12.9 21.5 17.7 11.8 16.9 14.4 12.3 19.4 16.1
35 2.7 2.3 2.5 1.2 1.0 1.1 1.9 1.7 1.8
40 14.1 11.4 12.6 6.5 7.9 7.2 10.2 9.7 10.0
50 11.0 7.8 9.2 8.6 4.1 6.4 9.8 6.1 7.8
23Chapter 10: The tobacco industry in Australian society
Section: 10.6.3Date of last update: 26 March 2012
10.6.3
Market share by brand: cigarsAll cigars sold in Australia are imported, and apart from British American Tobacco Australia, the tobacco companies do not have substantial engagement in the cigar market. The grocery value of cigar sales in 2009 was $23.5 million for a total 22 million sticks. Small cigars accounted for the bulk of the sales with a 70.6% value share, followed by medium 23.8% and large 5.6%. Most cigars (67.7%) were sold in packs of 10, followed by 5s (17.9%) and 20s (12.6%) with singles making up only 1.7% of sales. Stuart Alexander is the cigar market leader with a 50% share, with Swedish Match coming in second with a 36.2% share and British American Tobacco Australia rounding out the category with a 13.8% share.1 Table 10.6.8 details the popular cigar brands sold through Australian grocery stores.
Willem II Blue is the best-selling cigar brand/variant in Australian convenience stores.5 See Table 10.6.9 for a ranking of the top 10 cigars products sold through convenience retailers. According to Convenience & Impulse Retailing, there are three types of roll-your-own (RYO) consumers:
‘There are the RYO ‘Loyalists’ who have been smoking RYO for a long time, enjoy the natural RYO taste and purchase predominantly big pouches such as 50g. There are the RYO ‘Dualists’ a growing segment of consumers who smoke both [tailor-made cigarettes] and RYO. Finally, there are the [tailor-made cigarettes] ‘Switchers’ who move to RYO for either value reasons or for the unique flavours that RYO can offer. These consumers generally purchase smaller pouches such as 30 g.’5
Table 10.6.7 Top 10 roll-your-own tobacco brands, representing 84.2% of total sales of roll-your-own sold through convenience retailers
Brand/product ManufacturerChampion Tobacco Ruby 30 g ITAChampion Tobacco Ruby 50 g ITAPort Royal Tobacco Rum&Wine 50 g BATAWinfield Reg Tobacco Blue 30 g BATAWinfield Reg Tobacco Gold 30 g BATAWinfield Reg Tobacco Blue 50 g BATAWhite Ox Tobacco 30 g ITAWinfield Reg Tobacco Gold 50 g BATAWhite Ox Tobacco 50 g ITADrum Tobacco Blue 30 g ITA
BATA = British American Tobacco Australia, ITA = Imperial Tobacco Australia
Source: Convenience & Impulse Retailing5
Table 10.6.8 Leading cigar brands sold by grocery stores ranked by % value of market share, 2010
Small Medium Large
Brand Share % Brand Share % Brand Share %
Willem II 37.8 Henri Wintermans 62.3 Henri Wintermans 97.9
Cafe Creme 23.9 Willem II 36.0 Willem II 2.1
Captain Black 18.3
Old Port 17.3
Source: Retail World1
Table 10.6.9 Top 10 cigar brands, representing 76.0% of total sales of cigars sold through convenience retailers
Brand Share %
Willem II Wee Willem Blue 10s Swedish Match
Captain Black Dark Crema 20s BATA
Cafe Creme Blue 10s Henri Wintermans
Henri Wintermans Short Panatella 5s Henri Wintermans
Willem II Wee Willem Regular 10s Swedish Match
Cafe Creme Regular 10s Henri Wintermans
Captain Black Sweet Cherry 20s BATA
Captain Black Classic Filter 20s BATA
Henri Wintermans Long Panatella 5s Henri Wintermans
Henri Wintermans Half Corona 5s Henri Wintermans
BATA = British American Tobacco Australia
Source: Convenience and Impulse Retailing5
24 Tobacco in Australia:Facts and Issues
Section: 10.6.3Date of last update: 26 March 2012
References1. Annual report, Market sizes & shares Retail World 2010;63(23):50.
2. Convenience & Impulse Retailing. Nielsen convenience and impulse sales report. Balmain, NSW: Berg Bennett, 2009, [viewed 1 July 2011]. Available from: http://www.c-store.com.au/industry/acn/acn2009.pdf
3. White V and Smith G. Australian secondary school students’ use of tobacco, alcohol, and over-the-counter and illicit substances in 2008. Report prepared for the Drug Strategy Branch Australian Government Department of Health and Ageing. 2009, [viewed 16 July 2011]. Available from: http://www.ancd.org.au/images/PDF/australian_secondary_school%20_drugs_2008.pdf
4. Euromonitor International. Local company profile, Imperial Tobacco Australia Ltd. Tobacco - Australia, September. London: Euromonitor International, 2010, [viewed 31 March 2011]. Available from: http://www.euromonitor.com/tobacco
5. Convenience & Impulse Retailing. RYO & cigar sales continue to defy the odds. Balmain, New South Wales: Berg Bennett, 2010, [viewed 15 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=544
6. Convenience & Impulse Retailing. Tobacco. Endless challenge. Balmain, New South Wales: Berg Bennett, 2010, [viewed 15 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=525
25Chapter 10: The tobacco industry in Australian society
Section: 10.7.1Date of last update: 26 March 2012
10.7
Trends in products and packagingInnovations in design have become increasingly important to the tobacco industry as other avenues of promotion have closed and concerns about health have become stronger among customers and those exposed to tobacco smoke. This section takes a look at some recent developments observed in the Australian and international marketplace.
10.7.1
Flavoured cigarettesIt has long been industry practice to add ingredients to alter the flavour of tobacco. For example, menthol variants of many brands have been available for decades. Menthol additives improve the palatability of inhaled smoke by providing sensations of coolness and smoothness.1 A 2011 supplement issue of the journal, Tobacco Control, was dedicated to research exploring the role of menthol in smoking initiation, tobacco marketing, nicotine dependence, sensory experience, potential disease-inducing effects and smoking cessation.2 Internationally, several brands have now introduced menthol capsules that allow users to control the degree of mentholation of their cigarette by squeezing a gel bead inside the filter (see Figure 10.7.1 for an example).
Flavourings have also been used to compensate for variations in quality of tobacco leaf,3 and for perceived loss of body and flavour in lower tar cigarettes.4 Flavourings mask unpleasant tastes and sensations associated with smoking cigarettes, making them of greater appeal to novice users.5 Flavours may be added to the tobacco, the paper cigarette tube, the filter and the packaging in order to impart a pleasant smell.6
In 2008, citing concerns over flavoured cigarettes appealing to young people, the Australian Health Ministers agreed to ban the sale and investigate banning the importation of flavoured cigarettes across Australia.7 All states and territories have acted (or have plans to act) and have applied a ban to overtly ‘fruity or lolly’ flavoured cigarettes only. This ban does not apply to menthol cigarettes, nor does it apply to the long list of flavours that are added to almost all cigarettes/cigars on the market.
In Australia the three tobacco companies, Philip Morris, British American Tobacco Australia and Imperial Tobacco Australia voluntarily provide an annual list of ingredients that can be found in tobacco products. The voluntary agreement was signed by the tobacco companies and the former Minister for Health and Aged Care, Dr Michael Wooldridge, in 2000.8 Under the agreement the companies provide annual reports to the government regarding the ingredients of cigarettes.9 The data are posted unmodified on the department’s website.i
The British American Tobacco Australia report alone lists 89 different flavours that are added to tobacco products. These ingredients range from the sweet and fruity—apricot extract, honey, prune juice—to the rich and soothing—cocoa extract, coffee extract and vanillin—and many chemical flavour compounds in between—trimethyl pyrazine, phenylcarbinol and isobutyraldehyde.10
At its fourth session in November 2010, the WHO Framework Convention on Tobacco Control (WHO FCTC) Conference of the Parties adopted partial guidelines for implementation of Articles 9, regulation of the contents of
i All reports can be found here: http://www.health.gov.au/internet/main/publishing.nsf/Content/health-pubhlth-strateg-drugs-tobacco-ingredients.htm
Figure 10.7.1 Camel Crush cigarette with a squeezable menthol bead in the filterSource: http://tobaccoproducts.org/index.php/Camel_Crush
26 Tobacco in Australia:Facts and Issues
Section: 10.7.2Date of last update: 26 March 2012
tobacco products and 10, regulation of tobacco product disclosures. Two key recommendations in the guidelines included:1) Parties should regulate, by prohibiting or restricting, ingredients that may be used to increase palatability in
tobacco products2) Parties should require that manufacturers and importers of tobacco products disclose to governmental
authorities information on the ingredients used in the manufacture of their tobacco products at specified intervals, by product type and for each brand within a brand family.11
The guidelines further emphasise the role of flavourings in tobacco use initiation and continuation:
‘The harsh and irritating character of tobacco smoke provides a significant barrier to experimentation and initial use. Tobacco industry documents have shown that significant effort has been put into mitigating these unfavourable characteristics. Harshness can be reduced in a variety of ways including: adding various ingredients, eliminating substances with known irritant properties, balancing irritation alongside other significant sensory effects, or altering the chemical properties of tobacco product emissions by adding or removing specific substances. Some tobacco products contain added sugars and sweeteners. High sugar content improves the palatability of tobacco products to tobacco users. Masking tobacco smoke harshness with flavours contributes to promoting and sustaining tobacco use.’12
In the US a staggering range of flavourings have been introduced, including fruit (e.g. orange, mandarin, lime, cherry, coconut, strawberry and apple), confectionary (toffee, truffle, vanilla, chocolate, honey, fudge and marshmallow), spices (cinnamon, mint, spearmint, wintergreen, coffee and herbs) and flavours reminiscent of cocktails or liquors (e.g. margarita, amaretto, rum, cognac and bourbon). The products are stylishly packaged6 and the cigarettes themselves may also be coloured, patterned and decoratively filter tipped.13, 14 Flavoured varieties have also been made available on a seasonal or themed basis.14
Studies on the popularity of mainstream flavoured brands in the US (such as those produced by the major tobacco companies RJ Reynolds and Brown & Williamson) have shown that they are used primarily by younger people.14 The recent proliferation of flavoured brands has been attributed to the tobacco industry’s need to attract new smokers in an increasingly challenging regulatory environment.6, 14 In 2007, a campaign to engage with smokers through online media to help design tobacco packaging that reflected the personality of four flavoured cigarettes provided further evidence of the marketing potential offered by adding flavours to tobacco products.15
10.7.2
Shorter or wider cigarettes: ‘quickies’Limited opportunities to smoke due to the introduction of smoking restrictions in many environments has prompted the development of a shorter cigarette, which allows quicker smoking (seven puffs instead of the more usual 10) while still aiming to deliver a satisfying dose of nicotine. One company to cater for this market is Philip Morris, with Marlboro Intense, which has been launched in Turkey.16
Philip Morris has also developed Marlboro Wides, a thicker but shorter than usual cigarette, which is packaged in a box with a flip top opening from side to side instead of front to back.16
Very small, thin cigarettes such as Dunhill Essence (Figure 10.7.2) are sold in Australia in very small, attractive packets that are cheaper than standard packs of 20 or 25s, easy to conceal and very quick to smoke.
Figure 10.7.2 Dunhill Essence 20s compared to a standard pack of Dunhill 25s
27Chapter 10: The tobacco industry in Australian society
Section: 10.7.4Date of last update: 26 March 2012
10.7.3
Smokeless tobacco and ‘snus’Smokeless tobacco, also known as chewing tobacco, spit tobacco and oral tobacco, is popular in countries such as the US, India and Sweden. Smokeless products are often promoted to the youth market and to women in societies where overt smoking is not socially acceptable.17 In Australia, sale of smokeless tobacco products intended for oral use was banned through issue of a Consumer Protection Notice under the Trade Practices Act in 199118 however customs regulations allow individuals to import small quantities of smokeless tobacco for personal use19i provided that all customs duties are paid upon receipt. Despite the Commonwealth ban and similar provisions under tobacco control legislation in each state and territoryii, a 2004 study of South Asian shops in Sydney found that 50 of the 53 shops surveyed (94%) sold smokeless tobacco: 31 (62%) of these kept it under the counter, 14 (28%) had it on display behind the counter, and five (10%) had it on shelves accessible to consumers. No shopkeeper advised that sale of the products was illegal.20
A particular type of smokeless tobacco product known as ‘snus’ is widely used in Scandinavia. Although addictive, snus is less harmful than other forms of tobacco use, and it may also be useful as an aid in cessation.21 Philip Morris and RJ Reynolds are promoting snus-style smokeless tobacco products in test markets in the US.22 British American Tobacco are also promoting their own snus brands in South Africa, Japan and Canada.23 Whether snus may have a wider role in reducing harm caused by smoking is a matter of vigorous debate.24-29 For discussion, see Chapter 12, Attachment 3. The health consequences of using snus are discussed in Chapter 3, Section 33.
In the US, a company called Star Scientific30 has developed another variation on traditional oral tobacco products.31 Ariva is presented in the form of a compressed capsule of tobacco designed to dissolve in the mouth, thereby eliminating the need for spitting or disposing of the spent product. Ariva is intended for ‘adult smokers who increasingly find themselves in situations where they can’t smoke—for example, mothers who choose not to expose their children to second-hand smoke, travellers who fly on long plane trips, or restaurant patrons…’.31
10.7.4
Countering concerns about secondhand smokeA range of products claiming to mask, reduce or eliminate secondhand smoke has been developed since the rise in concern about environmental tobacco smoke during the 1980s. (Some of these products have also claimed to offer health benefits to the user—see Section 10.7.5).
Lemon and vanilla-scented cigarettes were test marketed in the US and Germany in the late 1980s, the fragrant smoke intended ‘to overcome most of the objections non-smokers have about the smell of burning tobacco’.32 In 1992, Philip Morris investigated marketing a new ‘reduced odour’ cigarette, declaring that the long-term goal of its research and development activities was to develop a completely odourless cigarette.33
RJ Reynolds experimented in the US in the mid-1990s with Salem Preferred,34 which was claimed to mask and change the odour of cigarette smoke (while not actually reducing its quantity.35) A variation on this, Salem Pianissimo, was launched by RJ Reynolds in Japan in 1995, claiming to be ‘the clean cigarette’, offering ‘less lingering smell’ and ‘less sidestream smoke’. Following the success of Salem Pianissimo, RJ Reynolds launched four more brands in Japan that claimed similar attributes, announcing that ‘these cigarettes were designed to encourage peaceful coexistence among smokers and non-smokers’. Since then, other manufacturers have also launched ‘cleaner’ cigarettes.35
Entirely new ways of consuming tobacco have also been devised with the intention of reducing sidestream smoke. RJ Reynolds tested Premier in the US briefly in 1989.36 Premier, which delivered nicotine to the user by heating rather than burning the tobacco, was withdrawn soon after not, only because smokers disliked the flavour, but, ironically, because it had an unpleasant and pervasive aroma that tended to spread well beyond the smoker.32 RJ Reynolds has since launched another non-combustion, low emission product, Eclipse (see Section 10.7.5 below).
i No more than 1.5kg of chewing tobacco and snuffs intended for oral use is permitted under customs legislation.ii See, for instance s15 of Tobacco Act 1987 (Vic). no. 81 Available from: http://www.austlii.edu.au/au/legis/vic/consol_act/ta198773/
28 Tobacco in Australia:Facts and Issues
Section: 10.7.6Date of last update: 26 March 2012
Emissions testing of so called ‘electrically heated cigarette smoking systems’ do show reductions in the particulates commonly found in secondhand smoke; however levels are not reduced to zero, nor can the leap be made that such levels would be deemed safe for non-smokers.37, 38
In 2004, Philip Morris developed a product called the Heatbar, a battery-powered plastic device, about the size of a mobile phone, which heats rather than burns tobacco. Smokers insert their usual cigarette into the device. Inhaling the warmed tobacco delivers a flavoured aerosol to the user, while purportedly producing 90% less sidestream smoke than a normal cigarette. The Heatbar has undergone limited market testing in Switzerland and Australia16 but does not appear to have impressed younger smokers.39 Despite the device being approved for sale in Australia,40 there is no evidence that demand for such a product has eventuated.
10.7.5
Electronic cigarettesElectronic cigarettes (also known as e-cigarettes) are essentially a nicotine delivery system that was devised to potentially overcome indoor smoking bans and to provide an alternative for smokers concerned about continued smoking of traditional cigarettes. They are battery-operated devices that vaporise cartridges of liquid nicotine and look very similar to traditional cigarettes except they are plastic and have a small LED light on the end. The retail sale of electronic cigarettes containing nicotine is illegal in Australia, although nicotine-free models can be freely sold. Electronic cigarettes have not been approved by the Therapeutic Goods Administration41 and according to the Therapeutic Goods Administration website, ‘they should not be considered a safe product, nor a suitable aid to quitting smoking’.42 Determined e-cigarettes buyers can go online and make a purchase from hundreds of websites and eBay sellers. The devices are expensive, costing upwards of $120, plus the nicotine cartridges must be continually re-ordered.43
There is very limited published medical research on the safety and efficacy of electronic cigarettes as an alternative to smoking or as a smoking cessation aid. One small study completed in New Zealand with 40 adult smokers who smoked at least 10 cigarettes per day found that the Ruyan electronic cigarette alleviated desire to smoke after overnight abstinence, was well tolerated and had a nicotine absorption profile similar to the Nicorette inhalator. The authors of this study note that electronic cigarettes still need to be evaluated for longer-term safety, potential for long-term use and efficacy as a cessation aid.44
In the US, the Food and Drug Administration45 has banned electronic cigarette manufacturers and retailers from marketing these products as therapeutic devices. Electronic cigarettes can however be sold freely in the US provided they make no such claims. The Food and Drug Administration has stated that it intends to develop a strategy to regulate this emerging class of products as tobacco products under the Family Smoking Prevention and Tobacco Control Act.46
Similar to the ongoing debate about the harm reduction potential of snus, much controversy surrounds the use and promotion of electronic cigarettes. Avid users of electronic cigarettes, known as Vapers,47 argue that as electronic cigarettes emit far fewer harmful emissions than traditional cigarettes they should be promoted as a safe alternative to smoking. Opponents point out that little is known about the actual health effects of these products and that they are often promoted as an alternative to smoking when smoking is not permitted rather than a total smoking cessation device.48 A research agenda has been proposed to help address these concerns, with general agreement being that more concrete evidence is needed before health agencies can confidently endorse these products.49
10.7.6
Potentially reduced exposure productsIndustry efforts to produce a ‘safer’ cigarette go back many decades. While publicly maintaining that their products did not cause disease or death among their users, the tobacco companies experimented with various forms of filters, ventilation systems, and modifications to the tobacco leaf itself in an effort to reduce harmful emissions
29Chapter 10: The tobacco industry in Australian society
Section: 10.7.7Date of last update: 26 March 2012
from tobacco smoke.i Of these, products claiming to deliver lower levels of tar, nicotine and carbon monoxide were the major focus from the 1970s onwards, even though the tobacco companies were well aware that these product modifications delivered little or no real health benefits to smokers53-56 Cigarettes promoted as being ‘light’, ‘ultra light’ and ‘mild’ came to dominate the market during the 1980s and 1990s; these descriptors are now banned in Australia (see Chapter 12 for detailed discussion). It is now a matter of record that ‘smoking cigarettes with lower machine-measured yields of tar and nicotine provides no clear benefit to health’(p25).57
Other modifications to the standard cigarette designed to reduce smokers’ exposure to the harmful contents of cigarette smoke have since been developed. These ‘potentially reduced exposure products’ (PREPs) generally claim to emit reduced levels of nicotine or carcinogens due to the use of additives, different techniques in leaf blending and processing, using genetically modified leaf, by the application of new filtration methods, or through heating rather than burning the tobacco.58 In the US, several products of this nature have been introduced with very limited commercial success, with most products removed from retail sale after being tested in a few markets.16, 36, 55, 59-61
The implications of PREPs use are of considerable concern to health interests. There is evidence that consumers may overestimate the possible risk reduction associated with using PREPs.55 This and other research raises concerns that PREPs might attract (and addict) new users, discourage quitting, result in rebound usage of standard cigarettes at a level even higher than before, or induce successful quitters to return to what they perceive to be a safe form of tobacco use.55, 60 By leading consumers to believe that they are safer, PREPs could also reassure young smokers that there is no need to quit, since there are safer alternatives to switch to in the future.62
A more viable alternative to industry led development of PREPs is for governments to regulate the contents and product attributes of tobacco products. The WHO Study Group on Tobacco Product Regulation has been established to advise the World Health Organization ‘about scientifically sound recommendations to Member States addressing the most effective and evidence-based means in order to fill regulatory gaps in tobacco control and achieve a coordinated regulatory framework for tobacco products’.62 Membership of the WHO Study Group on Tobacco Product Regulation is drawn from scientists in the fields of product regulation and laboratory analysis of tobacco contents, emissions, and design features. This group has released three reports on the scientific basis of tobacco product regulation.62,63,64 The study group has made several recommendations on the topics of smokeless tobacco products and their health effects, and implications for harm reduction and research needs; 65 ‘fire safer’ cigarettes and approaches to reduced ignition propensity; mandated lowering of toxicants in cigarette smoke, such as tobacco specific nitrosamines and other constituents; and cigarette machine smoking regimens.62,63,64
10.7.7
Roll-your-own tobaccoThe decision to use roll-your-own is generally made by consumers seeking a more economical way of smoking. More information about market and brand share of roll-your-own can be found in Section 10.6.2. In light of price and tax increases, in recent years the roll-your-own market has grown in Australia. Roll-your-own cigarettes comprise loose tobacco either manually rolled into a cigarette paper and sealed shut with saliva or assembled with a simple machine using a readymade paper tube, with or without the addition of a filter.
In Australia the growing market for roll-your-own has led to several innovations. Slimmer filters allow a packet of tobacco to last longer, by making more, smaller cigarettes. Roll-your-own accessories sales show there has been a noticeable trend towards slimmer and smaller filter variants.66 Loose tobacco closer in characteristic to the tobacco used in readymade cigarettes has been produced to accommodate smokers switching from factory-made cigarettes to roll-your-owns. Smaller pouch sizes accommodate price-conscious smokers.67
Packaging has been redesigned and updated to attract attention, and popular cigarette brands such as Peter Jackson and Longbeach have been launched in a roll-your-own variant. The availability of different styles and sizes of cigarette papers and filters has been increased to encourage roll-your-own smokers to express their personal style.68
i From the 1970s onwards, tobacco companies patented many inventions to lower the quantities of toxic chemicals in cigarette smoke, but they were not adopted at the time. To incorporate them into standard cigarette design and promote a ‘safer cigarette’ would be tantamount to admitting that tobacco use was dangerous, something which no tobacco company openly declared before 1999. There is no proof that any of these inventions would have produced a ‘safer’ cigarette. For further information about changes to cigarette design and technology, refer to The US Surgeon General’s report for 1981, The Changing Cigarette.50–52
30 Tobacco in Australia:Facts and Issues
Section: 10.7.9Date of last update: 26 March 2012
Overseas, innovations have included smaller, cheaper cigarette papers,22 and techniques to expand the tobacco have allowed the smoker to make more cigarettes with the same weight of tobacco.69 In Germany, Philip Morris has marketed its ‘tobacco block system’, in which tobacco is sold in compressed blocks. A special machine is used that inserts tobacco from the block into a readymade cigarette cylinder. The tobacco block system has been introduced as a way of exploiting the tax differential between roll-your-own tobacco and manufactured cigarettes.16
10.7.8
Organic, ‘green’ and additive-free cigarettesIn recent years a variety of ‘green’ attributes have been claimed for particular tobacco products, responding to growing consumer awareness of environmental concerns. With no hint of irony, these include references to purity, naturalness and the lack of additives, as well as claims for the farming practices employed in the production of the leaf—such as allusions to organic growing conditions, reforestation programs, use of renewable energy sources like wind power70 and ethical sourcing from farmers.71 This trend has been especially marked in the US, where70 consumer concerns have led to the marketing of organic, ‘100% additive free natural’ brands such as American Spirit72 and 1st-Nation.71 In 2011, American Spirit ran advertisements in US magazines claiming to be ‘eco-friendly’, reflecting the growing consumer demand for green products.73 See Figure 10.7.3.
There is also evidence that these types of descriptors tend to offer the consumer reassurance, since ‘natural’ commonly connotes beneficial attributes.70 Although some manufacturers are careful not to claim health attributes for their products,72, it is significant that US tobacco companies have sought to retain the right to use the descriptor ‘natural’ on their cigarettes sold outside the US.70
At the time of writing no brands from Australian manufactures claim to be organic or additive free, although at least two imported brands, American Spirit74 and Manitou Organic Green75 are available, as well as a small range of herbal cigarettes.
10.7.9
Packaging trendsRestrictions on tobacco advertising in Australia and other countries have made product packaging an increasingly important vehicle for brand identity and positioning.76-78 In Australia, Winfield cigarette packs directly allude to their former advertising campaigns by carrying inside the flip top ‘…anyhow have a Winfield’, the slogan made famous by actor Paul Hogan in advertisements outlawed in the 1980s.79
New trends in pack design included limited edition designer packages,i cigarette packs that emulate sleek mobile telephone design,16 and splittable packs which become two smaller packs, similar in dimensions to an iPod.81
For further information on packaging trends in Australia, see Chapter 11, Section 11.10.
i Such as the limited edition Dunhill My Mixture range launched in an ‘innovative 20s spring-box format’ during late 2007.80
Figure 10.7.3 American Spirit magazine ad (US 2011)Source: Koch 201173
31Chapter 10: The tobacco industry in Australian society
Section: 10.7.11Date of last update: 26 March 2012
10.7.10
Reduced fire risk cigarettesLit cigarettes have been a leading cause of fires and death and injury due to fires.82 In Australia, smoking is conservatively estimated to be the direct cause of at least 4574 fires annually;83 and almost one in every four deaths due to fire is attributable to fires caused by smoking84 (see also Chapter 3, Section 19). The role of smoking-related materials in causing fires has led to the introduction of ‘reduced fire risk’ cigarettes, otherwise known as ‘reduced ignition propensity’ cigarettes, in Canada and in most states of the US.85
Reduced fire risk cigarettes self extinguish when not being actively smoked.83, 86 Other methods of smoking (such as pipes, cigars and hand-rolled cigarettes) have always required active inhalation from the smoker to keep the tobacco burning.87 Ordinary cigarettes remain alight because of the addition of ‘burn accelerants’. These additives keep the cigarette burning at a constant rate and help hold the burning tip and ash together.88
The tobacco manufacturers have long had the technology to produce cigarettes with reduced fire risk.89, 90
The most commonly used method involves making alterations to paper in which the cigarette is wrapped.91 The addition of two or three thin bands of less porous paper works as ‘speed bumps’—when the tip of the cigarette burns down to one of the bands, the change in the paper restricts oxygen supply to the burning tobacco and makes the cigarette go out. Other ways of reducing ignition propensity include using expanded tobacco, adjusting the size of the cigarette, or making other changes to wrapping papers.87, 91 However reduced fire risk technology is not effective in all cases. Tests on cigarettes for sale in the state of New York, where reduced fire risk regulations came into force in 2004, have shown that about 1 in 10 reduced fire risk cigarettes still burned for its full length.91 It is therefore important not to regard or promote reduced fire risk cigarettes as completely ‘fire-safe’—but they are less likely to cause a fire than other cigarettes.
As noted above, reduced fire risk requirements have now been mandated or are filed for legislation in most states of the US, and throughout Canada as well.85i In November 2007, member states of the European Union voted to begin the process of regulating for reduced fire risk cigarettes, and the government of the UK has made a separate announcement that it intends to introduce regulations independently and to a more rapid timetable.92
In March 2007, Standards Australia, recognised by Australian governments as Australia’s peak standards body,ii finalised a standard for testing reduced fire risk cigarettes. The Determination of the Extinction Propensity of Cigarettes (AS 4830-2007) was developed in collaboration with the Australasian Fire and Emergency Service, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the three tobacco companies operating in Australia, and other stakeholders. The standard tests the likelihood of combustion if a burning cigarette is placed in contact with material similar to that of household furniture. 93
In June 2008 the Product Safety Policy Section of the Australian Competition and Consumer Commission released a regulation impact statement considering workable options for introducing reduced fire risk regulation in Australia under the auspices of the Trade Practices Act 1974.88 In the interests of protecting consumers and simplifying compliance, the Australian Competition and Consumer Commission has recommended ‘establishing explicit government regulation by declaring a mandatory minimum standard for reduced fire risk cigarettes’ (p15).88
The tobacco industry has a history of opposing the introduction of reduced fire risk cigarettes. See Section 10.18.2.2.
10.7.11
Specialty productsIn the US, restricted opportunities to smoke have led to increased emphasis on specialty products designed to enhance the experience. While people may be smoking less, they are tending to smoke more selectively.22, 94 This
i The tobacco industry engaged in many years of lobbying against reduced fire risk requirements in the USA, the primary reason most likely being fear of litigation. See Section 10.17.2 for discussion.
ii http://www.standards.org.au/default.asp
32 Tobacco in Australia:Facts and Issues
Section: 10.7.12Date of last update: 26 March 2012
has boosted the luxury, premium end of the market. Top of the range cigarettes may be hand finished, using special papers and filters, and presented in luxury tins or boxes. Holographic cigarette papers, which ‘provide a scintillating light show’, have been adopted by one manufacturer.94 The demographic groups likely to be attracted to these premium products are typified as the young, more affluent, adventurous, sophisticated, better informed and sociable smoker, or established smokers who are cutting back on tobacco use but treating themselves to quality products.94
As part of this trend, cigar use has also increased in popularity, and the market has expanded to accommodate a broader range of sizes, styles and flavourings.22 Smaller cigars are intended to appeal to ‘time-poor’ smokers. Sweeter and more aromatic tobaccos, which enhance flavour and improve the smell of secondhand smoke, are making cigars more appealing to female users.95 Another major feature that is driving cigar success is the individual foil packaging and bar codes that allow the cigars to be sold individually.96
In the cigar category, there has also been a move towards ‘smaller is better’ and the sales of smaller cigarillos continue to grow. Pack sizes are also becoming smaller. Another emerging cigar trend is for flavoured cigars, which retailers claim are especially popular with the female consumers and smokers making the transition from cigarettes to cigars. Five of the top 10 cigars sold in Australia in 2010 were flavoured.66
According to an industry report, cigars are popular across all social and cultural boundaries.97 The key advantage that convenience and impulse outlets have in selling cigars is that they are often purchased outside of regular shop trading hours for a special occasion.96 Not to have cigars as part of the products available at convenience retail ‘is like taking Mars Bars off the confectionary shelf ’, according to a manager at Swedish Match, an importer of cigars into Australia.98
10.7.12
AccessoriesAccessories and gimmicks used in support of tobacco use are an important means by which tobacco companies can keep their products and brands interesting to the consumer. Items such as cigarette cases, cigar cutters, humidors (for cigar storage), crystals (intended to keep cigars fresh), glass pipes, hookahs, cigarette lighters and odour neutralisers in the form of candles and incense are all trends in the US. According to a North American tobacco accessories distributor, ‘It’s like the fashion business. It’s very difficult to predict. That’s why you have to keep refreshing your assortment’.99
Accessories are also important in the roll-your-own market. In 2010, when Swedish Match launched Bali Shag roll-your-own tobacco in Australia it also introduced a special tobacco rolling mat as a promotional strategy to enhance awareness of Bali Shag in the retail trade.100
33Chapter 10: The tobacco industry in Australian society
Section: 10.7.12Date of last update: 26 March 2012
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www.ncbi.nlm.nih.gov/pubmed/14982706
2. Anderson SJ, Glantz SA, Klausner K, Lee YO, McCandless PM, Salgado MV, et al. Menthol cigarettes. Tobacco Control 2001;20(suppl. 2):ii1-56. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_2.toc
3. Heyzer E. Best raw materials not essential for tobacco products market success. World Tobacco 1988; March:41-3.
4. Hirschhorn N, Bialous S and Shatenstein S. Philip Morris’ new scientific initiative: an analysis. Tobacco Control 2001;10(3):247–52. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/10/3/247
5. Connolly G. Sweet and spicy flavours: new brands for minorities and youth. Tobacco Control 2004;13(3):211-12. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/13/3/211
6. Carpenter C, Wayne G, Pauly J, Koh H and Connolly G. New cigarette brands with flavors that appeal to youth: tobacco marketing strategies. Health Affairs 2005;24(6):1601-10. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16284034
7. Australian Government Department of Health and Ageing. Australian Health Ministers’ Conference. Flavoured cigarettes [Media release]. Canberra: Department of Health and Ageing, 2008 [viewed 18 July 2011]. Available from: http://www.health.gov.au/internet/main/publishing.nsf/Content/mr-yr08-dept-dept180408.htm
8. Commonwealth of Australia. Voluntary agreement for the disclosure of the ingredients of cigarettes. Canberra: Department of Health and Aged Care, 2000, [viewed 19 July 2011]. Available from: http://www.health.gov.au/internet/main/publishing.nsf/Content/417E95914EBD1E5DCA25774D000FF086/$File/agreement.pdf
9. Australian Government Department of Health and Ageing. Tobacco. Australian cigarette ingredient disclosure. Canberra: Australian Government Department of Health and Ageing, 2011, [viewed 19 July 2011]. Available from: http://www.health.gov.au/internet/main/publishing.nsf/Content/tobacco-ingred
10. British American Tobacco Australia Ltd. Australia ingredients report 1 March 2009 - 1 March 2010. 2010, [viewed 21 July 2011]. Available from: http://www.health.gov.au/internet/main/publishing.nsf/Content/643F3FB35E9EFBE7CA256F190004A474/$File/bata10.pdf
11. FCTC/COP4(10). Partial guidelines for implementation of Articles 9 and 10 of the WHO Framework Convention on Tobacco Control (Regulation of the contents of tobacco products and Regulation of tobacco product disclosures). Geneva: World Health Organization, 2010. Available from: http://www.who.int/fctc/guidelines/Decisions9and10.pdf
12. FCTC/COP4(10). Partial guidelines for implementation of Articles 9 and 10 of the WHO Framework Convention on Tobacco Control (Regulation of the contents of tobacco products and Regulation of tobacco product disclosures). Geneva: World Health Organization, 2010. Available from: http://www.who.int/fctc/guidelines/Decisions9and10.pdf
13. Yamine E. Flavoured cigarettes face ban. The Daily Telegraph, (Sydney) 13 August 2007: Available from: http://www.news.com.au/dailytelegraph/story/0,22049 22231977-5006009,00.html
14. Lewis MJ and Wackowski O. Dealing with an innovative industry: a look at flavored cigarettes promoted by mainstream brands. American Journal of Public Health 2006;96(2):244-51. Available from: http://www.ajph.org/cgi/reprint/96/2/244
15. Freeman B and Chapman S. Open source marketing: Camel cigarette brand marketing in the ‘Web 2.0’ world. Tobacco Control 2009;18(3):212. Available from: http://tobaccocontrol.bmj.com/content/18/3/212.full
16. O’Connell V. Philip Morris readies aggressive global push. The Wall Street Journal Online, 2008:29 Jan. Available from: http://online.wsj.com/article/SB120156034185223519.html?mod=hpp_us_pageone
17. World Health Organization. Regulation urgently needed to control growing list of deadly tobacco products [Media Release, 30 May 2006]. Geneva: World Health Organization, 2007, [viewed 20 June 2007]. Available from: http://www.who.int/mediacentre/news/releases/2006/pr28/en/
18. 1991. Consumer Protection Notice No 10 of 1991 - Permanent Ban on Goods, Trade Practices Act 1974 (Cth) now Competition and Consumer Act 2010 (Cth). Available from: http://www.comlaw.gov.au/Details/F2010L03294.
19. Customs (Prohibited Imports) Regulations 1956 (Cth). no. 90 Available from: http://www.comlaw.gov.au/Series/F1996B03651
20. Sachdev P and Chapman S. Availability of smokeless tobacco products in south Asian grocery shops in Sydney. Medical Journal of Australia 2004;183(6):334. Available from: http://www.mja.com.au/public/issues/183_06_190905/letters_190905_fm-1.html
21. Foulds J, Ramstrom L, Burke M and Fagerstrom K. Effect of smokeless tobacco (snus) on smoking and public health in Sweden. Tobacco Control 2003;12:349-59. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/4/349
22. White L. Turning the tobacco tide. Distribution channels. Fairfax, Virginia: American Wholesale Marketers Association, 2008, [viewed 20 May 2008]. Available from: http://www.awmanet.org/dc/dc_cover0308.html
23. British American Tobacco plc. Company Website. London: British American Tobacco plc,, 2008, [viewed 17 January 2008]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AD6H?opendocument&SKN=1&TMP=1
24. Bates C, Fagerstrom K, Jarvis MJ, Kunze M, McNeill A and Ramstrom L. European Union policy on smokeless tobacco: a statement in favour of evidence based regulation for public health. Tobacco Control 2003;12(4):360-7. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/4/360
25. World Health Organization Scientific Advisory Committee on Tobacco Products Regulation. Recommendation on smokeless tobacco products. Geneva: WHO, 2002. Available from: http://www.who.int/tobacco/global_interaction/tobreg/brisbane_2002_smokeless/en/
26. Gray N. Mixed feelings on snus. The Lancet 2005;366(9490):966-7. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16168760
27. Broadstock M. Systematic review of the health effects of modified smokeless tobacco products. New Zealand Health Technology Assessment (NZHTA) report. Christchurch: Department of Public Health and General Practice, Christchurch School of Medicine and Health Sciences, 2007. Available from: http://nzhta.chmeds.ac.nz/publications/smokeless_tobacco.pdf
28. Foulds J and Kozlowski L. Snus—what should the public health response be? The Lancet 2007;369(9578):1976-8. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17498796
34 Tobacco in Australia:Facts and Issues
Section: 10.7.12Date of last update: 26 March 2012
29. Gartner CE, Hall WD, Chapman S and Freeman B. Should the health community promote smokeless tobacco (snus) as a harm reduction measure? PLoS Med 2007;4(7):e185. Available from: http://dx.doi.org/10.1371%2Fjournal.pmed.0040185
30. Star Scientific Inc. Company website. Petersburg (VA): Star Scientific, 2004, [viewed 20 May 2008]. Available from: http://www.starscientific.com/maintemplate/index.html
31. Star Scientific announces test market of Ariva smokeless tobacco ‘cigalettes’; test markets initiated in Dallas, Texas and Richmond,VA [Media release]. San Francisco: 14 Nov 2001 [viewed 30 May 2008]. Available from: http://findarticles.com/p/articles/mi_m0EIN/is_2001_Nov_14/ai_80043187/pg_1
32. United States: RJR still backing high-tech products. Tobacco Reporter 1989;May:7.
33. Philip Morris. Project Trace advertising brief. San Francisco: Legacy Tobacco Documents Library, University of California, 1992, [viewed 27 May 2008]. Available from: http://legacy.library.ucsf.edu/tid/oby90b00
34. RJR to test cigarettes that have less odour. The Wall Street Journal Asia, (Hong Kong) 1995:23 Mar. 8
35. Assunta M and Chapman S. A ‘clean cigarette’ for a clean nation: a case study of Salem Pianissimo in Japan. Tobacco Control 2004;13(suppl. 2):ii58-62. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/13/suppl_2/ii58
36. Wayne GF. Potential reduced exposure products (PREPs) in industry trial testimony. Tobacco Control 2006;15(suppl. 4):iv90-7. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/suppl_4/iv90.pdf
37. Frost-Pineda K, Zedler B, Liang Q and Roethig H. Environmental tobacco smoke (ETS) evaluation of a third-generation electrically heated cigarette smoking system (EHCSS). Regulatory Toxicology and Pharmacology 2008;52(2):118–21. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18639603
38. Tricker A, Schorp M, Urban H, Leyden D, Hagedorn H, Engl J, et al. Comparison of environmental tobacco smoke (ETS) concentrations generated by an electrically heated cigarette smoking system and a conventional cigarette. Inhalation Toxicology 2008;21(1):62–77. Available from: http://informahealthcare.com/doi/full/10.1080/08958370802207334
39. Houston C. The bluff puff, but it’s not the full quit. The Age (Melbourne) 2 June 2008 Available from: http://www.theage.com.au/national/the-bluff-puff-but-its-not-the-full-quit-20080601-2kjp.html
40. Houston C. Revealed: tobacco giant’s secret new weapon in the age of smoking bans. The Age, (Melbourne, Australia) 2007:27 Jun. Available from: http://www.theage.com.au/news/national/tobacco-giants-secret-new-weapon/2007/06/26/1182623909034.html
41. Sauter E, Westgate S and Templemire J. Skin necrosis in cigarette smokers receiving partial breast irradiation: two case reports. Cases Journal 2008;1(1):230. Available from: http://www.casesjournal.com/content/pdf/1757-1626-1-230.pdf
42. Therapeutic Goods Administration. Electronic cigarettes. Canberra: TGA, Australian Government Department of Health and Ageing, 2011, [viewed 28 July 2011]. Available from: http://www.tga.gov.au/consumers/ecigarettes.htm
43. Freeman B. E-cigarettes aren’t a solution — they’re part of the problem. The Conversation, 2011:12 Apr. Available from: http://theconversation.edu.au/e-cigarettes-arent-a-solution-theyre-part-of-the-problem-423
44. Bullen C, McRobbie H, Thornley S, Glover M, Lin R and Laugesen M. Effect of an electronic nicotine delivery device (e cigarette) on desire to smoke and withdrawal, user preferences and nicotine delivery: randomised cross-over trial. Tobacco Control 2010;19(2):98-103. Available from: http://tobaccocontrol.bmj.com/content/19/2/98.abstract
45. Novotny TE, Hardin SN, Hovda LR, Novotny DJ, McLean MK and Khan S. Tobacco and cigarette butt consumption in humans and animals. Tobacco Control 2011;20(suppl. 1):i17-20. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i17.abstract
46. US Food and Drug Administration. Electronic cigarettes. Silver Spring, Maryland: US Department of Health & Human Services, 2011, [viewed 31 July 2011]. Available from: http://www.fda.gov/newsevents/publichealthfocus/ucm172906.htm
47. Vapers Forum. 2011, [viewed 31 July 2011]. Available from: http://www.vapersforum.com/
48. Noel JK, Rees VW and Connolly GN. Electronic cigarettes: a new ‘tobacco’ industry? Tobacco Control 2011;20(1):81. Available from: http://tobaccocontrol.bmj.com/content/20/1/81.short
49. Etter J-F, Bullen C, Flouris AD, Laugesen M and Eissenberg T. Electronic nicotine delivery systems: a research agenda. Tobacco Control 2011;20(3):243-8. Available from: http://tobaccocontrol.bmj.com/content/20/3/243.abstract
50. US Department of Health and Human Services. The health consequences of smoking: the changing cigarette: a report of the Surgeon General. Washington DC: US Department of Health and Human Services, Public Health Service, Office of Smoking and Health, 1981. Available from: http://profiles.nlm.nih.gov/NN/B/B/S/N/segments.html
51. Baker R. Smoke generation inside a burning cigarette: modifying combustion to develop cigarettes that may be less hazardous to health. Progress in Energy and Combustion Science 2006;32:373-85.
52. Boyd D. Platinum group metals in the potential limitation of tobacco related diseases. Platinum Metals Rev 2000;44:120-4.
53. Gray N. Reflections on the saga of tar content: why did we measure the wrong thing? Tobacco Control 2000;9(1):90-4. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/9/1/90.pdf
54. King W, Carter SM, Borland R, Chapman S and Gray N. The Australian tar derby: the origins and fate of a low tar harm reduction programme. Tobacco Control 2003;12(suppl.3):iii61-70. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/12/suppl_3/iii61
55. Shiffman S, Pillitteri JL, Burton SL and Di Marino ME. Smoker and ex-smoker reactions to cigarettes claiming reduced risk. Tobacco Control 2004;13(1):78-84. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/13/1/78.pdf
56. Kozlowski LT, Dreschel NA, Stellman SD, Wilkenfeld J, Weiss EB and Goldberg ME. An extremely compensatible cigarette by design: documentary evidence on industry awareness and reactions to the Barclay filter design cheating the tar testing system. Tobacco Control 2005;14(1):64-70. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/1/64
57. US Department of Health and Human Services. The health consequences of smoking. A report of the Surgeon General. Rockville, MD: US Department of Health and Human Services, Public Health Service, Office of the Surgeon General, 2004. Available from: http://www.surgeongeneral.gov/library/smokingconsequences/
58. World Health Organisation and Scientific Advisory Committee on Tobacco Regulation (SACTob). Statement of principles guiding the evaluation of new, or modified tobacco products. Geneva: WHO, 2003. Available from: http://www.who.int/tobacco/global_interaction/tobreg/brisbane_2002_modified/en/index.html
59. Liggett Vector Brands Inc. Company website. Mebane (NC): Vector Tobacco Inc, 2006, [viewed 20 May 2008]. Available from: http://www.liggettvectorbrands.com/
35Chapter 10: The tobacco industry in Australian society
Section: 10.7.12Date of last update: 26 March 2012
60. Caraballo RS, Pederson LL and Gupta N. New tobacco products: do smokers like them? Tobacco Control 2006;15(1):39-44. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/1/39
61. Vector Group Limited. Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2007. Washington DC: Securities and Exchange Commission, 2008, [viewed 20 May 2008]. Available from: http://www.sec.gov/Archives/edgar/data/59440/000095014408001553/g12033e10vk.htm
62. WHO Scientific Advisory Committee on Tobacco Regulation (SACTob). Statement of principles guiding the evaluation of new, or modified tobacco products. Geneva: World Health Organization, 2003. Available from: http://www.who.int/tobacco/global_interaction/tobreg/brisbane_2002_modified/en/index.html
63. WHO Study Group on Tobacco Product Regulation. Scientific Basis of Tobacco Product Regulation. WHO Technical Report Series, no. 945. Geneva: World Health Organizaton, 2007. Available from: http://www.who.int/tobacco/global_interaction/tobreg/tsr/en/index.html
64. WHO Study Group on Tobacco Product Regulation. Scientific Basis of Tobacco Product Regulation. WHO Technical Report Series, no. 951. Geneva: World Health Organization, 2008. Available from: http://www.who.int/tobacco/global_interaction/tobreg/publications/tsr_951/en/index.html
65. WHO Scientific Advisory Committee on Tobacco Products Regulation. Recommendation on smokeless tobacco products. Geneva: World Health Organization, 2002. Available from: http://www.who.int/tobacco/global_interaction/tobreg/brisbane_2002_smokeless/en/
66. Convenience & Impulse Retailing. RYO & cigar sales continue to defy the odds. Balmain, New South Wales: Berg Bennett, 2010, [viewed 15 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=544
67. Anon. Tobacco on the loose. Australian Convenience Store News 2005;Nov/Dec Available from: http://www.c-store.net.au/magazine/article_view.php?id=53
68. Anon. Rising to the challenge. Australian Convenience Store News. Mar/Apr 2007, [viewed 3 June 2008]. Available from: http://c-store.net.au/magazine/article_view.php?id=121
69. Calantzopoulos A. Remarks by Andre Calantzopoulos, Chief Executive Officer Philip Morris International Inc. JP Morgan Global Tobacco Conference, London, United Kingdom, June 29, 2007. Lausanne: Philip Morris International Inc, 2007, [viewed 12 February 2008]. Available from: http://www.altria.com/media/press_release/03_02_pr_2007_06_29_01.asp
70. McDaniel PA and Malone RE. ‘I always thought they were all pure tobacco’: American smokers’ perceptions of ‘natural’ cigarettes and tobacco industry advertising strategies. Tobacco Control 2007;16(6):e7. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/16/6/e7
71. Am Trading. Corporate website. Akwesasne, New York: Amtrading, 2008, [viewed 19 May 2008]. Available from: http://www.amtrading.us/main.html
72. Santa Fe Natural Tobacco Company. Corporate website. Winston-Salem, North Carolina: Reynolds American Inc, 2008, [viewed 15 May 2008]. Available from: http://www.nascigs.com/
73. Koch W. Eco-friendly cigarette ads make tobacco foes fume. USA Today, 2011:26 Jul. Available from: http://www.usatoday.com/money/advertising/2011-07-26-green-cigarette-ads_n.htm
74. The NSW Retail Tobacco Traders’ Association. Tobacco prices. Cigarettes. The Australian Retail Tobacconist 2007;67(Oct-Nov):3-8.
75. Convenience & Impulse Retailing. Recommended retail prices for tobacco products and accessories. 2010, [viewed 15 July 2011]. Available from: http://www.c-store.com.au/industry/tobacco-pricing.pdf
76. Slade J. The pack as advertisement. Tobacco Control 1997;6(3):169-70. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/6/3/169.pdf
77. Wakefield M, Morley C and Horan J. The cigarette pack as image: new evidence from tobacco industry documents. Tobacco Control 2002;11(suppl. 1):i73-80. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/suppl_1/i73.pdf
78. Scheffels J. A difference that makes a difference: young adult smokers’ accounts of cigarette brands and package design. Tobacco Control 2008;17:118-22. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18303087
79. Simpson D. Australia: BAT corporate social irresponsibility. Tobacco Control 2006;15(4):275. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/4/275
80. The NSW Retail Tobacco Traders’ Association. Dunhill My Mixture. The Australian Retail Tobacconist 2007;67(Oct-Nov):6-7.
81. Chapman S. Australia: British American Tobacco ‘addresses’ youth smoking. Tobacco Control 2007;16(1):2-a-3. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/16/1/2-a
82. Leistikow B, Martin D and Milano C. Fire injuries, disasters, and costs from cigarettes and cigarette lights: a global overview. Preventive Medicine 2000;31(2 Pt 1):91-9. Available from: http://www.ncbi.nlm.nih.gov/pubmed/10938207
83. Chapman S and Balmain A. Time to legislate for fire-safe cigarettes in Australia [Editorial]. Medical Journal of Australia 2004;181(6):292-3. Available from: http://www.mja.com.au/public/issues/181_06_200904/cha10373_fm.html
84. Collins D and Lapsley H. The costs of tobacco, alcohol and illicit drug abuse to Australian society in 2004-05. P3 2625. Canberra: Department of Health and Ageing, 2008. Available from: http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/publishing.nsf/Content/mono64/$File/mono64.pdf
85. Coalition for Fire-Safe Cigarettes. Coalition website. Quincy Massachusetts: National Fire Protection Association 2008, [viewed 4 June 2008]. Available from: http://www.firesafecigarettes.org/categoryList.asp?categoryID=9&URL=Home%20-%20The%20Coalition%20for%20Fire%20Safe%20Cigarettes
86. Chapman S. Where there’s smoke, there’s fire. Tobacco Control 1999;8(1):12-13. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/1/45.pdf
87. Laugesen M, Duncanson M, Fraser T, McClellan V, Linehan B and Shirley R. Hand rolling cigarette papers as the reference point for regulating cigarette fire safety. Tobacco Control 2003;12(4):406-10. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/4/406.pdf
88. Australian Competition and Consumer Commission Product Safety Policy Section. The regulation of reduced fire risk cigarettes under the Trade Practices Act 1974. Regulation impact statement June 2008. Canberra: ACCC, 2008, [viewed 18 August 2008]. Available from: http://www.accc.gov.au/content/item.phtml?itemId=807543&nodeId=aac0bdf39e1ba1d76a42e81eedf77ab1&fn=Reduced%20fire%20risk%20cigarettes%E2%80%94regulation%20impact%20statement%E2%80%94July%202008.doc
89. McGuire A. How the tobacco industry continues to keep the home fires burning. Tobacco Control 1999;8(1):67-9. Available from: http://tobaccocontrol.bmj.com/content/8/1.toc
90. Gunja M, Ferris Wayne G, Landman A, Connolly G and McGuire A. The case for fire safe cigarettes made through industry documents. Tobacco Control 2002;11(4):346–53. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/11/4/346
91. Connolly GN, Alpert HR, Rees V, Carpenter C, Wayne GF, Vallone D, et al. Effect of the New York State cigarette fire safety standard on ignition propensity, smoke constituents, and the consumer market. Tobacco Control 2005;14(5):321-7. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/5/321
92. Arnott D and Berteletti F. Europe: agreement on reducing cigarette fires. Tobacco Control 2008;17(1):4-5. Available from: http://tobaccocontrol.bmj.com/content/17/1.toc
36 Tobacco in Australia:Facts and Issues
Section: 10.7.12Date of last update: 26 March 2012
93. Standards Australia. Standard for reduced fire risk cigarettes released [Media release]. Sydney: Standards Australia, 9 March 2007, [viewed 30 May 2008]. Available from: http://www.standards.org.au/downloads/070307_Low_fire_risk_cigarettes_Standard_released.pdf
94. Scott D. Luxury cigarettes. Targetting cigarettes’ big spenders. Smokeshop Online.2002. Feb-Mar Available from: http://www.gosmokeshop.com/0202/cover.htm
95. Australian Convenience Store News. Tobacco on the loose. Balmain, New South Wales: Berg Bennett, 2005, [viewed 31 August 2008]. Available from: http://www.c-store.net.au/magazine/article_view.php?id=53
96. Convenience & Impulse Retailing. Break out the cigars. Balmain, New South Wales: Berg Bennett, 2009, [viewed 31 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=484
97. Convenience & Impulse Retailing. Nielsen convenience and impulse report. Macquarie Park, NSW: Nielsen, 2010, [viewed 1 July 2011]. Available from: http://www.c-store.com.au/industry/acn/Nielsen_Report_10.pdf
98. Convenience & Impulse Retailing. Brand matters - the importance of brand loyalty in the tobacco category. Australian Convenience Store News. Balmain, New South Wales: Berg Bennett, 2008, [viewed 31 August 2008]. Available from: http://c-store.net.au/magazine/view_article.php?id=169
99. Anon. New products key at Tobacco Plus Expo. Convenience Store News. New York: Nielsen Business Media Inc, 2008, [viewed 26 May 2008]. Available from: http://www.csnews.com/csn/cat_management/tobacco/article_display.jsp?vnu_content_id=1003795490
100. Convenience & Impulse Retailing. Endless challenge. Tobacco faces up to its biggest battle yet. 2010, [viewed 31 July 2011]. Available from: http://www.c-store.com.au/magazine/article.php?id=525
37Chapter 10: The tobacco industry in Australian society
Section: 10.8.2.1Date of last update: 26 March 2012
10.8
The tobacco growing industry10.8.1
GlobalTobacco is grown in more than 120 countries on almost four million hectares of the world’s agricultural land, consuming as much arable land as all the world’s orange groves or banana plantations. In 2007, four countries—China, Brazil, India and the US—produced two-thirds (67%) of the world’s tobacco leaf. China alone produced 40% of the world’s tobacco leaf in 2007. Global tobacco production has almost doubled since the 1960s, increasing 300% in low- and middle-resource countries while dropping more than 50% in high-resource countries. In 2006, world tobacco production was approximately seven million metric tons.1 See Table 10.8.1 for the top 10 tobacco growing countries.
Tobacco agriculture creates many environmental and public health problems.2,
3 Pesticide and fertiliser runoff contaminate water resources, and the curing of tobacco leaf with wood fuel leads to massive deforestation. Agricultural workers suffer from pesticide poisoning, green tobacco sickness,4 and lung damage from smoke and field dust.
The WHO Framework Convention on Tobacco Control (WHO FCTC) calls for financial and technical assistance for tobacco growers in countries heavily dependent on tobacco growing. Successful strategies will likely require a long-term approach aimed at building alliances with tobacco farmers and creating mechanisms for tobacco farmer investment in local infrastructure.5
10.8.2
Australia
10.8.2.1
Brief historyTobacco growing commenced during Australia’s early years of settlement. Governor Macquarie experimented with plantings at Emu Plains in New South Wales in 1818, and by the 1820s tobacco was cultivated by farmers in the Hunter Valley. During the 1850s growing extended to Victoria and Queensland. It is likely that some proportion of the early crop was intended to supply the colony with the makings of pesticide for use in ridding sheep of parasites.6 Growing reached its peak in the early 1970s, when nearly 16 000 tonnes of leaf were sold annually,7 but by 2006 the crop yielded under 4000 tonnes.8 Prior to deregulation of the market, most Australian leaf was purchased by local manufacturers.9
Major influences contributing to the downturn in local tobacco growing include declining tobacco consumption in the Australian population, and successive reductions in the protective tariff on Australian leaf during the 1990s, which permitted manufacturers to purchase leaf more cheaply on the international market (see below).9 This lead to an increase in diversion of Australian leaf into the illegal tobacco trade9 (see also Chapter 10, Section 10.9).
Commercial tobacco farming no longer occurs in Australia. The industry began to wind down during the mid-1990s, with successive announcements at state and federal level for government-financed restructuring grants (exit grants) to tobacco farmers to assist them in leaving the industry (see below).
Table 10.8.1 Leading producers of tobacco leaf, 2007
Country Metric tons of leafChina 2,395 000Brazil 919 393India 555 000USA 353 177Indonesia 180 000Argentina 170 000Pakistan 126 000Malawi 118 000Italy 100 000Turkey 98 000
Source: The Tobacco Atlas1
38 Tobacco in Australia:Facts and Issues
Section: 10.8.2.3Date of last update: 26 March 2012
10.8.2.2
Government regulationFederal government support for the Australian tobacco growing industry commenced in 1936, with the introduction of the Local Leaf Content Scheme, which encouraged the manufacturers to use at least a minimum percentage of locally grown leaf. Doing so entitled the manufacturers to a tariff concession on the balance of imported leaf they used.
Imbalances between supply and demand in the industry, as well as ongoing problems with grading and pricing of local leaf, lead to the passage of the Commonwealth Tobacco Marketing Act 1965. This legislation established the Australian Tobacco Board as a statutory authority of the Australian Government. The Australian Tobacco Board, which became known in 1990 as the Australian Tobacco Marketing Advisory Committee, advised federal and state ministers on interstate and overseas marketing of Australian tobacco leaf, as well as the various state tobacco leaf marketing boards (established under legislation in those states which grew tobacco) on the same matters. The Australian Tobacco Board (and later the Australian Tobacco Marketing Advisory Committee) was also responsible for the administration of the main instrument of regulation, the Tobacco Industry Stabilisation Plans. In brief, Tobacco Industry Stabilisation Plans and their key component, the Local Leaf Content Scheme, served to control supply and guarantee the sale of Australian leaf to local manufacturers at a pre-arranged price. The Tobacco Industry Stabilisation Plan introduced in 1965 raised the minimum local leaf content to 50% of Australian leaf in the manufacture of their products and in 1977 this requirement was increased to 57%.10
At a state level, each growing area had its own Tobacco Leaf Marketing Board, which was responsible for allocating supply quotas of tobacco to individual growers.10
10.8.2.3
The decline of tobacco farming in AustraliaDuring the 1980s and early 1990s a series of reviews evaluated the structure of the tobacco growing industry in Australia.11-13 In 1990, it was the view of the Industry Commission that, taking into consideration statutory marketing arrangements, tariff concessions and all other measures of government support, tobacco was by far the most subsidised agricultural activity in Australia, receiving assistance at around six and a half times the rate of other horticultural activities, and over 12 times the average rate for all agricultural activities.14
In 1994 the Industry Commission published a review of the tobacco growing industry in Australia, finding that the succession of Tobacco Industry Stabilisation Plans and Local Leaf Content Schemes had created an inefficient, non-competitive industry that was now on the brink of collapse. The commission recommended the phasing in of major deregulation of the leaf market to bring it into line with other Australian manufacturing and agricultural industries and to permit tobacco manufacturers to purchase leaf from overseas without penalty. Later that year, the Australian manufacturing industry and tobacco growers submitted a proposal for restructuring which was agreed to by the Commonwealth Government in December 1994.15 The package allowed for the winding down of the Australian Tobacco Marketing Advisory Committee and the abolition of the Local Leaf Content Scheme and Tobacco Industry Stabilisation Plans. Tariffs were to be removed from imported tobacco leaf and tobacco products. Manufacturers were to purchase local leaf under arrangements which conformed to the requirements of the Trade Practices Act 1974. In addition, the tobacco manufacturers agreed to provide $10.8 million to aid restructuring, payment to be matched by contributions from the Queensland, Victorian and New South Wales state governments.15
In 1994, the year in which the final Tobacco Industry Stabilisation Plan ran its course, there were about 600 tobacco growers remaining in Australia. Most of the crop (58%) was produced in northern Queensland, about 38% was grown in Victoria around Myrtleford, and 4% was grown around Ashford and Bonshaw in New South Wales.15 During 1994 and 1995 the Victorian, New South Wales and Queensland state governments announced financial incentives and other support for growers wishing to exit the market.15 By the end of 1995, only 366 tobacco growers remained, 240 in Queensland and 126 in Victoria.15.
39Chapter 10: The tobacco industry in Australian society
Section: 10.8.2.3Date of last update: 26 March 2012
As foreshadowed, the Australian Tobacco Marketing Advisory Committee was wound up in 1995,16 and ultimately abolished in April 1997, with the repeal of the Tobacco Marketing Act 1965,17and the organisation’s assets were transferred to the Tobacco Research and Development Corporation, a body intended to support the research needs of the industry.15 Over the following years the manufacturers increased volumes of cheaper imported tobacco leaf, and the Australian growing industry continued to fold, not without acrimony on the part of some of the remaining growers.18-20 The Tobacco Research and Development Corporation was abolished in 2003.21
The last sales contracts in Northern Queensland were filled in early 2004,22 and in Victoria and southern Queensland a majority of growers voted in support of a federal government and industry-funded buyout of the leaf growing industry announced in October 2006. All outstanding sales transactions were expected to be completed in 2009.23
Most leaf used in Australian-made cigarettes is now grown in the US, Brazil, Zimbabwe and India.24
40 Tobacco in Australia:Facts and Issues
Section: 10.8.2.3Date of last update: 26 March 2012
References1. American Cancer Society and World Lung Foundation. The Tobacco Atlas. Growing tobacco. Atlanta, Georgia: American Cancer Society, 2009, [viewed 1 June 2011]. Available from: http://
www.tobaccoatlas.org/companies.html
2. Arcury TA, Quandt SA, Preisser JS, Bernert JT, Norton D and Wang J. High levels of transdermal nicotine exposure produce green tobacco sickness in Latino farmworkers. Nicotine & Tobacco Research 2003;5(3):315-21. Available from: http://ntr.oxfordjournals.org/content/5/3/315.abstract
3. Campaign for Tobacco Free Kids. Golden leaf barren forest. The costs of tobacco farming. Washington: Campaign for Tobacco Free Kids, 2001, [viewed 1 August 2011]. Available from: http://www.ash.org.uk/files/documents/ASH_330.pdf
4. Ballard T, Ehlers J, Freund E, Auslander M, Brandt V and Halperin W. Green tobacco sickness: occupational nicotine poisoning in tobacco workers. Archives of Environmental Health 1995;50(5):384-9. Available from: http://www.ncbi.nlm.nih.gov/pubmed/7574894
5. Jones A, Austin W, Beach R and Altman D. Tobacco farmers and tobacco manufacturers: implications for tobacco control in tobacco-growing developing countries. Journal of Public Health Policy 2008;29(4):406–23. Available from: http://www.palgrave-journals.com/jphp/journal/v29/n4/full/jphp200837a.html
6. Department of Customs and Excise. Tobacco-Survey of progress of the Australian tobacco growing industry under the ‘percentage system’ of tariff protection. Canberra: Department of Customs and Excise, 1963.
7. Australian Tobacco Marketing Advisory Committee. Australian Tobacco Marketing Advisory Committee Annual Report 1992. Year ended 31 December 1992 regarding the operation of the Tobacco Marketing Act 1965. Canberra: Canberra Times Print, 1993.
8. Australian Bureau of Statistics. 7121.0 Agricultural commodities Australia 2005-06. Canberra: ABS, 2008. Available from: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/393F8CDF359889C1CA257401000D5E7C/$File/71210_2005-06.pdf
9. Australian National Audit Office. Administration of Tobacco Excise. Audit Report No. 55, 2001-2002, Performance Audit. Canberra: Commonwealth of Australia, 2002. Available from: http://www.anao.gov.au/uploads/documents/2001-02_Audit_Report_55.pdf
10. Industry Commission. The Tobacco Growing and Manufacturing Industries. Industry Commission Inquiry Report No. 39. Canberra: Australian Government Publishing Service, 1994. Available from: http://www.pc.gov.au/ic/inquiry/39tobacc
11. Industries Assistance Commission. Manufactured tobacco. Industries Assistance Commission Report No 256, 23 January 1981. Canberra: Australian Government Publishing Service, 1981.
12. Industries Assistance Commission. The tobacco growing and manufacturing industries. Industries Assistance Commission Report no 405, 24 September Canberra: Australian Government Publishing Service, 1987.
13. Queensland Department of Primary Industries in association with ACIL Australia Pty Ltd. Economic study of the Australian tobacco growing industry. Canberra: Australian Tobacco Marketing Advisory Committee, 1990.
14. Industry Commission. Annual Report 1989-1990. Canberra: Australian Government Publishing Service, 1991.
15. Australian Tobacco Marketing Advisory Committee. Australian Tobacco Marketing Advisory Committee Final Report. Year ended 31 December 1995 regarding the operation of the Tobacco Marketing Act 1965. Canberra: Canberra Times Fine Print, 1996.
16. House of Representatives. Official Hansard. Commonwealth of Australia Parliamentary Debates. Thursday 12 December 1996. Thirty-eighth Parliament. First session - second period. Canberra: Commonwealth of Australia, 1996. Available from: http://www.aph.gov.au/Hansard/reps/dailys/dr121296.pdf
17. Assistant Treasurer and Commonwealth of Australia. Tobacco charge (No. 1) (Rate of charge) Regulations (Amendment) 1997 No. 90. Explanatory Statement. Canberra: Commonwealth of Australia, 1997, [viewed. Available from: http://www.austlii.edu.au/au/legis/cth/num_reg_es/tc1ocr1997n90447.html
18. Jackson M. Client stubs tobacco men. Weekly Times, (Melbourne) 2000:7 Jun. 32
19. Gray S. One last quota of hope. p. 11. Cairns Post, (Cairns) 29 November 2003:
20. Anon. Last tobacco contract filled in Qld. Sydney: inFARMation (Infochoice), 2004, [viewed 3 January 2008]. Available from: http://www.infarmation.com.au/news/04/02/article9848.asp
21. Attorney-General’s Department. Tobacco Research and Development Corporation Repeal Regs 2003. FRLI No. 2004B00222. Canberra: Australian Government, 2003, [viewed. Available from: http://frli.law.gov.au/s97.vts?action=View&VdkVgwKey=2004B00222&Collection=FRLI&ViewTemplate=frliview.hts
22. Last tobacco contract filled in Qld. Sydney: inFARMation (Infochoice), 2004, [viewed 3 January 2008]. Available from: http://www.infarmation.com.au/news/04/02/article9848.asp
23. Price L. Federal government offers tobacco growers exit package. ABC Rural Victoria, (Sydbet) 2006:26 Oct. Available from: http://www.abc.net.au/rural/vic/content/2006/s1774133.htm
24. British American Tobacco. British American Tobacco Australia Company website. About us. Sydney: British American Tobacco, 2008, [viewed 20 January 2008]. Available from: http://www.bata.com.au/OneWeb/sites/BAT_53RF5W.nsf/vwPagesWebLive/80256AED003D81CC80256ABE00352B4F?opendocument&SID=&DTC=
41Chapter 10: The tobacco industry in Australian society
Section: 10.9.1Date of last update: 26 March 2012
10.9
The tobacco industry and the illegal tobacco market10.9.1
The emergence of chop-chop in AustraliaChop-chop is finely cut, unbranded, ‘black market’ tobacco that has been grown, distributed and sold outside the government-regulated and taxed system.1 Due to its affordability, some smokers have adopted chop-chop as an alternative to, or in addition to, smoking manufactured tobacco.2-4
Several factors combined to accelerate the growth of the black market in home-grown tobacco in the late 1990s.1 The dismantling of the Tobacco Industry Stabilisation Plans after 1995 allowed Australian tobacco manufacturers to source tobacco leaf from the international market, putting downward pressure on the price of Australian leaf and leading to problems with oversupply. The abolition of individual state business franchise fees (state-levied tobacco taxes) in 1997, the change from charging federal excise on a weight basis to a per cigarette basis in 1999, and the introduction of the federal goods and services tax in 2000i lead to a uniform tax regime on tobacco throughout Australia and a significant increase in excise collections from tobacco. Obtaining tobacco illicitly, avoiding the tax and providing the product to the end user at a discount was highly profitable activity.1
Chop-chop typically entered the market via individuals or groups that purchased leaf directly from a tobacco grower, processed it for sale, and provided it to a range of retailers (such as tobacconists, market stallholders, hairdressers, newsagents and milk bars) for on-selling. The product was usually sold in half or one kilogram lots, packed into clear plastic bags in loose leaf form, but has also been found converted into readymade cigarettes and presented in counterfeit tobacco packaging.1 According to a news report just prior to the closure of the Victorian tobacco growing industry, tobacco farmers could earn up to $10 000 per bale of tobacco on the illicit market, compared to a top price of $800 the same bale would fetch on the legal market; the same bale would yield $30 000 in excise for the Federal Government.5 Bypassing the government, tobacco companies and retailers also meant considerable savings for the end user, who could purchase 100 g of illegal tobacco for about $13, compared to a recommended retail price for the equivalent legal product of about $36.6 In 2005, tobacco excise accounted for about 55% of the final retail price of a cigarette, and goods and services tax a further 10%.6
In a report for the Australian Taxation Office in 2006,6 the Australian National Audit Office (ANAO)ii stated that illegal tobacco operations were a key priority in the area of evasion and serious fraud. The ANAO estimated that in 2004‒2005, almost 10% of legally grown tobacco was diverted into the black market, and of this, only around 6% was intercepted.6 In an earlier report, the ANAO estimated that ‘tobacco excise revenue leakage’ due to the illegal tobacco market in 2001 was likely to range from $99 million‒$220 million annually.1 Tobacco smuggling has also been associated with other serious criminal activity. On the basis of Australian Taxation Office research, the ANAO observed that the organisers were ‘actively involved in other forms of criminality such as drugs, money laundering, identity fraud and car rebirthing as well as tobacco smuggling’ (p15).6 Illegal trading resulted in the murder of a Victorian tobacco grower in 2002.7
The end of the legal tobacco farming industry in Australia is discussed in Chapter 10, Section 10.8.2.3. For further information on the prevalence of the use of chop-chop in Australia, refer to Chapter 1, Section 11.2. The health consequences of smoking chop-chop are discussed in Chapter 3, Section 27.2.
i For detailed discussion of these changes to tobacco taxation, refer to Chapter 13.ii The Australian National Audit Office provides financial auditing services to the Parliament and Commonwealth public sector agencies and statutory bodies. See http://www.anao.gov.au/
index.cfm
42 Tobacco in Australia:Facts and Issues
Section: 10.9.2Date of last update: 26 March 2012
10.9.2
The size of the illicit tobacco market in Australia in 2010This section is drawn from a report prepared by Quit Victoria and Cancer Council Victoria.8
On 1 March 2011, British American Tobacco Australia released a report9 prepared by Deloitte, which purported to quantify growth in the illicit tobacco market in Australia.10 Deloitte claimed that the size of the illicit tobacco market in Australia is 15.9%, a figure widely quoted by tobacco companies and since included in A4+ sized newspaper advertisements aiming to discourage members of the Australian Parliament from supporting legislation to mandate plain packaging.
Methodological problems and a number of what look very much like errors of interpretation of the results of a Roy Morgan survey that provided the data for this report have resulted in a major overestimate of the extent of illicit trade in Australia.
The Australian Government’s National Drug Strategy Household Survey has also examined use of illicit tobacco in Australia in its surveys conducted in 2001, 2004, 2007 and 2010, and provides a more reliable indication of the extent of use. This survey had a sample size of more than 26 000 respondents in 201011 compared with the 949 respondents for the Roy Morgan survey commissioned by British American Tobacco Australia.
Some people expected that use of unbranded tobacco may have increased between 2007 and 2010, following the increase in excise and customs duty that resulted in large increases in tobacco prices in April 2010. However the National Drug Strategy Household Survey reports published in 2004, 2007 and 2010 have indicated very low and stable levels of use across the past nine years. In 2010 only 0.3% of Australians used illicit tobacco products on a regular basis (half the time or more), not significantly higher than the 0.2% reported in 2007 and also not significantly different from the 0.4% in 2004. While quite a large percentage of smokers have tried unbranded tobacco at least once (about 24% in 2010), 80% of those who have tried it no longer use it. About 4.9% of smokers report currently using unbranded tobacco in 2010, significantly lower than the 6.1% in 2007. This is substantially lower than the 15.7% of smokers deemed by Deloitte to be currently using unbranded tobacco.
Apart from over-estimating the number of smokers currently using unbranded tobacco, the British American Tobacco Australia sponsored report on illicit tobacco in 201010 also substantially over-estimates the amount that such smokers could be purchasing. The report estimates that those using unbranded tobacco purchased an average of 344 g on an average of 15 occasions each year, making a total of 5160 g per year. Given that cigarettes weigh less than 1 g each, this quantity would be sufficient to make and smoke between 16 and 20 cigarettes per day. And yet the National Drug Strategy Household Survey reports make it clear that most smokers who use unbranded tobacco use it only occasionally. The 2010 survey reported that only 1.5% of smokers used unbranded tobacco half the time or more. It appears that Deloitte may have misinterpreted the results of the Roy Morgan survey, assuming that all the respondents who indicated that they currently smoked unbranded tobacco products in the last year still smoked them currently, and/or that those who still smoked them almost exclusively.
Estimates of use of other forms of illicit tobacco such as contraband or counterfeit cigarettes included in the Deloitte report could only be speculative, given that many people would not know whether what they were purchasing was counterfeit or not. Low price may not be an indication of contraband stock, given that some brands are substantially cheaper than others and because tax-paid cigarettes can be subject to heavy discounting.
The National Drug Strategy Household Survey shows definitively that the vast majority of smokers who have ever used illicit tobacco no longer use it, and—of those who do still use it—most used it only occasionally. Data about the generally low frequency of use among current users suggests that the size of the illicit market in Australia in 2010 would be about 2–3% of all tobacco used, orders of magnitude smaller than the 15.9% widely touted by the tobacco industry.
43Chapter 10: The tobacco industry in Australian society
Section: 10.9.3Date of last update: 26 March 2012
10.9.3
Is smuggling advantageous to the international tobacco industry?The illicit tobacco trade markedly decreases the public health benefits of tobacco control action ‘by making cigarettes cheaper, more accessible and more difficult to regulate’.12 Most illicit trade in tobacco involves large-scale movement of products through channels that circumvent taxation. (Counterfeiting and bootlegging account for a much smaller proportion of the illegal market.)13 While counterfeiting can be a serious threat to profitability for tobacco companies, as it is for many manufacturers, smuggling of tobacco products is not always detrimental to tobacco companies at the international level. Instances have been documented where the tobacco companies have sold their products to distributors in the usual way, with the usual profits. Tobacco products then leak from distributors into the illegal market where, having evaded tax, it is sold more cheaply than taxed goods. The only real losers, financially, are the governments, which miss out on tax revenue.14 The key to controlling smuggling is controlling the supply chain and this supply chain is controlled to a great extent by the tobacco industry itself.15
Publicly the tobacco companies have claimed to have no knowledge or involvement in smuggling activities, but internal industry documents reveal that there are numerous instances where they have been complicit in these activities. Smuggling benefits the international tobacco industry in a number of ways, including by:13, 16, 17
< allowing brands to infiltrate otherwise closed markets < providing leverage for the tobacco industry to argue that closed markets be opened (because closed markets don’t work)
< providing a source of cheap cigarettes to fuel uptake and consumption, particularly among younger populations and in poorer regions
< enabling the industry to lobby against tobacco control measures, especially increased taxation, by arguing that such measures increase smuggling.
Due to the size and scope of the international smuggling market, at its second session in July 2007 the WHO Framework Convention on Tobacco Control (WHO FCTC) Conference of the Parties decided to establish an Intergovernmental Negotiating Body, open to all Parties, to draft and negotiate a protocol on illicit trade in tobacco products.i The protocol will build upon and complement the existing smuggling provisions outlined in Article 15 of the WHO FCTC. The Conference of the Parties reviewed the progress it had made at its fourth session in Uruguay in 2010. The Conference decided that negotiations on a protocol should continue at a final session of the Intergovernmental Negotiating Body to be held in 2012, and that an informal working group, composed of representatives of regional groups of Parties, will work in 2011 to facilitate negotiations at the final session of the Intergovernmental Negotiating Body.18
i The reports and progress of the Intergovernmental Negotiating Body can be read here: http://www.who.int/fctc/protocol/illicit_trade/en/
44 Tobacco in Australia:Facts and Issues
Section: 10.9.3Date of last update: 26 March 2012
References1. Auditor-General. Administration of tobacco excise. Audit report no. 55, 2001-02 Performance Audit. Canberra: Australian National Audit Office, Commonwealth of Australia, 2002.
Available from: http://www.anao.gov.au/uploads/documents/2001-02_Audit_Report_55.pdf
2. Lindorff K. Tobacco – time for action. National Aboriginal and Torres Strait Islander Tobacco Control Project. Final report. Canberra: National Aboriginal Community Controlled Health Organisation, 2002. Available from: http://www.weftweb.net/naccho/Files/NACCHO_Tobacco_report.pdf
3. Bittoun R. The medical consequences of smoking ‘chop chop’ tobacco. Report prepared for the Commonwealth Department of Health and Ageing. Canberra: Department of Health and Ageing, 2004. Available from: http://www.health.gov.au/internet/wcms/publishing.nsf/Content/phd-pub-tobacco-chopchop-cnt.htm/$FILE/chopchop.pdf
4. Bittoun R. ‘Chop chop’ tobacco smoking [Letter] Medical Journal of Australia 2002;177(11):686-7. Available from: http://www.mja.com.au/public/issues/177_11_021202/bittoun_021202.pdf
5. Edwards L. Quitting time. The Age (Melbourne) 5 October 2006:
6. Auditor-General. Administration of petroleum and tobacco excise collections: follow-up audit. Audit report no. 33, 2005-06 Performance audit. Canberra: Australian National Audit Office, Commonwealth of Australia, 2006. Available from: http://www.anao.gov.au/uploads/documents/2005-06_Audit_Report_33.pdf
7. Topsfield J. Two again found guilty of murder. The Age, (Melbourne) 5 June 2004: Available from: http://www.theage.com.au/articles/2004/06/04/1086203623885.html
8. Quit Victoria and Cancer Council Victoria. Illicit trade of tobacco in Australia. A critique of a report prepared by Deloitte for British American Tobacco Australia Limited, Philip Morris Limited and Imperial Tobacco Australia Limited. Melbourne, Australia: Cancer Council Victoria, 2011. Available from: http://www.cancervic.org.au/downloads/mini_sites/Plain-facts/CommtsDeloitte12.8.11_FINAL.pdf
9. British American Tobacco Australia. Taxpayers lose $1 billion while criminals make millions [Media release]. Maroubra, New South Wales: 1 March 2011 [viewed 1 August 2011]. Available from: http://www.bata.com.au/group/sites/bat_7wykg8.nsf/vwPagesWebLive/DO7WZEX6/$FILE/medMD8EHAKD.pdf?openelement
10. Deloitte. Illicit trade of tobacco in Australia. Prepared for British American Tobacco Australia Limited, Philip Morris Limited and Imperial Tobacco Australia Limited. Sydney: British American Tobacco Australia, 2011. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WZEX6?opendocument&SKN=1
11. Australian Institute of Health and Welfare. 2010 National Drug Strategy Household Survey: survey report. Drug statistics series no. 25, AIHW cat. no. PHE 145. Canberra: AIHW, 2011. Available from: http://www.aihw.gov.au/publication-detail/?id=32212254712&libID=32212254712&tab=2
12. WHO Framework Convention on Tobacco Control. Geneva: World Health Organization, 2003. Available from: http://fctc.org
13. Lee K and Collin J. ‘Key to the future’: British American Tobacco and cigarette smuggling in China. PLoS Medicine 2006;3(7):e228. Available from: http://medicine.plosjournals.org/archive/1549-1676/3/7/pdf/10.1371_journal.pmed.0030228-S.pdf
14. Joossens L and Raw M. Turning off the tap: the real solution to cigarette smuggling. International Journal of Tuberculosis and Lung Disease 2003;7:214-22. Available from: http://www.ncbi.nlm.nih.gov/pubmed/12661834
15. Joossens L and Raw M. Progress in combating cigarette smuggling: controlling the supply chain. Tobacco Control 2008;17(6):399.
16. Joossens L and Raw M. Cigarette smuggling in Europe: who really benefits? Tobacco Control 1998;7(1):66-71. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/7/1/66
17. Collin J, LeGresley E, MacKenzie R, Lawrence S and Lee K. Complicity in contraband: British American Tobacco and cigarette smuggling in Asia. Tobacco Control 2004;13(suppl. 2):ii104-11. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/13/suppl_2/ii104
18. WHO Framework Convention on Tobacco Control Conference of the Parties. Intergovernmental Negotiating Body on a Protocol on Illicit Trade in Tobacco Products. Geneva: World Health Organization, 2011, [viewed 17 August 2011]. Available from: http://www.who.int/fctc/protocol/illicit_trade/en/
45Chapter 10: The tobacco industry in Australian society
Section: 10.10Date of last update: 26 March 2012
10.10
The tobacco industry exposed: tobacco industry document repositoriesThe preceding sections detail the size, scope and other publicly available vital statistics for the tobacco industry in Australia. The following sections of Chapter 10 examine the way in which the tobacco industry operates in Australia and elsewhere, including its interaction with governments, non-government organisations, commercial enterprises, industry groups, the media and the public.
During the 1990s millions of pages of internal tobacco industry documents were made public, mostly as an outcome of litigation against the industry. The first tranche of internal documents, originating from the US firm Brown & Williamson and its parent company, British American Tobacco, was delivered unsolicited to Stanton Glantz, a professor of public health at the University of California (San Francisco). Further documentation was obtained from Brown & Williamson by US Congress, and more came from the private papers of a deceased British American Tobacco employee.1
Further documents flooded into the public arena as a result of document discovery associated with tobacco litigation cases such as Cipillone v. Liggett Group.2 As part of the settlement in 1997 between the State of Minnesota and Blue Cross/Blue Shield against several tobacco companies (in which the states sued to recover the costs of treating tobacco-related disease), the companies were obliged to release several million pages of internal documents and make them available for public viewing. These documents are stored in the Minnesota Tobacco Document Depository, opened in 1998, and in the Guildford Document Depository in the UK. The Master Settlement Agreement of 1998 between 46 US states and Brown & Williamson, British American Tobacco, Lorillard, Philip Morris, RJ Reynolds, the Council for Tobacco Research and the Tobacco Institute led to the discovery of further industry documents.2 Subsequent US-based litigation has made yet more document collections available.3 Two major gateway sites to industry documents are the Legacy Tobacco Documents Library hosted by the University of California and the industry-run tobaccoarchives.com.i However repositories may be accessed through a number of different websites including those operated by individual tobacco companies.3
These previously confidential industry documents have allowed scrutiny of the tobacco industry’s priorities, policies and activities. Marketing practices have been exposed, including information on targeting young smokers. Lobbying strategies to further the industry’s interests have been uncovered. The documents also prove that the industry has long known about the health effects of smoking, the danger of secondhand smoke and the addictiveness of nicotine.2
A variety of tobacco industry activities in Australia have come to light through investigation of documents released as a result of the Master Settlement Agreement. These have been analysed by Simon Chapman and colleagues at the School of Public Health in the University of Sydney, with grants from the National Health and Medical Research Council and the US National Institutes of Health. Chapman et al have undertaken the research with the dual intentions of revealing industry strategies and behaviours that may assist tobacco control advocacy elsewhere, and collating material on the industry’s conduct in Australia, with a view to providing documentation in support of prospective litigants.ii4
While offering a wellspring of potentially useful information, it has been observed that accessing the documents—whether in hard copy or online—may be far from straightforward.3 Further, since the companies pursued policies of document concealment or destruction in anticipation of legal discovery, the repositories do not contain complete industry records.4, 5 However the documents have provided rare and compelling insights into tobacco industry behaviour, and much of the published research cited in the following sections of this chapter draws on these sources.
i See: www.legacy.library.ucsf.edu and http://www.tobaccoarchives.com/default.htmlii A series of publications reporting on industry documents pertaining to Australia appears in Tobacco Control 2003:12 (suppl. 3). Industry documents identified by Chapman et al that relate
to Australia are available on the Tobacco Control Supersite at http://old.tobacco.health.usyd.edu.au/site/gateway/docs/
46 Tobacco in Australia:Facts and Issues
Section: 10.10Date of last update: 26 March 2012
References1. Glantz S, Slade J, Bero L, Hanauer P and Barnes D. The Cigarette Papers. Berkeley: University of California Press, 1996.
2. Bero L. Implications of the tobacco industry documents for public health and policy. Annual Review of Public Health 2003;24(Nov 6):267-88. Available from: http://www.ncbi.nlm.nih.gov/pubmed/12415145
3. Malone R and Balbach ED. Tobacco industry documents: treasure trove or quagmire? Tobacco Control 2000;9(3):334-8. Available from: http://tobaccocontrol.bmj.com/cgi/content/extract/9/3/334
4. Chapman S, Byrne F and Carter SM. ‘Australia is one of the darkest markets in the world’: the global importance of Australian tobacco control. Tobacco Control 2003;12(suppl. 3):iii1-3. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/suppl_3/iii1
5. McDaniel PA, Smith EA and Malone RE. Philip Morris’s Project Sunrise: weakening tobacco control by working with it. Tobacco Control 2006;15(3):215–23. Available from: http://tc.bmjjournals.com/cgi/content/abstract/15/3/215
47Chapter 10: The tobacco industry in Australian society
Section: 10.11Date of last update: 26 March 2012
10.11
Corporate responsibility and the birth of good corporate citizenshipThe document disclosure discussed in the preceding section (Chapter 10, Section 10.9) brought the tobacco industry collectively to a point where it could no longer deny that its products were harmful. The seismic effects of the document revelations, along with continued pressure for product regulation, legislation and restrictions on smoking, required the companies to construct and promote a new image to ensure investor confidence. With masterly if cynical recalibration, the companies began to acknowledge publicly that tobacco could be harmful, to reiterate that smoking was an ‘adult choice’ and to argue that tobacco should be ‘sensibly’ regulated.
The tobacco industry’s public attempts at rebirth have coincided with a much broader move in the corporate world towards ‘corporate social responsibility’ (CSR), in which transnational corporations have begun to consider their impact on communities and the environment, and where necessary to change business practices and make restitution.1 Notions of what constitutes corporate social responsibility vary widely, and the extent to which the adoption of corporate social responsibility concepts by transnational corporations is more public relations than a true blossoming of corporate social conscience is a matter of ongoing debate.1
The websites of Philip Morris Internationali, British American Tobacco Australiaii and Imperial Tobacco Groupiii devote many pages to detailing company adherence to corporate social responsibility policies. British American Tobacco Australia has not produced a publicly available social report since 2007, but does publish an annual ‘sustainability report’ for the overall company on the British American Tobacco parent website.2 British American Tobacco Australia states on its website that ‘our CSR performance is monitored by the British American Tobacco Australasia Audit and CSR Committee and members of the Management Board of British American Tobacco Australasia’.3 Philip Morris International’s website explains that it reminds people that smoking is dangerous, that it does what it can to keep cigarettes away from children, and that it is working to develop less harmful products (Philip Morris USA even sponsors its own extensive quit smoking websiteiv). On a wider scale, it pledges to care for its employees, the environment and farming practices.4 Imperial Tobacco Group incorporates corporate responsibility highlights as part of its annual report and states that it is ‘committed to operating in a way that is financially, socially and environmentally responsible. This underpins our growth strategy and is an integral part of how we do business. We believe that this focus and commitment not only helps us to build trust and protect our licence to operate, but also drives long-term sustainable sales growth’.5
For the tobacco industry, adherence to corporate social responsibility depends on their being able to point to the legality of their products, and that smoking is an ‘adult lifestyle choice’ made by informed individuals. In their case study of corporate social responsibility initiatives adopted by the tobacco industry,6 Palazzo and Richter note that ‘tobacco companies are not in the CSR business as it is becoming commonplace now across various industries and throughout academic research. As long as cigarettes kill active and passive users, all that a tobacco company can achieve is a reputation for transactional integrity.v When tobacco companies try to link their activities to the common good, they indeed provoke the legitimate question whether tobacco and CSR are inherently contradictory’ (p398).6
Philip Morris International’s transition towards corporate social responsibility from about the mid-1990s has been documented by Hirschhorn.1 Philip Morris management decided to frame the company as an honest and ethical business, predicated on the fact that they produce legal products for use by informed adults. As part of this strategy, the company undertook (and publicised) its social and environmental good works, pledged to operate more openly
i See tobacco regulation: http://www.pmi.com/eng/tobacco_regulation/pages/tobacco_regulation.aspxii See operating responsibly: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WYKSQ?opendocument&SKN=1iii See corporate responsibility: http://www.imperial-tobacco.com/index.asp?page=5iv See: http://www2.pmusa.com/en/quitassist/index.aspv Transactional integrity refers to whether the company in question adheres to the legal and moral framework of the society within which it operates, such as by acting transparently,
keeping its promises, and behaving fairly and with consistency. The authors of this paper observe that many would contend that the tobacco industry does not currently fulfill even this more limited (‘transactional’) definition of corporate social responsibility.
48 Tobacco in Australia:Facts and Issues
Section: 10.11Date of last update: 26 March 2012
and voiced support for reasonable regulation, as well as adopting a consistent approach globally to matters such as marketing, trade, labour and the environment.
The evolving language used to express Philip Morris’s views on tobacco, health and addictiveness has been analysed.7 While Philip Morris’s website appears to endorse mainstream medical views on tobacco, its language is non-committal and visitors are referred to external public health websites (see also Chapter 10, Section 10.12). Friedman observes that Philip Morris’s motivations are primarily in the interests of deflecting litigation and that the company is conceding nothing, while appearing to have changed its ways a view backed up by internal Philip Morris documents.7. It has also been noted that the emphasis on the individual’s choice to smoke and offering links to further information is framed to absolve the industry and shift responsibility to the smoker.8
Can a tobacco company truly claim to operate within a framework of corporate social responsibility? According to Hirschhorn, the indisputable facts that:1
< tobacco has a devastating effect on the health of its users, as well as a subset of non-users who are exposed to it < tobacco is addictive, and the industry knows this < numerous studies show that most smokers would like to quit < mentally ill smokers consume a large proportion of the tobacco used in the US
fundamentally preclude the tobacco industry from qualifying as a socially responsible corporation. Added to this, most smokers become addicted before they have the opportunity to exercise adult choice.8 How, then, could a tobacco company reasonably earn corporate social responsibility credentials? One experienced tobacco control advocate has come up with a number of suggestions (summarised below) but concludes that the industry would be unlikely to consider this agenda viable:8
stop all forms of tobacco advertising and promotion
support substantial price rises for tobacco products
support youth tobacco prevention programs by increasing funding and placing them in the hands of an independent non-profit organisation
< stop interfering with provisions to protect non-smokers from secondhand smoke < halt all forms of political donations < provide generous financial support to non-profit organisations supporting quitting, including funding pharmaceutical cessation aids for low income smokers
< fund an independent, national tobacco and nicotine research foundation < adopt generic packaging with large graphic health warnings < comply with regulation of marketing, manufacturing and sales according to best practice (mandated by government)
< support effective development of regulation of all nicotine and tobacco products < abandon aggressive tactics for growth in less developed countries < stop obstructing ratification of the WHO Framework Convention on Tobacco Control.
In direct contrast to the above summary, the Philip Morris International website summarises what it defines as comprehensive tobacco control and the measures it is willing to support9:
< mandated health warnings on packs and in advertising < limitations on tobacco advertising, including bans on television and radio ads < public place smoking restrictions, including bans on smoking in places where people must go and places catering to minors
< minimum age laws < product regulations, including ingredient and smoke emissions reporting requirements < strict penalties for selling contraband or counterfeit cigarettes < tobacco tax policies that are integrated with health policies < regulations governing products that have potential to reduce risk.
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It also specifically names measures that it opposes, such as generic packaging, point-of-sale display bans, total bans on communications to adult consumers, and bans on the use of all additives in tobacco products.9
10.11.1
Corporate makeover: Philip Morris and Altria—a case study in briefOf all the international tobacco companies seeking to redefine themselves, Philip Morris has gone to greatest lengths. Beginning in 1999, Philip Morris sought to become ‘societally aligned’ by identifying the public expectations of a responsible tobacco company through opinion research and developing and publicising programs to meet those expectations. Despite Philip Morris’s claims, however, societal alignment in practice was highly selective. Examples of alignment strategies included voluntary programs, corporate advertising and industry-created youth smoking prevention programs, philanthropy, sponsorships, and support for weak tobacco control policies. Philip Morris retooled existing positions and programs, while entirely ignoring other areas that might have interfered with its business goals.10
In January 2003 Philip Morris Companies, then parent company to Philip Morris International, Philip Morris (USA) and Kraft Foods,i changed its name to ‘Altria’. According to the company’s website,11 the word Altria is derived from the Latin word ‘altus’, and conveys the notion of ‘reaching ever higher’. It was also intended to clarify its identity as a parent company to both tobacco and food companies.11
Various commentators have interpreted the name change as a public relations gesture, aimed at distancing the parent company and its non-tobacco subsidiaries from the stigma of association with tobacco manufacturing, and intended to re-position it in the minds of consumers, employees and investors.12, 13 This view has been confirmed by internal company documents dating back to the late 1980s, which detail concern for the company’s failing corporate image, and the evolution of plans for its resuscitation, culminating in eventual name change.14
The corporate structure of Altria has continued to evolve. In March 2008, Altria spun off Philip Morris International to make it a stand-alone company based in Switzerland. While Altria justified the initiative as motivated by a desire to ‘improve focus on the different market dynamics, competitive frameworks, challenges and opportunities that Altria and PMI face’,15 other commentators observe that cordoning off Philip Morris International will make the new entity less vulnerable to US regulators, legislators and litigants, and will reduce public relations pressure on Altria, which will continue to manage Philip Morris’s US operations.16 US ownership of Philip Morris International restricted its opportunities for global growth. With the approach of the split between the companies, a host of innovative product developments, which might have been expected to receive strong opposition in the US, were announced for introduction to Philip Morris International’s overseas markets.16 Altria retains ownership of Philip Morris (USA), the cigar-manufacturing concern John Middleton Co, a finance and investment company and a 29% shareholding in SAB Miller, the second largest brewing company in the world.11
Enacted in 2009, Philip Morris was the only tobacco company to support the US Family Smoking Prevention and Tobacco Control Act, which gives limited powers to the US Food and Drugs Administration to regulate tobacco products. There is concern among US tobacco control stakeholders that the effectiveness with which the Food and Drugs Administration will be able to regulate tobacco products remains in doubt and that the law offers the tobacco industry an opportunity to rehabilitate its image and products because they are now ‘FDA regulated’.17
10.11.2
Corporate links with charities and social causesCorporate sponsorship of sporting and cultural events was an important and highly effective vehicle for tobacco advertising in Australia before it was banned by a number of states during the late 1980s and finally by
i Kraft Foods, like Philip Morris International, now operates separately from Altria and Philip Morris (USA).
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Section: 10.11.2Date of last update: 26 March 2012
Commonwealth (national) legislation in 1992.i As well as enhancing corporate image, sponsorship provided endless hours of visual and verbal brand exposure, linked cigarette brands with positive imagery and iconic events, bought considerable support for the industry when it needed friends, and effectively gagged potential anti-smoking advocates (such as sportsmen and women whose sport benefited from tobacco funds).
Termination of these sponsorships caused Australian tobacco companies to look elsewhere for ways in which to promote themselves. The advent of an agenda in corporate responsibility has lead to a focus on charities and groups with impeccable credentials, including aid for sick children, combating domestic violence and environmental stewardship.
During 1999, Philip Morris Australia claimed credit in publicity material for supporting a number of charities in Australia, including Jeans for Genes Day, Red Nose Day,ii the Lions Club and Ronald McDonald children’s charities. None of these charities had knowingly accepted funding from Philip Morris, since the money had either been received via a corporate entity related to Philip Morris Australia at the time (for example, Kraftiii—which owns Vegemite and other iconic food brands) or because donations had been made through employees of Philip Morris Australia apparently acting on their own behalf, rather than at the behest of the company. The revelation that donations could be attributable to a tobacco company caused consternation among the beneficiaries.18
In February of 2003, Philip Morris Australia co-sponsored a high-profile conference on domestic violence. The conference, Breaking Point: a Corporate Conference on Work and Family Conflict, was organised by the Australian Government’s Office for the Status of Women.19,20 Along with Senator Amanda Vanstone, the then Minister for Family and Community Services, Philip Morris representatives from Australia and the US spoke at the event.21 The Office for the Status of Women was strongly criticised by representatives of the Australian Medical Association,19,20 the Federal Opposition20 and the public health sector21 on the grounds that tobacco is a major killer of women, and that acceptance of tobacco sponsorship detracted from the importance of the issue of domestic violence, while enhancing the corporate image of Philip Morris Australia.
Subsequent efforts by Philip Morris Australia to promote itself through corporate social responsibility in Australia were not so successful. At a conference in 2004 a company representative was scheduled to deliver an address on public relations and corporate communications. After being made aware of Philip Morris Australia involvement, other speakers threatened to withdraw, and the conference organisers removed Philip Morris Australia from the program.22 The following year, an attempt by British American Tobacco Australia to be associated with a conference on corporate social responsibility precipitated the exodus of other companies, including McDonalds, Pfizer and the mental health group Beyond Blue.23 In the international arena, at least one similar ‘ethical’ event has been shunned by non-tobacco companies once tobacco industry involvement has been exposed.22
Nevertheless British American Tobacco Australia appears to have had some success in forging connections with several ‘charity partners’ through the Our Workplace Giving Programme. The names of these organisationsiv appear on the British American Tobacco Australia website.24 Employees may choose to make donations to British American Tobacco Australia’s charity scheme, and British American Tobacco Australia pledges to match donations dollar-for-dollar. One of the charities to receive British American Tobacco Australia support is the Guide Dogs Australia, which provides services to the blind. Noting the well-established connection between smoking and blindness,v one commentator has described this as an especially cynically calculated partnership.25 As part of its corporate responsibility strategy for the environment, British American Tobacco Australia also supports the Butt Littering Trust (see Chapter 10, Section 10.17).
On its international website, Philip Morris International pledges support for five defined areas: ‘hunger and extreme poverty; education; rural living conditions; disaster relief and domestic violence’.vi In 2010, Philip Morris International donated to two Australian charities including US$24 564 to Aussie Helpers Limited for equipment
i Exceptions were made for some events. See Chapter 11 for further information.ii Interestingly, funds raised by Red Nose Day support counselling services, research and education into sudden infant death syndrome. See: http://www.rednoseday.com.au/. Exposure to
cigarette smoke, before and after birth, is a cause of SIDS. See Chapter 3, Section 8.2.iii Kraft is now an independent publicly held company.iv The following organisations are listed: Mission Australia, Conservation Volunteers Australia, The Surf Life Saver Rescue Helicopter, Lifeline, Northcott, Guide Dogs NSW/ACT, Barnardos and
ACT for Kidsv Smoking is a cause of cataract and is a major risk factor for developing age-related macular degeneration, both of which may result in blindness. See Chapter 3, Section 10.vi See: http://www.pmi.com/eng/about_us/charitable_giving/pages/charitable_giving.aspx
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Section: 10.11.2Date of last update: 26 March 2012
and funding infrastructure improvements for a non-profit farming enterprise and US$19 936 to Habitat for Humanity Australia project to construct three houses for needy families in South Australia.26 Philip Morris International donated a total of US$25 025,392 globally in 2010.
Imperial Tobacco makes no other specific mention of its activities in Australia, but states a preference for supporting charities or not-for-profit organisations in which its employees are actively involved and matching funds raised by employee activities.27
Corporate philanthropy is unapologetically connected with corporate advertising in the US. There, Philip Morris has run television advertising campaigns informing the public of its good works, such as funding shelters for the homeless, food donations for the needy and programs against domestic violence.28 Philip Morris spent millions more dollars on publicising its charitable works in the US (US$150 million) than it actually donated ($US115 million).21 This advertising also allowed Philip Morris to generate its own positive publicity in mainstream media although direct tobacco advertising is banned on television in the US.29
A US study has documented how tobacco industry philanthropy is not only a public relations tool, but may actually have harmful consequences, particularly in terms of securing tobacco control legislation. Philip Morris explicitly linked philanthropy to government affairs and used contributions as a lobbying tool against public health policies. Through advertising, covertly solicited media coverage, and contributions to legislators’ favourite charities, Philip Morris improved its image among key constituencies, influenced public officials, and divided the public health field.30
Tobacco industry philanthropic involvement is of concern to other charitable organisations and donors.31 In 2010, the Bill & Melinda Gates Foundation withdrew a grant of $5.2 million to Canada’s International Development Research Centre (IDRC), stating that, ‘The foundation was recently informed that the chair of the board of our partner, the International Development Research Centre (IDRC), has until recently also been a Director of Imperial Tobacco Canada, Ltd. We are deeply disappointed by this revelation and feel this conflict is unacceptable as we work to support meaningful tobacco control programs in Africa. Therefore, we are terminating our tobacco control grant to IDRC, effective immediately. We remain committed to tobacco control work and look forward to continuing to partner with the anti-tobacco community’.32
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Section: 10.11.2Date of last update: 26 March 2012
References1. Hirschhorn N. Corporate social responsibility and the tobacco industry: hope or hype? Tobacco Control 2004;13(4):447–53. Available from: http://tc.bmjjournals.com/cgi/content/
abstract/13/4/447
2. British American Tobacco. Sustainability report 2010. London: British American Tobacco, 2011, [viewed 12 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO7FAK65?opendocument&SKN=1
3. British American Tobacco Australia. Our principles and standards. CSR Governance. Corporate website. Maroubra, New South Wales: British American Tobacco Australia, 2010, [viewed 12 August 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WZEFH?opendocument&SKN=1
4. Philip Morris International Corporate Website. New York: Philip Morris International Management SA, 2008, [viewed March 2008]. Available from: http://www.philipmorrisinternational.com/pmintl/pages/eng/default.asp
5. Imperial Tobacco Group. CR overview. Annual report, Corporate website. Bristol, UK: Imperial Tobacco Group, 2010, [viewed 12 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=305
6. Palazzo G and Richter U. CSR business as usual? The case of the tobacco industry. Journal of Business Ethics 2005;61:387-401.
7. Friedman LC. Philip Morris’s website and television commercials use new language to mislead the public into believing it has changed its stance on smoking and disease. Tobacco Control 2007;16(6):e9. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/16/6/e9
8. Warner KE. What’s a cigarette company to do? American Journal of Public Health 2002;92(6):897–900. Available from: http://www.ajph.org/cgi/content/extract/92/6/897
9. Warner KE. What’s a cigarette company to do? American Journal of Public Health 2002;92(6):897–900. Available from: http://www.ajph.org/cgi/content/extract/92/6/897
10. Warner KE. What’s a cigarette company to do? American Journal of Public Health 2002;92(6):897–900. Available from: http://www.ajph.org/cgi/content/extract/92/6/897
9. Philip Morris International. Regulating tobacco products, Corporate website. New York: Philip Morris International Management, 2011, [viewed 12 August 2011]. Available from: http://www.pmi.com/eng/tobacco_regulation/regulating_tobacco/pages/regulating_tobacco.aspx
10. Yang JS and Malone RE. ‘Working to shape what society’s expectations of us should be’: Philip Morris’ societal alignment strategy. Tobacco Control 2008;17(6):391-8. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/17/6/391
11. Altria Group. Corporate website. New York: Altria Group, 2008, [viewed 6 February 2008]. Available from: http://www.altria.com
12. Chapman S, Landman A, Shatenstein S, Hirschorn B and Hamman S. The wolf changes its sheepskin. Tobacco Control 2002;11(1):9-10. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/1/9-a
13. Myers ML. Philip Morris changes its name, but not its harmful practices. Tobacco Control 2002;11(3):169-70. Available from: http://tc.bmj.com/cgi/content/abstract/11/3/169
14. Smith EA and Malone RE. Altria means tobacco: Philip Morris’s identity crisis. American Journal of Public Health 2003;93(4):553-6. Available from: http://www.ajph.org/cgi/content/abstract/93/4/553
15. Altria Group. Corporate Website, Philip Morris International Spin-off Investor Information. New York: Altria Group, 2008, [viewed 9 March 2008]. Available from: http://www.altria.com/investors/02_21_00_spinoffinvinfo.asp#highlights
16. O’Connell V. Philip Morris readies aggressive global push. The Wall Street Journal Online, 2008:29 Jan. Available from: http://online.wsj.com/article/SB120156034185223519.html?mod=hpp_us_pageone
17. Glantz SA, Barnes R and Eubanks SY. Compromise or Capitulation? US Food and Drug Administration Jurisdiction Over Tobacco Products. PLoS Med 2009;6(7):e1000118. Available from: http://dx.doi.org/10.1371%2Fjournal.pmed.1000118
19. Button V. Smokes giant in charity row. p. A4. The Age, (Melbourne) 22 October 1999:
19. Domestic violence costing up to $1.5b. The Canberra Times, 2003:8 Feb. 3
20. Farouque F. Domestic violence a ‘workplace issue’. The Age, (Melbourne) 2003:3 Feb. 15
21. Metherell M. Tobacco sponsorship under fire. Sydney Morning Herald, 2003:7 Feb. Available from: http://www.smh.com.au/articles/2003/02/06/1044498913856.html
22. Chapman S. Advocacy in action: extreme corporate makeover interruptus: denormalising tobacco industry corporate schmoozing. Tobacco Control 2004;13(4):445–7. Available from: http://tc.bmjjournals.com/cgi/content/abstract/13/4/445
23. Companies ditch conference over tobacco firm’s presence. Sydney Morning Herald, 2005:25 Nov. 9 Available from: http://newsstore.smh.com.au/apps/viewDocument.ac?page=1&sy=smh&kw=Companies+ditch+conference+over+tobacco+firm%27s+presence&pb=smh&dt=selectRange&dr=10years&so=relevance&sf=text&sf=headline&rc=10&rm=200&sp=nrm&clsPage=1&docID=SMH0511255G6Q24ERS5J
24. British American Tobacco Australia. Contributions. Corporate social investment. . Maroubra, New South Wales: British American Tobacco Australia, 2010, [viewed 12 August 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7XG264?opendocument&SKN=1
25. Chapman S. The blood money tradition continues. British Journal of Ophthalmology 2007;91(12):1578. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18024807
26. Philip Morris International. Charitable contributions 2010. New York: Philip Morris International, 2011, [viewed 12 August 2011]. Available from: http://www.pmi.com/eng/about_us/corporate_contributions/documents/2010_Charitable_Contributions_Total.pdf
27. Imperial Tobacco Group. Corporate website. Bristol, UK: Imperial Tobacco Group, 2008, [viewed 5 February 2008]. Available from: http://www.imperial-tobacco.com/index.asp
28. Henriksen L and Fortmann SP. Young adults’ opinions of Philip Morris and its television advertising. Tobacco Control 2002;11(3):236-40. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/3/236
29. Adams PJ, Buetow S and Rossen F. Vested interests in addiction research and policy. Poisonous partnerships: health sector buy-in to arrangements with government and addictive consumption industries. Addiction 2010;105(4):585–90. Available from: http://www3.interscience.wiley.com/user/accessdenied?ID=123317544&Act=2138&Code=4719&Page=/cgi-bin/fulltext/123317544/HTMLSTART
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30. Tesler LE and Malone RE. Corporate philanthropy, lobbying, and public health policy American Journal of Public Health 2008;98(12):2123–33. Available from: http://ajph.aphapublications.org/cgi/content/full/98/12/2123?view=long&pmid=18923118
31. Chapman S. Health and philanthropy--the tobacco connection. The Lancet 2010;377(9759):11-13. Available from: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2810%2961036-7/fulltext
32. Bill & Melinda Gates Foundation. Statement regarding IDRC tobacco control grant. Seattle, Washington: Bill & Melinda Gates Foundation, 2010, [viewed 12 August 2011]. Available from: http://www.gatesfoundation.org/press-releases/Pages/statement-on-idrc-grant-100412.aspx
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10.12
The tobacco industry’s revised stance on health issuesCorporate admission that smoking causes ill-health and death is at the heart of the tobacco industry’s metamorphosis into socially responsible corporate citizens. From the earliest days, the tobacco industry robustly countered any claims that smoking caused disease. Discovery of internal tobacco industry documents in the wake of several US court cases in the late 1990s (discussed in Chapter 10, Section 10.10) proved what health advocates had long suspected—that the tobacco industry was indeed aware that its product was a major cause of death and disease, and that several decades had been spent deliberately colluding in covering up, denying, confusing and questioning the issues of smoking and health.1 Even well into the 1990s, spokespeople for the tobacco industry in Australia denied that tobacco use was a cause of disease, citing, for example, a perceived lack of causal proof, and the vagaries of genetics.i It is highly probable that this legacy of denial, maintained consistently and persuasively for more than half a century, still has residual effects on smokers today.2
10.12.1
Smoking, health and addictionHistorically, the industry denied that smoking was addictive, despite conducting research and developing products that enhanced and increased the uptake of nicotine.3, 4 Today, a visit to any one of the websites of Philip Morris International,5 British American Tobacco Australia6 and Imperial Tobacco Group7 provides the reader with a number of carefully crafted statements about the effects of tobacco on health. Perhaps reflecting the litigation concerns of a company with strong US connections, Philip Morris International states its acceptance of the views of major health authorities with the statement: ‘Smoking causes many serious diseases including cardiovascular disease (heart disease), lung cancer, and chronic obstructive pulmonary disease (emphysema, chronic bronchitis). Smokers are far more likely to become sick with one of these diseases than non-smokers. Smoking is also addictive and can be extremely difficult to stop’.5 British American Tobacco Australia states that, ‘With smoking comes a real risk of serious and fatal diseases such as lung cancer, respiratory disease and heart disease. We also recognise that many people find it is difficult to quit smoking’.6 Less forthcoming, Imperial Tobacco Group (ITG) makes a general statement about smoking and health, stating that, ‘no cigarette is safe, and that it operates its business on the basis that smoking may cause human disease. ITG does acknowledge that ‘smoking can be characterised as addictive as the term is commonly used today’.7
It can safely be assumed that all of the above statements have been thoroughly vetted by industry lawyers to ensure that they will adequately serve the companies’ needs in the event of litigation. Meanwhile, it has been observed by some commentators that in reality, the tobacco companies have not made substantial strides towards a consensus with public health interests on smoking and health. In her analysis of evolving language on tobacco, health and addictiveness on Philip Morris’s website, Friedman comments that Philip Morris’s wording in fact concedes little and is deliberately constructed to leave open options for Philip Morris’s defence in the event of litigation.8 Another study on the use of language on Philip Morris’s website found many contradictions and omissions that may undermine public health messages, including confusing information about addiction, tar and nicotine, a lack of motivational messages to quit smoking, and silence about tobacco-related mortality.9
Henningfield et al have studied courtroom testimony and other related statements made by tobacco companies regarding the addictiveness of tobacco.10 This report concluded that industry strategy has evolved to redefine and trivialise the term ‘addiction’, likening nicotine to substances such as caffeine and chocolate but distinguishing it from hard drugs like cocaine and heroin. The World Health Organization has published an extensive report, Evolution of the Tobacco Industry Positions on Addiction to Nicotine, that provides a detailed outline of the
i A collection of public statements made by tobacco industry executives and officers from the Tobacco Institute of Australia dismissing the impact of smoking on health is available at: http://tobacco.health.usyd.edu.au/front-groups-and-spokespeople/ and http://tobacco.health.usyd.edu.au/diary-of-denial/
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Section: 10.12.2Date of last update: 26 March 2012
tobacco industry’s public and internal views on addiction.11 It concludes that, ‘the industry’s current position on addiction as a complex of social, behavioural and pharmacological factors potentially allows the company to develop a so-called “safer” cigarette that manipulates behavioural and chemical properties related to addiction, but without necessarily changing the potential for addiction at all’.11
10.12.2
Secondhand smokeAs with active smoking, each of the tobacco companies operating in Australia addresses secondhand smoke (SHS) on its website in different, but equally meticulously constructed, statements. Philip Morris International’s website offers a list of health consequences declared by ‘public health officials’ to be caused by SHS, and recommends that the public should be guided by these conclusions (Philip Morris International itself neither confirming nor denying any connection between SHS and disease).12 Philip Morris International also accepts that it is reasonable to restrict smoking in public places, with the exception that it does not support bans in ‘restaurants, bars, cafes, discos and other entertainment establishments, as proprietors should be free to decide whether to permit, restrict, or prohibit smoking. If signage is posted communicating the smoking policy, and includes the public health view that exposure to smoke is harmful to non-smokers, then an individual can make an informed decision about whether or not to enter an establishment’.13 Less acquiescent, British American Tobacco Australia cites conclusions by the World Health Organization and the National Health and Medical Research Council on SHS, but goes on to cast doubt on the strength of the epidemiological research upon which these conclusions are based. British American Tobacco Australia only supports ‘regulation that accommodates the interests of both non-smokers and smokers and limits non-smokers’ involuntary exposure to [environmental tobacco smoke]...such as the creation of smoke-free areas, combined with adequate provision for smokers’.14
Imperial Tobacco takes a very different position, acknowledging that SHS can be an annoyance, but declaring that ‘it is our view that the scientific evidence, taken as a whole, is insufficient to establish that other people’s tobacco smoke is a cause of any disease’, and asserting that ‘bans on smoking in public places are disproportionate and unnecessary’.15 Imperial reiterates the industry’s standard arguments from earlier decades that issues regarding SHS can be resolved through common sense, courtesy, improved ventilation, and the introduction of smokefree areas in the workplace, restaurants and other public places.15
In Australia and internationally, the tobacco industry continues to lobby against measures to protect non-smokers from tobacco smoke, to dispute and undermine findings by medical and health bodies16-18 and to fund, directly and indirectly,19-22 research that supports its position on the health effects of secondhand smoke.
56 Tobacco in Australia:Facts and Issues
Section: 10.12.2Date of last update: 26 March 2012
References1. Francey N and Chapman S. ‘Operation Berkshire’ - the international tobacco companies’ conspiracy. British Medical Journal 2000;321(7257):371-4. Available from: http://www.bmj.com/
cgi/reprint/321/7257/371.pdf
2. Carter S and Chapman S. Smoking, disease, and obdurate denial: the Australian tobacco industry in the 1980s. Tobacco Control 2003;12(suppl. 3):23iii-30. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/suppl_3/iii23
3. Stevenson T and Proctor RN. The secret and soul of Marlboro: Phillip Morris and the origins, spread, and denial of nicotine freebasing. American Journal of Public Health 2008;98(7):1184–94. Available from: http://www.ajph.org/cgi/content/abstract/98/7/1184
4. Wayne GF and Carpenter CM. Tobacco industry manipulation of nicotine dosing. Handbook of Experimental Pharmacology 2009(192):457–85. Available from: http://www.springerlink.com/content/p620645230641214/
5. Philip Morris International. Smoking and health New York: Philip Morris International, 2011, [viewed 12 August 2011]. Available from: http://www.pmi.com/eng/tobacco_regulation/smoking_and_health/pages/smoking_and_health.aspx
6. British American Tobacco Australia. Cigarettes and smoking. Maroubra, New South Wales: British American Tobacco Australia, 2010, [viewed 12 August 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WZEPS?opendocument&SKN=1
7. Imperial Tobacco Group. Tobacco and health. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 12 August 2012]. Available from: http://www.imperial-tobacco.com/index.asp?page=40
8. Friedman LC. Philip Morris’s website and television commercials use new language to mislead the public into believing it has changed its stance on smoking and disease. Tobacco Control 2007;16(6):e9. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/16/6/e9
9. Smith E and Malone R. Philip Morris’s health information web site appears responsible but undermines public health. Public Health Nursing 2008;25(6):554–64. Available from: http://www3.interscience.wiley.com/journal/121473560/abstract
10. Henningfield J, Rose C and Zeller M. Tobacco industry litigation position on addiction: continued dependence on past views. Tobacco Control 2006;15(suppl. 4):iv27-36. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/suppl_4/iv27
11. Hirschhorn N. Evolution of the Tobacco Industry Positions on Addiction to Nicotine. Tobacco Free Initiative. Geneva: World Health Organization, 2008. Available from: http://www.who.int/tobacco/publications/evolution_tob_ind_pos_add_nicotine/en/index.html
12. Philip Morris International. Secondhand smoke. New York: Philip Morris International, 2011, [viewed 12 August 2012]. Available from: http://www.pmi.com/eng/tobacco_regulation/smoking_and_health/Pages/secondhand_smoke.aspx
13. Philip Morris International. Regulation of public place smoking New York: Philip Morris International, 2011, [viewed 12 August 2011]. Available from: http://www.pmi.com/eng/tobacco_regulation/regulating_tobacco/pages/public_place_smoking.aspx
14. British American Tobacco Australia. Second-hand smoke. Maroubra, New South Wales: British American Tobacco Australia, 2010, [viewed 12 August 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WZEWB?opendocument&SKN=1
15. Imperial Tobacco Group. Environmental tobacco smoke (ETS) and smoking in public places. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 12 August 2012]. Available from: http://www.imperial-tobacco.com/index.asp?page=37
16. Trotter L and Chapman S. ‘Conclusions about exposure to ETS and health that will be unhelpful to us: how the tobacco industry attempted to delay and discredit the 1997 Australian National Health and Medical Research Council report on passive smoking. Tobacco Control 2003;12(suppl. 3):iii102-6. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/12/suppl_3/iii102
17. Muggli ME, Hurt R and Repace J. The tobacco industry’s political efforts to derail the EPA report on ETS. American Journal of Preventive Medicine 2004;26(2):166-77. Available from: http://www.ncbi.nlm.nih.gov/pubmed/14751332
18. Ong E and Glantz S. Tobacco industry efforts subverting International Agency for Research on Cancer’s second-hand smoke study. Lancet 2000;355(9211):1253–9. Available from: http://www.thelancet.com/journals/lancet/article/PIIS0140673600020985/abstract
19. Tong EK, England L and Glantz S. Changing conclusions on secondhand smoke in a sudden infant death syndrome review funded by the tobacco industry. Pediatrics 2005;115(3):e356-e66. Available from: http://pediatrics.aappublications.org/cgi/reprint/115/3/e356.pdf
20. Tong EK and Glantz SA. Tobacco industry efforts undermining evidence linking secondhand smoke with cardiovascular disease. Circulation 2007;116(16):1845-54. Available from: http://circ.ahajournals.org/cgi/reprint/116/16/1845.pdf
21. Bero LA, Glantz S and Hong M-K. The limits of competing interest disclosures. Tobacco Control 2005;14(2):118-26. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/14/2/118
22. Kummerfeldt CE, Barnoya J and Bero LA. Philip Morris involvement in the development of an air quality laboratory in El Salvador. Tobacco Control 2009;18(3):241–4. Available from: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2679184/
57Chapter 10: The tobacco industry in Australian society
Section: 10.13Date of last update: 26 March 2012
10.13
Encouraging young people not to smokeFor decades, the tobacco manufacturing industry has publicly stated that it does not wish young people to start smoking. The health establishment has long regarded these claims with scepticism on the grounds that it is self evident that if an industry that kills half of its regular, persistent consumers wishes to stay in business, then it needs to find a steady stream of new recruits. Despite industry protestations to the contrary, there is ample evidence that its promotional activities in Australia1 and internationally2 have in the past targeted, and continue to target, new usersi (see also Chapter 11). Initiatives adopted by the tobacco industry with the stated intention of reducing the appeal of its products to young people have been designed to forestall government intervention and to give the impression that the industry is cooperative and responsible. In the words of a British American Tobacco official in 1973, describing a voluntary agreement for the industry in Hong Kong to withdraw tobacco advertising during children’s television viewing hours: ‘…this is one of the proposals that we shall initiate to show that we as an industry are doing something about discouraging young people to smoke. This of course is a phony way of showing sincerity as we all well know’.4ii
As part of the industry strategy to embrace corporate responsibility, youth smoking prevention programs have been developed worldwide. These have typically taken the form of programs aimed at retailers, advertising aimed at young people and their parents, and sponsorship of ‘life skills’ educational programs.5 These activities have been widely criticised by tobacco control experts for their demonstrated ineffectiveness, as well as the benefits they may bring the tobacco industry, including:5–7
< the appearance of being proactive and responsible, while participating in activities which they recognise are unlikely to affect uptake of smoking among young people
< forestalling more effective tobacco control measures that will damage the industry’s interests, such as advertising bans or taxation increases
< shifting responsibility for prevention from the industry and placing the onus on retailers, parents and social groups
< fostering partnerships with government and non-government health and education interests, which may give the industry political clout as well as credibility
< strengthening communications with retailers and shoring up support for future lobbying activities < making opponents look like extremists < giving the industry an opportunity to communicate directly with young people < reinforcing smoking as an ‘adult choice’ (hence enhancing its cachet among teenagers) < providing ‘proof ’ if required in a legal setting that the industry has taken action to discourage youth smoking.
Interestingly, despite opposing real tax increases and denying the effect that higher prices have on reducing tobacco consumption, British American Tobacco Australia CEO David Crowe appeared to acknowledge the importance of price in youth smoking prevention during a media interview on his opposition to plain packaging reforms. David Crowe stated that a direct consequence of plain packaging will be that, ‘we no doubt will modulate our price down, more people will smoke. We all know, things get cheaper people buy more and more kids will smoke. And that is obviously completely opposite to what the Government intends’.7
i Experimentation with smoking overwhelmingly occurs during the teenage years. Data from the 2010 National Drug Strategy Household Survey shows that the mean age for initiation of smoking in Australia is 16.0 years3
ii See Knight and Chapman4 for detailed discussion of tobacco industry activities in Hong Kong. This excerpt from minutes of a meeting between representatives of tobacco manufacturers in Hong Kong may be viewed at: http://legacy.library.ucsf.edu/tid/owq24e00/pdf;jsessionid=07C0248832774571CB38B8ED892AB35A
58 Tobacco in Australia:Facts and Issues
Section: 10.13.2Date of last update: 26 March 2012
10.13.1
Youth access programsAccess programs address how young people purchase tobacco, and generally focus on the retail environment. In Australia it is illegal in every state and territory for anyone aged younger than 18 to purchase tobacco products. Laws regarding sales to minors have long been a component of a comprehensive tobacco control program and their role in Australian tobacco control policy remains important as a deterrent to under-age sales.8
However there is debate over how effective access laws are in reducing prevalence in young people, since it is well known that younger smokers obtain their cigarettes from a variety of sources, particularly friends and family.9 This means that although strictly policed laws might indeed reduce sales to minors, they do not stop young people from getting cigarettes via their social networks.10 Investigation of tobacco industry documents in Australia and overseas has shown that the industry has co-opted youth access issues as a low-risk opportunity for gaining important public relations benefits.5,1,11
Since the early 1980s, the Australian tobacco industry has actively supported access programs by providing information and signage to tobacco retailers.1 The three Australian companies currently co-sponsor a program called ‘18+—it’s the law’, which provides in-store materials and advice to retailers.i For the launch of the 2002 version of the program, the tobacco industry advertised in both the trade and mainstream press. In an environment in which discourse between the tobacco industry and the public is greatly curtailed, this advertising provided a rare opportunity for the industry to portray itself as a socially responsible corporate citizen.
10.13.2
‘Life skills’ programsAnother component of the industry’s activities in youth smoking prevention is sponsorship of life skills education programs. These programs typically touch on licit and illicit drug use, and include themes such as personal responsibility, self-determination, self-esteem, peer influences and media influences. There is strong evidence that in the US, the tobacco industry has actively supported programs known to be ineffective and that in doing so it has managed to keep at bay the introduction of other, more hard-hitting life skills programs.ii12 Analysis of these programs has found them to be fundamentally deficient from a public health perspective.13 These programs have also provided the tobacco industry with leverage against the introduction of stronger tobacco control measures intended to protect young people.12,14
Efforts by the Australian tobacco industry to distribute material in schools failed during the 1980s.15,16 In the late 1990s Philip Morris funded the development of a program for Australian teachers to help schoolchildren ‘say no’ to smoking, illicit drugs, drinking and bullying. Philip Morris wished to conceal its association with the program, ‘I’ve got the power’, due to fears that if the connection were exposed, the program would meet with hostility.1 Their fears proved well founded and the program has not gained acceptance in Australia.17 However, despite criticism, Philip Morris has had involvement with funding educational materials about substance abuse intended for young Aboriginal people, in collaboration with the NSW Aboriginal Education Consultative Group and the Victorian Aboriginal Education Association Incorporated.18
The World Health Organization has recommended against the use of tobacco industry-endorsed youth smoking prevention programs, in recognition that they are intended to serve industry purposes rather than reduce the uptake of smoking.14
i See: http://www.bata.com.au/group/sites/bat_7wykg8.nsf/vwPagesWebLive/DO7WYLH5?opendocument&SKN=1ii Such as programs that expose industry tactics, deal graphically with health effects and denormalise smoking. See Chapter 5.
59Chapter 10: The tobacco industry in Australian society
Section: 10.13.3Date of last update: 26 March 2012
10.13.3
Anti-smoking advertisingIn the US and other countries tobacco companies have launched extensive television and magazine advertising campaigns with the stated intention of discouraging smoking among young people.5 These programs have proliferated, Philip Morris taking its offensive to more than 70 countries in 2001.5 In the US, the volume of tobacco-sponsored anti-smoking advertising has equalled or exceeded that of health interests.19, 20
In 1998, Philip Morris commenced the ‘Think. Don’t Smoke’ campaign in the US. This was soon followed by another campaign by US-based company, Lorillard, with the slogan ‘Tobacco is whacko if you’re a teen’.20 The common message of these advertisements is that smoking is an adult choice and that young people don’t need to smoke to fit in socially. The Philip Morris advertisements do not explain exactly why young people should not smoke, instead repeating the theme that you do not have smoke to ‘be cool’.20, 21 Philip Morris has also produced advertisements aimed at parents (‘Talk. They’ll Listen’).
Several studies from the US show that industry-funded programs have not been effective20–24 and may even have fostered a more positive attitude towards the tobacco companies.20, 24 A large study conducted over a four-year period found that tobacco industry campaigns neither reduced smoking nor intention to smoke among the target audience, and that advertisements advising parents to talk to their children about smoking might have influenced teenagers in their senior high school years to smoke.22 The tobacco companies do not support campaigns that could affect profitability or undermine industry operations.5, 12
60 Tobacco in Australia:Facts and Issues
Section: 10.13.3Date of last update: 26 March 2012
References1. Carter S. From legitimate consumers to public relations pawns: the tobacco industry and young Australians. Tobacco Control 2003;12(suppl. 3):iii71-8. Available from: http://www.ncbi.
nlm.nih.gov/pubmed/14645951
2. US Department of Health and Human Services. Reducing tobacco use: a report of the Surgeon General. Atlanta, Georgia: US Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2000. Available from: http://www.cdc.gov/tobacco/data_statistics/sgr/2000/complete_report/index.htm
3. Australian Institute of Health and Welfare. 2010 National Drug Strategy Household Survey report. Drug statistics series no. 25, AIHW cat. no. PHR 145. Canberra: Australian Institute of Health and Welfare, 2011. Available from: http://www.aihw.gov.au/WorkArea/DownloadAsset.aspx?id=10737419578&libID=10737419577
4. Knight J and Chapman S. ‘A phony way to show sincerity, as we all well know’: tobacco industry lobbying against tobacco control in Hong Kong. Tobacco Control 2004;13(suppl. 2):ii13-21. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/13/suppl_2/ii13.pdf
5. Landman A, Ling PM and Glantz SA. Tobacco industry youth smoking prevention programs: protecting the industry and hurting tobacco control. American Journal of Public Health 2002;92(6):917-30. Available from: http://www.ajph.org/cgi/reprint/92/6/917
6. Wakefield M, McLeod K and Perry CL. ‘Stay away from them until you’re old enough to make a decision’: tobacco company testimony about youth smoking initiation. Tobacco Control 2006;15(suppl. 4):iv44-53. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/suppl_4/iv44
7. Miller B. Tobacco industry ups plain pack campaign. Radio National, Australian Broadcasting Corporation, (Sydney) 2011:17 May. Available from: http://www.abc.net.au/worldtoday/content/2011/s3218995.htm
8. Ministerial Council on Drug Strategy and Department of Health and Ageing. National Tobacco Strategy 2004-2009. Canberra: Commonwealth of Australia, 2005. Available from: http://www.health.gov.au/internet/wcms/publishing.nsf/Content/phd-pub-tobacco-tobccstrat2-cnt.htm
9. White V and Smith G. 3. Tobacco use among Australian secondary students (PDF 87 KB) Australian secondary school students’ use of tobacco, alcohol, and over-the-counter and illicit substances in 2008. Canberra: Drug Strategy Branch Australian Government Department of Health and Ageing, 2009;Available from: http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/Publishing.nsf/content/school08
10. Fichtenberg CM and Glantz SA. Youth access interventions do not affect youth smoking. Pediatrics 2002;109(6):1088-92. Available from: http://pediatrics.aappublications.org/cgi/reprint/109/6/1088
11. Ling PM, Landman A and Glantz SA. It is time to abandon youth access tobacco programmes [Editorial]. Tobacco Control 2002;11(1):3-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/1/3.pdf
12. Mandel L, Bialous S and Glantz S. Avoiding ‘truth’: tobacco industry promotion of life skills training. Journal of Adolescent Health 2006;39(6):868-79. Available from: http://repositories.cdlib.org/postprints/1559/
13. Sussman S. Tobacco industry youth tobacco prevention programming: a review. Preventive Science 2002;3(1):57-67. Available from: http://www.ncbi.nlm.nih.gov/pubmed/12002559
14. World Health Organization. Building blocks for tobacco control: a handbook. World Health Organisation Tobacco Free Initiative. Geneva: WHO, 2004. Available from: http://www.who.int/tobacco/resources/publications/general/HANDBOOK%20Lowres%20with%20cover.pdf
15. Tobacco request rejected. The West Australian, (Perth) 1988:3 Jun. 31
16. ABC Television. Young people and smoking transcript. Pressure Point, Australian Broadcasting Corporation, (Sydney) 1985:25 April.
17. Chapman S. Tobacco giant’s antismoking course flops. British Medical Journal 2001;323(7323):1206. Available from: http://www.bmj.com/cgi/content/full/323/7323/1206/a
18. Metherell M. Smoke giant offers lesson for schools. Sydney Morning Herald, (Sydney) 21 September 2002: Available from: http://www.smh.com.au/articles/2002/09/20/1032054962835.html
19. Wakefield M, Szczypka G, Terry-McElrath Y, Emery S, Flay B, Chaloupka F, et al. Mixed messages on tobacco: comparative exposure to public health, tobacco company- and pharmaceutical company-sponsored tobacco-related television campaigns in the United States, 1999-2003. Addiction 2005;100(12):1875-83. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16367989
20. Henriksen L, Dauphinee AL, Wang Y and Fortmann SP. Industry sponsored anti-smoking ads and adolescent reactance: test of a boomerang effect. Tobacco Control 2006;15(1):13–8. Available from: http://tc.bmjjournals.com/cgi/content/abstract/15/1/13
21. Biener L. Anti-tobacco advertisements by Massachusetts and Philip Morris: what teenagers think. Tobacco Control 2002;11(suppl. 2):ii43-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/suppl_2/ii43.pdf
22. Wakefield M, Terry-McElrath Y, Emery S, Saffer H, Chaloupka FJ, Szczypka G, et al. Effect of televised, tobacco company-funded smoking prevention advertising on youth smoking-related beliefs, intentions, and behavior. American Journal of Public Health 2006;96(12):2154-60. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17077405
23. Wakefield M, Flay B, Nichter M and Giovino G. Effects of anti-smoking advertising on youth smoking: a review. Journal of Health Communication 2003;8(3):229-47. Available from: http://www.ncbi.nlm.nih.gov/pubmed/12857653
24. Farrelly MC, Healton CG, Davis KC, Messeri P, Hersey JC and Haviland ML. Getting to the truth: evaluating national tobacco countermarketing campaigns. American Journal of Public Health 2002;92(6):901-7. Available from: http://www.ajph.org/cgi/reprint/92/6/901
61Chapter 10: The tobacco industry in Australian society
Section: 10.14.1Date of last update: 26 March 2012
10.14
The environmental impact of tobacco productionAs noted in Section 10.8.1, tobacco growing is shifting from developed countries and becoming concentrated in developing countries. Global tobacco production was forecast to continue increasing until the year 2010, and was expected to be matched by growing demand for tobacco products in the developing world as population and income increase.1
For the farmer, tobacco growing often presents an attractive alternative crop to food, for as well as bringing in a higher income, tobacco growers may also receive practical as well as financial assistance from the tobacco industry2 (although this is not necessarily the case3, 4). At the government level, tobacco growing may also be regarded in a favourable light due to the financial benefits it brings through trade and taxation, at least in the short term.5 From the point of view of the tobacco industry, production costs in the developing world are lower and the market is less regulated,1 making for a more conducive operating environment.
Since the late 1970s, concerns have been registered by a number of environmental agencies regarding the impact of tobacco growing.5 The tobacco crop itself requires a high degree of maintenance, including pest and disease control, a regular water supply and fertilisers to optimise output. Although some tobacco leaf is air or sun-dried, the majority of varieties grown (particularly in the developing world) require curing with generated heat, usually fuelled by wood, coal or gas. Beyond the primary industry, cigarette companies run manufacturing operations to turn leaf into various tobacco products ready for distribution, marketing and sale to end users. The tobacco manufacturing industry generates a number of chemical by-products that are considered hazardous, including ammonia, nicotine and nicotine by-products, hydrochloric acid and toluene. In developed countries, appropriate disposal of these chemicals is strictly regulated; the same may not be true in developing countries where tobacco manufacturing is becoming more concentrated.6
The environmental impact of tobacco production has been taken up by the major tobacco companies as part of their portfolio for corporate social responsibility. The major tobacco companies display their environmental credentials by describing on their websites their adoption of sustainable and low-impact practices from farm to factory.7,8,9,10 But no matter how clean or green tobacco production can be, ameliorating environmental concerns ignores the most obvious environmental impact of tobacco production—the deaths of almost five million people worldwide each year.10
10.14.1
Land clearing and deforestationIn some countries tobacco growing has lead to extensive land clearance and deforestation to make room for new crops, and to provide timber to fuel the heaters used to dry the tobacco leaf following harvest.
Recent, independent information on the status of land maintenance in tobacco farming areas is lacking. The most authoritative review available examines data from 1990–1995.5 This study found that in the early 1990s, 211 000 hectares of forests or woodlands were cleared each year for the purposes of tobacco farming, more than 90% of this occurring in the developing world.5 This was equivalent to 1.7% of global net losses of natural forest each year, or a mean average in tobacco-growing countries of 4.6% of total national deforestation in the five-year period from 1990–1995.5 Overall, around half of the wood consumed for tobacco farming was gathered from common land and native forests, rather than from sustainable sources, and in some countries usage of wood from unmanaged sources was much higher.5 Case reports on farming activity in specific countries attested to the environmental damage caused by farming, and also to the ineffectiveness of measures for reforestation, citing instances of inappropriate plant stock and poorly supported programs.3, 11 Likewise, tobacco industry claims of extensive tree planting from the same time period did not stand up to scrutiny.12
Geist concluded that tobacco’s impact on forest resources had reached ‘high’ or ‘serious’ levels (above the national mean average of 4.6%) in almost one-third of the 66 developing countries in which tobacco is grown, including South Korea, Uruguay, Bangladesh, Malawi, Jordan, Pakistan, Syria, China, Zimbabwe, Argentina, Tunisia and
62 Tobacco in Australia:Facts and Issues
Section: 10.14.2Date of last update: 26 March 2012
Burundi. In contrast, the impact of tobacco farming on woodland in developed regions such as Canada and North America, where there was a net increase in forest cover, was low.5 Reports commissioned by the tobacco industry in the 1980s and 1990s also signalled alarm at deforestation due to tobacco growing and curing.5, 12
The International Tobacco Growers’ Association,i an affiliation of tobacco growers, claims that preservation of natural resources is a priority and that sustainability is encouraged in most countries where tobacco farmers use wood for fuel. The International Tobacco Growers’ Association states that tobacco growers have contributed to the doubling of natural woodland in regions of southern Brazil.13
On their websites, the major international tobacco companies claim adherence to principles of environment protection and sustainability while pointing out that in the main, the companies do not own tobacco farms and do not have direct control over farming practices.ii For example, British American Tobacco encourages farmers to use non-wood fuels and sponsors forestry programs, as well as using packaging materials from suppliers who use sustainable sources.14 Philip Morris International states that it has developed ‘Good Agricultural Practices’ guidelines, which include avoidance of deforestation and establishment of reforestation.15 Independent verification is not available that the reforestation programs, such as those publicly supported by the tobacco industry, are successful.
10.14.2
Pesticide useCommercial tobacco growing involves the use of a range of herbicides, fungicides and insecticides to maximise crop production. In recognition of consumer concern about chemicals present in tobacco, as well as the environmental sequelae of inappropriate use of agrichemicals, all three tobacco companies operational in Australia include reassurances about leaf quality on their websites. Imperial Tobacco states that it provides ‘training on the safe and correct use of pesticides and fertilisers, and techniques to help farmers reduce the need for them’.iii16 Philip Morris and British American Tobacco both point to their companies’ leaf growing programs that aim to promote quality crops without compromising environmental or human safety.17,7
Until they were banned in the mid-1980s, Australian-grown tobacco was treated with organochlorines such as DDT and dieldrin,18 chemicals that have the ability to accumulate in the environment and the body. In 1981 the National Health and Medical Research Council expressed concern when the Australian Government Analytical Laboratories determined that Australian cigarettes contained 43 times more DDT and 30 times more dieldrin than samples of British or American cigarettes.19 Residues of DDT and dieldrin were still evident in soil and river sediments from the tobacco-producing Ovens and King region in Victoria in 1989,20 and may have been implicated in a higher rate of breast cancer detected between 1982 and 2002 in women living in the area.21
Research has shown that at least one Australian tobacco manufacturer—Philip Morris—was aware as recently as 1994 that the leaf it was using still contained organochlorines from pesticides banned in the preceding decade.18 Australian cigarette manufacturers are not required to divulge the levels of pesticide residues present in their tobacco products. Now that all tobacco leaf in Australian cigarettes is acquired on the international market and much of this leaf is sourced from developing countries, where use of agrichemicals may be less regulated, the question of pesticide residues levels in Australian cigarettes remains open, despite the assurances of the tobacco manufacturers.22 There is evidence from internal industry documents that the tobacco industry internationally has fought hard to retain the rights to use certain pesticides and has sought to influence regulatory processes in some countries.23
i See: http://www.tobaccoleaf.org/default.asp . The International Tobacco Growers’ Association is also discussed in Section 10.17.5.ii This may be somewhat disingenuous. For example, there is evidence that the tobacco companies may exert influence over farmers via the leaf dealers See: Otanez MG, Muggli ME, Hurt
RD, Glantz SA. Eliminating child labour in Malawi: a British American Tobacco corporate responsibility project to sidestep tobacco labour exploitation. Tobacco Control 2006;15(3):224–30.iii Imperial Tobacco does not manufacture cigarettes in Australia, but does import here. British American Tobacco Australia manufactures tobacco products for Imperial Tobacco Australia
under licence. However Imperial Tobacco Australia does import a range of tobacco products. See Section 10.4.3.
63Chapter 10: The tobacco industry in Australian society
Section: 10.14.4Date of last update: 26 March 2012
10.14.3
Tobacco production and climate changeClimate change (or global warming) is caused by the increased concentration of certain gases trapped within the earth’s atmosphere. These gases, which include carbon dioxide, methane, nitrous oxide and manufactured substances such as chlorofluorocarbons, are heated by and retain warmth from the sun, leading to rises in average temperatures. These ‘greenhouse gases’ are present in greater quantities due to a range of human activities, including burning fossil fuels, clearing land, some aspects of farming (including using fertilisers), and some industrial processes.24
All phases of tobacco production have the potential to contribute to climate change, from farming to curing the leaf (which for some kinds of tobacco requires the use of heat generated by wood, oil, coal or gas), and the manufacturing process.
The tobacco industry generally acknowledges issues concerning climate change, presenting policy statements and evidence of benchmarking towards reducing greenhouse gas emissions. British American Tobacco25, Imperial Tobacco Group26 and Philip Morris International8 all dedicate pages on their international websites to their engagement with responsible environmental policies. All three tobacco companies are among the 3000-plus signatories to the Carbon Disclosure Project,i responding to regular questionnaires stating their performance in reduction of greenhouse emissions and progress towards targets.
The tobacco industry did not always embrace global environmental concerns. In the early 1990s, lobby groups closely connected with Philip Morris contributed to the public debate about climate change by denouncing the scientific evidence upon which arguments for global warming were based—along with other scientific ‘controversies’ such as the health impacts of secondhand smoke and radioactive waste from nuclear power reactors.27, 28
10.14.4
Genetically modified tobacco leafPublic anxiety about genetically modified (GM) crops has lead to ambivalent attitudes towards GM tobacco. According to Imperial Tobacco, ‘we do not seek to use genetically modified tobacco, as we do not believe that our consumers wish to purchase products that may contain genetically modified materials’.29 Other companies are investing substantially in GM research.
Over the decades the tobacco industry has put considerable effort into altering the qualities of tobacco leaf through genetic manipulation. From an agricultural viewpoint, GM technology has offered prospects for maximising crop disease resistance and output. Tobacco companies have also experimented with genetic engineering as a way of manipulating nicotine concentrate—both reducing it,30 with the aim of providing a potentially less hazardous product, and increasing it, with the apparent intention of boosting addictiveness.31, 32 The most notorious example of tobacco industry efforts to achieve the latter is the case of British American Tobacco’s ‘super-tobacco’, a genetically engineered plant variant that contained a much higher than usual amount of nicotine and was intended to make the company’s products more addictive.33
GM science is now being applied in the pursuit of less harmful forms of tobacco. Philip Morris (USA) has contributed $17.5 million to fund the mapping of the tobacco genome by the North Carolina State University,ii and has also funded research into genetically modified tobacco leaf that produces fewer carcinogens when smoked. RJ Reynolds, another US-based firm, has also successfully applied for field permits to test new tobacco strains.34 Vector Tobacco launched QUEST, a brand which used leaf genetically engineered with reduced nicotine.35,36 The manufacture and sale of QUEST brand cigarettes was discontinued in 2009.37
i The Carbon Disclosure Project is an independent, international, non-profit institution that encourages publicly listed corporations to measure, manage and reduce emissions. The Carbon Disclosure Project website is the largest repository of corporate greenhouse gas emissions data in the world. See: http://www.cdproject.net/
ii See: http://www.pngg.org/tgi/index.html
64 Tobacco in Australia:Facts and Issues
Section: 10.14.4Date of last update: 26 March 2012
References1. Food and Agriculture Organization of the United Nations. Projections of tobacco production, consumption and trade to the year 2010. Rome: FAO, 2003. Available from: ftp://ftp.fao.org/
docrep/fao/006/y4956e/y4956e00.pdf
2. Jha P and Chaloupka F. Curbing the epidemic: governments and the economics of tobacco control. Washington DC: The World Bank, 1999. Available from: http://siteresources.worldbank.org/INTETC/Resources/375990-1113853423731/chapter5.asp
3. Muwanga-Bayego H. Tobacco growing in Uganda: the environment and women pay the price. Tobacco Control 1994;3(3):255-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/255
4. Kweyuh PHM. Tobacco expansive in Kenya: the socio-ecological losses. Tobacco Control 1994;3(3):248-51. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/248.pdf
5. Geist HJ. Global assessment of deforestation related to tobacco farming. Tobacco Control 1999;8(1):18–28. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/8/1/18
6. Novotny T and Zhao F. Consumption and production waste: another externality of tobacco use. A review. Tobacco Control 1999;8(1):75–80. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/8/1/75
7. British American Tobacco Australia. Environmental management. Maroubra, New South Wales: British American Tobacco Australia, 2010, [viewed 13 August 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7XG2JF?opendocument&SKN=1
8. Philip Morris International. Environmental initiatives. New York: Philip Morris International, 2011, [viewed 13 August 2011]. Available from: http://www.pmi.com/eng/about_us/how_we_operate/pages/environmental_initiatives.aspx
9. Imperial Tobacco Group. Environmental impact. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 17 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=115
10. Ezzati M and Lopez AD. Regional, disease specific patterns of smoking-attributable mortality in 2000. Tobacco Control 2004;13(4):388-95. Available from: http://tc.bmjjournals.com/cgi/content/abstract/13/4/388
11. Waluye J. Environmental impact of tobacco growing in Tabora/Urambo, Tanzania. Tobacco Control 1994;3(3):252-4. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/252
12. Chapman S. Tobacco and deforestation in the developing world [Editorial]. Tobacco Control 1994;3(3):191-3. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/191
13. International Tobacco Growers’ Association. Trees and tobacco. Castelo Branco, Portugal: International Tobacco Growers’ Association, 2008, [viewed 8 May 2008]. Available from: http://www.tobaccoleaf.org/conteudos/default.asp?ID=17&IDP=4&P=4
14. British American Tobacco. Afforestation programmes. London: British American Tobacco, 2011, [viewed 13 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52APZ6?opendocument&SKN=1&TMP=1
15. Philip Morris International. Good agricultural practices (GAP) New York: Philip Morris International, 2011, [viewed 13 August 2011]. Available from: http://www.pmi.com/eng/about_us/how_we_operate/pages/good_agricultural_practices.aspx
16. Imperial Tobacco Group. Biodiversity and forestry protection. Working with farmers. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 13 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=566
17. British American Tobacco. Corporate website. London: British American Tobacco, 2008, [viewed 30 June 2008]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AD6H?opendocument&SKN=1&TMP=1
18. Chapman S. ‘Keep a low profile’: pesticide residue, additives, and freon use in Australian tobacco manufacturing. Tobacco Control 2003;12(suppl. 3):iii45-53. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/suppl_3/iii45
19. National Health and Medical Research Council. Report of the 92nd Session of the National Health and Medical Research Council (October 1981). Canberra: NHMRC, 1982.
20. Environment Protection Authority. Biocide contamination in the aquatic environment. A study of the Ovens and King Rivers region. Scientific series SRS 90/004. Melbourne, Australia: EPA, 1990.
21. Khanjani N, English D and Sim M. An ecological study of organochlorine pesticides and breast cancer in rural Victoria, Australia. Archives of Environmental Contamination and Toxicology 2006;50(3):452-61. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16489419
22. Carter S and Chapman S. Smoking, disease, and obdurate denial: the Australian tobacco industry in the 1980s. Tobacco Control 2003;12(suppl. 3):23iii-30. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/suppl_3/iii23
23. McDaniel P, Solomon G and Malone R. The tobacco industry and pesticide regulations: case studies from tobacco industry archives. Environmental Health Perspectives 2005;113(12):1659-65. Available from: http://www.ehponline.org/members/2005/7452/7452.pdf
24. Department of Climate Change and Australian Government. Climate change in a nutshell. Canberra: Commonwealth of Australia, 2011, [viewed 31 July 2011]. Available from: http://www.climatechange.gov.au/climate-change.aspx
25. British American Tobacco. Reducing our carbon footprint. London: British American Tobacco, 2011, [viewed 13 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO7JUGKV?opendocument&SKN=1
26. Imperial Tobacco Group. Our climate change strategy. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 13 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=397
27. Seitz F. Global warming and ozone hole controversies. A challenge to scientific judgement. Washington DC: George C Marshall Institute. [Bates No. 2501355990/6010], 1994. Available from: http://www.pmdocs.com/PDF/2501355990_6010_0.PDF
28. Monbiot G. Exposed: the secret corporate funding behind health research. The Guardian (UK), (London) 2 February 2006: Available from: http://education.guardian.co.uk/higher/comment/story/0,,1703907,00.html
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29. Imperial Tobacco Group. Supply and distribution. Genetically modified tobacco. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 13 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=463
30. Dunsby J and Bero L. A nicotine delivery device without the nicotine? Tobacco industry development of low nicotine cigarettes. Tobacco Control 2004;13(4):362-9. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/13/4/362.pdf
31. Douglas CE. Taking aim at the bull’s-eye: the nicotine in tobacco products. Tobacco Control 1998;7(3):215-18. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/7/3/215.pdf
32. Rabinoff M, Caskey N, Fissling A and Park C. Pharmacological and chemical effects of cigarette additives. American Journal of Public Health 2007;97(11):1981-91. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17666709
33. Lewan T. Dark secrets of tobacco company exposed. Tobacco Control 1998;7(3):315–9. Available from: http://tobaccocontrol.bmj.com/cgi/content/extract/7/3/315
34. Madrigal A. Cigarette maker has conducted 33 GM tobacco tests since ‘05. Wired Science. Boone, Indianna: Conde Naste Publications, 2008, [viewed 23 April 2008]. Available from: http://blog.wired.com/wiredscience/2008/03/cigarette-maker.html
35. Nicotine-free cigarettes? Genetically Engineered Organisms Public Issues Education Project. Ithaca, New York: GEO-PIE Project, Cornell University, 2008, [viewed 30 May 2008]. Available from: http://www.geo-pie.cornell.edu/crops/tobacco.html
36. Liggett Vector Brands. Corporate website. Mebane, North Carolina: Vector tobacco, Liggett Vector Brands, 2006, [viewed 20 May 2008]. Available from: http://www.liggettvectorbrands.com/
37. Vector Group. 2009 Stockholders’ Report. Miami, Florida: Vector Group, 2010, [viewed 17 August 2011]. Available from: http://www.annualreports.com/HostedData/AnnualReports/PDFArchive/vgr2009.pdf
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Section: 10.15.1Date of last update: 26 March 2012
10.15
Ethical farming issuesThe WHO Framework Convention on Tobacco Control (WHO FCTC) is the first treaty negotiated under the auspices of the World Health Organization. At its third session (Durban, South Africa, 17–22 November 2008), the Conference of the Parties to the WHO FCTC decided to establish a working group on economically sustainable alternatives to tobacco growing in relation to Articles 17 and 18.1 At the fourth session of the Conference of the Parties in Uruguay, the working group presented a report that included recommendations for policy options. These policy options include1:
< promotion of opportunities for economically sustainable livelihoods and development of markets < developing opportunities to counter seasonal trade in alternative crops < reducing tobacco production and/or promotion < assistance and cooperation in capacity building for economically sustainable alternative livelihoods < establishing an international information exchange system.
The International Labour Organizationi addressed the fourth session of the Conference of the Parties as an observer and highlighted that viable economic alternatives needed to be developed for many tobacco-dependent communities where members’ livelihoods would be seriously affected as a consequence of the implementation of the WHO FCTC. The International Labour Organization called on the Conference of the Parties to adopt a holistic approach when considering employment alternative policies for those to be affected, and reiterated its willingness to continue collaborating with the WHO FCTC by sharing its experience and expertise in labour market-related issues.2
A tobacco control advocate with direct experience observing tobacco farmers in Malawi has noted that, ‘tobacco industry activities to promote farmer welfare and sustainable agriculture do have some direct impact on farmers’ livelihoods, such as an increase in the number of children who attend school and improved access to clean water. But at what cost? The industry’s activities are really more about promoting an image of corporate responsibility to deflect public attention from tobacco-related child labour, deforestation, pesticide poisoning and soil depletion—in Malawi and other countries’.3
10.15.1
Tobacco farming and child labourAccording to the International Labour Organization, in many countries child labour is mainly an agricultural issue. Globally, 60% of all child labourers between the ages of five and 17 years work in agriculture, which includes tobacco farming. This means more than 129 million girls and boys are affected worldwide. The majority (67.5%) of child labourers are unpaid family members. In agriculture this percentage is even higher, and is combined with early entry into forced work, between five and seven years of age.4
Child labour is common in many regions in which tobacco is grown, although the overall number of children involved is not known. Reports of the plight of child workers in tobacco plantations are available from commentators in Uganda, Zambia and Kenya and Malawi. These accounts describe the long hours and labour intensity of tobacco farming, and the economic necessity for children to work.5,6,7,8 Apart from denying children access to education, work in the tobacco fields may also be hazardous, exposing children to pesticides and other chemicals, and to toxicity due to nicotine in the leaf (‘green tobacco sickness’—see also Chapter 3, Section 20).
Poverty is a major impetus behind child labour, but not the only one: the International Labour Organization also identifies other important influences including social inequality, paucity of educational opportunities and options for decent adult employment, strongly agrarian economies, and traditional and cultural norms. Unscrupulous
i The International Labour Organization is the global United Nations agency responsible for promoting opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity. http://www.ilo.org/global/lang--en/index.htm
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employers may play a part, and external events such as natural disasters, epidemics (e.g. HIV/AIDS) and armed conflict also push children into the role of breadwinner.9
In 2002 the International Tobacco Growers’ Associationi established the Eliminating Child Labour in Tobacco Foundationii with a membership comprising workers’ unions, tobacco manufacturers and the International Tobacco Growers’ Association itself, with the aim of assessing the extent of child labour in tobacco growing, supporting projects to combat child labour, and sharing best practice.10 The International Labour Organization acts an advisor to the foundation. The Eliminating Child Labour in Tobacco Foundation’s 2010 Annual Report details activities in several countries, including Malawi, Tanzania, Uganda, Zambia, and Kyrgyzstan.11 Unsurprisingly the tobacco industry states its abhorrence of child labour, and each of the companies that operates in Australia outlines its policies on its website.12-14 All three companies are also members of and provide financial support to the Eliminating Child Labour in Tobacco Foundation.
The effectiveness of these policies and programs remains a matter for debate. Research by the Center for Tobacco Control Research and Education into the background and modus operandi of the Eliminating Child Labour in Tobacco Foundation provided evidence/made the case that the primary concern for the tobacco companies involved was to enhance their corporate image, without initiating any real change that might undermine the financial benefits presented by child labour.15 The authors of this study comment that the costs of banning child labour and introducing decent working conditions and remuneration for adult tobacco workers in Malawi would be around US$10 million a year, a sum easily affordable given the enormous revenues of the tobacco companies.15
10.15.2
Tobacco farming and ‘fair trade’‘Fair trade’ describes commercial transactions in which farmers and labourers who produce a commodity are paid a fair price, allowing for decent wages, living conditions and community sustainability.iii Fair trade is most often associated with tea, coffee, cotton and cocoa grown in the developing world and sold to more wealthy countries. As noted in Section 10.8.1, most tobacco is sourced from the developing world where farming conditions are often harsh. Acknowledging this, the concept of fair trade in tobacco has been launched with 1st-Nation cigarettes, a brand produced by a small company lead by and employing Mohawk Natives on the Akwesasne Reservation close to the border of New York and Ontario, using tobacco sourced from selected independent tobacco farmers in Malawi. At the time of writing, these cigarettes could only be purchased in the UK.16
While the good intentions of the individuals involved are not in doubt, the concept of a ‘fair trade’ cigarette has raised eyebrows. If the touchstone of fair trade products is ethical trading practices, what are the implications if the product itself is inherently dangerous when used as the manufacturer intended?17 Ironically, the very people which 1st-Nation wishes to support—poor tobacco farmers in the developing world and First Nation peoples of North America—are especially affected by tobacco-caused death and disease.iv To date, 1st-Nation has not been accredited by any international fair trade organisation, since none of these organisations has endorsed standards that cover tobacco production.16
i For further discussion about the International Tobacco Growers’ Association, refer to Section 10.17.5ii Webpage of the Eliminating Child Labour in Tobacco Foundation: http://www.eclt.org/iii See the international website for Fairtrade for further information: http://www.fairtrade.net/about_fairtrade.htmliv Like some other Indigenous peoples, First Nation people have a higher prevalence of smoking than the rest of their country’s population and hence bear greater health consequences (see
Chapter 8, Section 3.4). The burden of death and disease due to smoking is shifting to the developing world, where prevalence of smoking has not declined and in some regions continues to increase (see Chapter 3, Section 36).
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Section: 10.15.2Date of last update: 26 March 2012
References1. WHO Framework Convention on Tobacco Control Conference of the Parties. Economically sustainable alternatives to tobacco growing (in relation to Articles 17 and 18 of the WHO
Framework Convention on Tobacco Control) Progress report of the working group. Provisional agenda item 5.5 (FCTC/COP/4/9 for Uruguay 15-22 November 2010) 15 August, Geneva: World Health Organization, 2010. Available from: http://apps.who.int/gb/fctc/PDF/cop4/FCTC_COP4_9-en.pdf
2. International Labour Organization. Statement to the WHO Framework Convention on Tobacco Control Conference of the Parties Punta del Este - Uruguay, 15-20 November 2010. Geneva: ILO, 2010, [viewed 13 August 2011]. Available from: http://www.ilo.org/public/english/dialogue/sector/papers/food/statement.pdf
3. Otanez M. Views on trying to change the tobacco industry: health justice and marginalization of tobacco companies. Tobacco Control 2009;18(5):339–40. Available from: http://tobaccocontrol.bmj.com/content/18/5.toc
4. International Labour Organization. Child labour in agriculture. Geneva: ILO, 2011, [viewed 13 August 2011]. Available from: http://www.ilo.org/ipec/areas/Agriculture/lang--en/index.htm
5. Muwanga-Bayego H. Tobacco growing in Uganda: the environment and women pay the price. Tobacco Control 1994;3(3):255-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/255
6. Kweyuh PHM. Tobacco expansive in Kenya: the socio-ecological losses. Tobacco Control 1994;3(3):248-51. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/3/3/248.pdf
7. Mwanamukando C. 6,000 children working on tobacco farms-Choma Da. The Post, (Lusaka, Zambia) 2006:9 May. Available from: http://www.tobacco.org/news/223640.html
8. Semu-Banda P. Playing with children’s lives: Big Tobacco in Malawi, 25 Feb. San Francisco: CorpWatch, 2008, [viewed 20 May 2008]. Available from: http://www.corpwatch.org/article.php?id=14947
9. International Labour Organization. About child labour. Geneva: ILO, 2011, [viewed 13 August 2011]. Available from: http://www.ilo.org/ipec/facts/lang--en/index.htm
10. International Tobacco Growers’ Association. Child labour / ITGA on child labour. Castelo Branco, Portugal: ITGA, 2008, [viewed 7 May 2008]. Available from: http://www.tobaccoleaf.org/social_responsibility/index.asp?op=3
11. Eliminating Child Labour in Tobacco Foundation. Foundation annual report 2010. Eliminating child labour in tobacco growing. Geneva: ECLT 2011, [viewed 14 August 2011]. Available from: http://www.eclt.org/site/wp-content/uploads/2011/05/ECLTAnnualReport20101-11-final2_lores.pdf
12. Philip Morris International. Child labor. New York: Philip Morris International, 2011, [viewed 14 August 2011]. Available from: http://www.pmi.com/eng/about_us/how_we_operate/pages/child_labor.aspx
13. British American Tobacco. Eliminating Child Labour in Tobacco Growing Foundation. London: British American Tobacco, 2011, [viewed 13 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AQDT?opendocument&SKN=1
14. Imperial Tobacco Group. Finding solutions to child labour. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 14 August 2011]. Available from: http://www.imperial-tobacco.com/index.asp?page=390
15. Otanez MG, Muggli ME, Hurt RD and Glantz SA. Eliminating child labour in Malawi: a British American Tobacco corporate responsibility project to sidestep tobacco labour exploitation. Tobacco Control 2006;15(3):224-30. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/3/224
16. Am Trading. Corporate website. Akwesasne, New York: Amtrading, 2008, [viewed 19 May 2008]. Available from: http://www.amtrading.us/main.html
17. Benjamin A. Ethical smoke screen. London: Ethical Living Blog, guardian.co.uk, 2007, [viewed 19 May 2008]. Available from: http://blogs.guardian.co.uk/ethicalliving/2007/11/a_brand_of_cigarettes_that.html
69Chapter 10: The tobacco industry in Australian society
Section: 10.16Date of last update: 26 March 2012
10.16
The environmental impact of tobacco useCigarette butts are common litter items. An estimated 60% of Australian smokers do not dispose of their butts appropriately when smoking outside.1,2 Tobacco packages consisting of cardboard, foil and plastic wrappers, and matches, match boxes and lighters also contribute to the volume of smoking related litter in Australia.
According to Keep Australia Beautiful’si National Litter Index for 2009–10, cigarette butts remain the most pervasive litter item nationally, and an average of 32 cigarette butts per 1,000m2 were identified across all national sites during the year of 2009–10 (up from 30 cigarette butts in 2008–09, the same as 2007–08 and down from 35 butts in 2006–07 and 34 butts in 2005–06).3 Clean Up Australia’sii annual Rubbish Report 2010 similarly reports that cigarette butts were the most commonly found rubbish item for the fifteenth year in a row. Cigarette butts, which make up 19.5% of total rubbish, were most commonly found on beaches and in parks.4
The Butt Littering Trustiii, a tobacco industry supported organisation discussed in detail in Section 10.16.1, has estimated that around seven billion cigarette butts are littered in Australia every year.2 This figure was calculated by assuming that of the 23 billion cigarettes that were consumed nationally in 2002, 50% were smoked outdoors, and about 59% of these were discarded as litter, making the estimated figure around 7 billion.
Discarded cigarette butts have serious effects for the environment. Cigarette filters are made of plastic and are not readily biodegradable, taking from two months to 12 years to break down.1,2 Chemicals in tobacco remnants in cigarette butts and toxic residue within the filters leach into soil and water, directly polluting these environments and having a measurable effect on wildlife.1, 5 Cigarette litter is a point source for metal contamination in waterways and the rapid rate of leaching may increase the risk of acute harm to local organisms.6 Leachate from cigarette butts is acutely toxic to representative marine and freshwater fish species.7 Discarded cigarette butts may also present health risks to infants and animals due to indiscriminate ingestion. Severe toxic outcomes due to butt consumption are rare, but the ubiquity of cigarette butt waste and its potential for adverse health effects on human and animals warrants further investigation of possible policy interventions to reduce butt littering.8 In addition, discarded cigarettes and matches are an important cause of fires in Australia.9 The littering of cigarette butts is illegal in every state and territory.5
Some researchers and commentators have proposed novel solutions to reducing butt litter, including applying a clean-up levy on cigarette packs,10 developing biodegradable filters, putting a monetary deposit on filters (similar to bottle recycle programs), increasing the availability of butt litter receptacles, and banning the sale of filtered cigarettes altogether.11 Others have proposed passing the responsibility and cost for recycling or disposal of cigarette butts on to the manufacturers, as occurs in some US states for products such as batteries, carpet, cell phones, electronics, fluorescent lighting, mercury thermostats, and paint and pesticide containers.12 Implementing entirely smokefree outdoor areas, such as college campuses, could also reduce total butt litter and ground clean-up costs.13
Various agencies around Australia have identified butt littering as an important environmental problem and are working to encourage other agencies and the public to address the issue. During 2007 the Commonwealth Department of the Environment, Water, Heritage and the Arts announced a ‘National day of action on cigarette butt litter’ to be promoted through local councils.5 The Victorian Litter Action Allianceiv has compiled a Litter Prevention Kit and encourages local municipalities to take action on butt litter.1 In 2007, Sustainability Victoriav launched a campaign to reduce butt litter timed to coincide with the banning of smoking in licensed premises.14 Through its National Litter Index, Keep Australia Beautiful gives prominence to the butt littering problem.15
The Tobacco Control supplement issue, The Environmental Burden of Cigarette Butts (May 2011, vol. 20), contains a collection of studies and commentaries on the cigarette butt littering issue. Many of these studies are cited in
i See http://www.kab.org.au/ii See http://cleanup.org.au/au/iii See http://www.buttlitteringtrust.org/iv An alliance comprising state and local government, industry and the community – see http://www.litter.vic.gov.au/www/html/20-home-page.aspv An organisation within the Government of Victoria. See http://www.sustainability.vic.gov.au/www/html/1722-who-we-are.asp
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this section, and the full text of the supplement can be accessed here: http://tobaccocontrol.bmj.com/content/20/Suppl_1.toc.
10.16.1
The tobacco industry’s response to tobacco litterExamination of internal tobacco documents has revealed that tobacco companies perceive cigarette butt waste as a vulnerability that tobacco control advocates might exploit. While the industry recognises it needs to be seen as addressing the problem, it cannot promote any messages that potentially criticise smokers or smoking itself. Industry techniques to reduce cigarette litter, such as anti-litter campaigns and giving away portable personal ashtrays and installing outdoor ashtrays, do not appear to have any positive, measurable effect on butt littering behaviour.16 The tobacco industry has failed to mitigate the impact of cigarette litter.17 Public health and community leaders should continue to focus on smoking cessation to reduce overall butt litter and consider more innovative solutions as outlined in Section 10.16.1.
The issue of tobacco-related litter has registered on the corporate responsibility agenda of the tobacco companies operating in Australia, but all distance themselves to some degree from the problem, making it clear that appropriate disposal of waste resulting from their products is not fundamentally their responsibility. Imperial Tobacco’s Corporate Responsibility Review 2007,18 declares that, ‘Consumers have a responsibility to properly dispose of their litter, whether this is cigarette butts, chewing gum, drinks’ cans, fast food containers or any other items. We believe the best approach to tackling cigarette litter is for key stakeholders, such as the tobacco industry, government, environmental bodies, business and local communities, to work together to educate and to encourage this’. On its international website, British American Tobacco likewise observes that ‘people cause litter’, but adds that it continues to research improved biodegradability of its products.19 Philip Morris engages less directly still, but does note on its international corporate website that out of concern for ‘the reduction of waste and of the environmental impact of our packaging’, it has reduced the weight of its cigarette packaging in Australia.20
In Australia, each of the tobacco companies has directly participated in anti-litter campaigns. In 2003, British American Tobacco Australia developed the Butt Littering Trust, and British American Tobacco Australia remains its sole source of funding. The stated intention of the Butt Littering Trust is ‘to be Australia’s recognised leading organisation on butt littering reduction and provider of Butt-Free Solutions to reduce cigarette butt littering’. Over the 60-plus programs it has funded, chiefly in partnership with local government authorities and the ‘Keep Australia Beautiful’ organisation, the Butt Littering Trust claims to have reduced butt litter by about 26%.2 Imperial Tobacco Australia21,22 and Philip Morris Australia23 have also jointly sponsored other butt littering reduction programs with ‘Keep Australia Beautiful’ in some states. Typically, support is in the form of providing funding and publicity materials including butt bins, posters, stickers and personal ashtrays.
The activities of the Butt Littering Trust have come under some scrutiny. Observers have pondered how an organisation that is entirely funded by a tobacco company can claim to be independent.24,25 Other factors leading to cynicism about the activities of the Butt Littering Trust and British American Tobacco Australia’s motivation for funding it concern the trust’s concentration of effort on community education about butt disposal, rather than taking a broader view about reducing tobacco use itself. Added to this, there is evidence that the trust has acted to further tobacco industry interests by lobbying against the ban of smoking in outdoor eating areas attached to cafés in at least one local government area.24 Funding anti-litter campaigns such as the Butt Littering Trust gives the tobacco industry the opportunity to gain some positive publicity, while keeping strict control of the messages smokers receive, and making useful local government connections along the way.
The Butt Littering Trust’s programs do not appear to have been effective. The New South Wales Department of Environment and Conservation commented in 2006 that ‘Cigarette manufacturers have largely limited their product stewardship activities to funding community education. They appear to consider that such funding fulfils their product stewardship obligations. However, the activities and projects funded have not translated into widespread reduction of cigarette butt litter. The impact of current activities funded by cigarette manufacturers has not delivered a reduction in butt littering’ (p21).23
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In addition to butt littering, the packaging of tobacco products is a source of waste and litter in Australia. All three of the Australian tobacco manufacturers belong to the Australian Packaging Covenant, a voluntary initiative by government and industry, with the aim of reducing the environmental effects of packaging on the environment. As part of the Australian Packaging Covenant reporting requirements, all three companies submitted action plans by 31 March 2011.26–28 This voluntary program could be strengthened through legislation that provides financial incentives and penalties to increase appropriate disposal and recycling of packaging, such as container deposit schemes, as has been endorsed for beverage containers.29
72 Tobacco in Australia:Facts and Issues
Section: 10.16.1Date of last update: 26 March 2012
References1. Victorian Litter Action Alliance. Litter Prevention Kit. Cigarette butts. Melbourne, Australia: Victorian Litter Action Alliance, 2007. Available from: http://www.litter.vic.gov.au/resources/
documents/Butt_Kit_Whole22_5_07.pdf
2. Butt Littering Trust. Size of the problem. Melbourne, Australia: Butt Littering Trust, 2009, [viewed 1 August 2011]. Available from: http://www.buttlitteringtrust.org/about-butt-littering/size.html
3. McGregor Tan Research. Keep Australia Beautiful National Litter Index. Annual report 2009-10, prepared for Keep Australia Beautiful National Association. Adelaide: McGregor Tan Research, 2010, [viewed 1 August 2011]. Available from: http://www.kab.org.au/files/NLI/NLI%20homepage/0910%20Reports/100923_4_mtr_nli_0910_report.doc
4. Clean Up Australia. Rubbish report 2010. Sydney: Clean Up Australia, 2010, [viewed 29 April 2008]. Available from: http://www.cleanup.org.au/download/cuad_rubbish_report_2010.pdf
5. Department of the Environment Water Heritage and the Arts. A national day of action on cigarette butt litter. Cigarette butt litter: facts and figures. Canberra, Australia: Department of the Environment, Water, Heritage and the Arts, 2007, [viewed 1 May 2008, no longer available]. Available from: http://www.environment.gov.au/settlements/waste/pubs/cigarette-litter-day-facts.pdf
6. Moerman JW and Potts GE. Analysis of metals leached from smoked cigarette litter. Tobacco Control 2011;20(suppl.1):i30-35. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i30.abstract
7. Slaughter E, Gersberg RM, Watanabe K, Rudolph J, Stransky C and Novotny TE. Toxicity of cigarette butts, and their chemical components, to marine and freshwater fish. Tobacco Control 2011;20(suppl. 1):i25-9. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i25.abstract
8. Novotny TE, Hardin SN, Hovda LR, Novotny DJ, McLean MK and Khan S. Tobacco and cigarette butt consumption in humans and animals. Tobacco Control 2011;20(suppl. 1):i17-20. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i17.abstract
9. Chapman S and Balmain A. Time to legislate for fire-safe cigarettes in Australia [Editorial]. Medical Journal of Australia 2004;181(6):292-3. Available from: http://www.mja.com.au/public/issues/181_06_200904/cha10373_fm.html
10. Schneider JE, Peterson NA, Kiss N, Ebeid O and Doyle AS. Tobacco litter costs and public policy: a framework and methodology for considering the use of fees to offset abatement costs. Tobacco Control 2011;20(suppl. 1):i36-41. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i36.abstract
11. Novotny TE, Lum K, Smith E, Wang V and Barnes R. Cigarettes butts and the case for an environmental policy on hazardous cigarette waste. International Journal of Environmental Research and Public Health 2009;6(5):1691–1705. Available from: http://www.mdpi.com/1660-4601/6/5/1691/pdf
12. Barnes RL. Regulating the disposal of cigarette butts as toxic hazardous waste. Tobacco Control 2011;20(suppl. 1):i45-8. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i45.abstract
13. Sawdey M, Lindsay RP and Novotny TE. Smoke-free college campuses: no ifs, ands or toxic butts. Tobacco Control 2011;20(suppl. 1):i21-4. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i21.abstract
14. Sustainability Victoria. Getting people to bin their butts. Melbourne, Australia: Sustainability Victoria, 2007, [viewed 12 February 2008]. Available from: http://www.sustainability.vic.gov.au/www/html/2597-campaign-tracking-and-results.asp?intSiteID=4
15. McGregor Tan Research. Keep Australia Beautiful National Litter Index. Annual report 2007-08, prepared for Keep Australia Beautiful National Association. Adelaide: McGregor Tan Research, 2008, [viewed 1 August 2011]. Available from: http://www.kab.org.au/files/NLI/NLI%20homepage/0910%20Reports/100923_4_mtr_nli_0910_report.doc
16. Smith EA and Novotny TE. Whose butt is it? Tobacco industry research about smokers and cigarette butt waste. Tobacco Control 2011;20(suppl. 1):i2-9. Available from: http://tobaccocontrol.bmj.com/content/20/Suppl_1/i2.abstract
17. Smith EA and McDaniel PA. Covering their butts: responses to the cigarette litter problem. Tobacco Control 2011;20(2):100-6. Available from: http://tobaccocontrol.bmj.com/content/20/2/100.abstract
18. Imperial Tobacco Group. Corporate website. Bristol, UK: Imperial Tobacco Group, 2008, [viewed 5 February 2008]. Available from: http://www.imperial-tobacco.com/index.asp
19. British American Tobacco Australia. About us. Maroubra, New South Wales: British American Tobacco Australia, 2011, [viewed 7 July 2011]. Available from: http://www.bata.com.au/group/sites/BAT_7WYKG8.nsf/vwPagesWebLive/DO7WYL8K?opendocument&SKN=1
20. Philip Morris International. Corporate website. New York: Philip Morris International, 2008, [viewed 8 January 2008]. Available from: http://www.philipmorrisinternational.com/pmintl/pages/eng/default.asp
21. Imperial Tobacco Group. Corporate responsibility review 2007. Bristol, UK: Imperial Tobacco Group, 2008, [viewed 1 May 2008]. Available from: http://www.imperial-tobacco.com/files/environment/cr2007/index.asp
22. Keep Australia Beautiful NSW. New South Wales has a big butt problem!!! [Media release]. Sydney: Keep Australia Beautiful NSW, 2007, [viewed 31 March 2008]. Available from: http://www.kabnsw.org.au/content/documents/Cigarette%20Butts%20Project%20MR.pdf
23. Department of Environment and Conservation NSW. NSW Extended Producer Responsibility Priority Statement 2005-06. Sydney: Department of Environment and Conservation NSW 2006, [viewed 30 June 2007]. Available from: http://www.environment.nsw.gov.au/resources/warr/2005624_prioritystatement2005_06.pdf
24. Chapman S. Butt clean up campaigns: wolves in sheep’s clothing? Tobacco Control 2006;15(4):273. Available from: http://tobaccocontrol.bmj.com/content/15/4/273.full
25. The Cancer Council New South Wales. The Butt Littering Trust. TAGLines May/June 2006. Sydney: The Cancer Council New South Wales, 2006, [viewed 5 May 2008]. Available from: http://www.cancercouncil.com.au/editorial.asp?pageid=303
26. British American Tobacco Australia. Australian packaging covenant action plan. Maroubra, New South Wales: British American Tobacco Australia, 2011, [viewed 08 August 2011]. Available from: http://www.packagingcovenant.org.au/documents/File/British%20American%20Tobacco%20Australia%20AP_11_15%281%29.pdf
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27. Philip Morris Australia. Australian packaging covenant action plan. Moorabin, Victoria: Philip Morris Australia, 2010, [viewed 08 August 2011]. Available from: http://www.packagingcovenant.org.au/documents/File/Philip%20Morris%20Limited%20AP_10_15.pdf
28. Imperial Tobacco Australia. Australian packaging covenant action plan. Baulkhan Hills, New South Wales: Imperial Tobacco Australia, 2011, [viewed 08 August 2011]. Available from: http://www.packagingcovenant.org.au/documents/File/Imperial%20Tobacco%20Australia%20Limited%20AP_11_16.pdf
29. Clean Up Australia. Why we need a container deposit scheme. Sydney: Clean Up Australia, 2011, [viewed 09 August 2011]. Available from: http://www.cleanup.org.au/au/Whatelsewesupport/why-do-we-need-a-container-deposit-legislation-.html
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10.17
Tobacco industry lobbying: overviewWhile in the market place the tobacco companies are fiercely competitive, when it comes to protecting their collective patch—preserving corporate viability—they have demonstrated strategic and financial collaboration at the highest level. In Australia and internationally, the tobacco industry has developed a comprehensive, multi-faceted, multi-level approach to defending its interests. This has included creating ways to undermine the credibility of the medico-scientific community and public health interests, developing networks of influence throughout the business community and the political world, permeating community interest groups and charities, and mobilising smokers, retailers, hoteliers, trade organisations and others whose interests overlap with those of the tobacco industry.
The capacity of the tobacco industry to interfere with tobacco control legislation has been identified as a major barrier to the introduction of health measures. In the WHO Framework Convention on Tobacco Control (WHO FCTC), Article 5.3 (which outlines the general obligations of members) states that, ‘In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law’.1i
At its third session in November 2008, the Conference of the Parties adopted guidelines for implementation of Article 5.3.2 Eight key areas are outlined for recommended action2:(1) Raise awareness about the addictive and harmful nature of tobacco products and about tobacco industry
interference with Parties’ tobacco control policies.(2) Establish measures to limit interactions with the tobacco industry and ensure the transparency of those
interactions that occur.(3) Reject partnerships and non-binding or non-enforceable agreements with the tobacco industry.(4) Avoid conflicts of interest for government officials and employees.(5) Require that information provided by the tobacco industry be transparent and accurate.(6) Denormalise and, to the extent possible, regulate activities described as “socially responsible” by the tobacco
industry, including but not limited to activities described as “corporate social responsibility”.(7) Do not give preferential treatment to the tobacco industry.(8) Treat State-owned tobacco industry in the same way as any other tobacco industry.
Analyses of tobacco industry interference tactics, based on many years of observation and research, have been published, such as those by Sweda and Daynard,3 Saloojee and Dagli4 Trochim et al5 and the National Cancer Institute (US).6 The 2009 WHO report, Tobacco Industry Interference in Tobacco Control,7 summarises these various tactics; see Table 10.17.1.
The following sections discuss some of the ways in which the industry has worked towards its goals. The subject has been extensively explored in the medical and public health literature and references cited in the following pages provide the interested reader with a wealth of further information. Several commentators have concluded that systematic and rigorous monitoring of these activities is an essential first step in countering industry interference in tobacco control.8–10
10.17.1
Freedom of choice argumentsThe term ‘nanny state’ applied to either health groups or governments is a favourite cliché used by tobacco industry and its allies to oppose further regulation.11 ‘Labelling arguments as “nanny statist” is a form of ad hominem attack that aims not to expose the limitations of a position, but to discredit the individual advancing that argument.’12 The preferred counter frame of opponents of the ‘nanny state’ is ‘freedom of choice’. In August 2011, an entire Australian political party was launched on the premise of ‘freedom of choice’: The Tobacco and Alcohol Party of
i Of course, the Framework Convention on Tobacco Control has itself been the object of intense tobacco industry lobbying. See Section 10.20.2.3.
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Australia. This party ‘objects to nanny state politics’ and was formed to act as a ‘voice for choice’ for consumers. No statistics are publicly available on the number of members recruited or any financial support that has been received from donors, but the official Facebook page for the party only had 31 members as of 16 August 2011.
Proponents of government intervention to protect and support health recognise that individual choices do not happen in a vacuum but are heavily influenced by the environment in which they are made. Regulation of the environment can assist individuals to be freer to make their own choices.12 The state can help to create an environment that empowers people to make their own choices. This is particularly true in the case of tobacco, where the industry acts aggressively, through persuasive marketing and product development, to recruit new consumers and keep existing ones.13
The tobacco industry and its supporters seek to portray themselves, not as profit seekers, but as defenders of fundamental freedoms. They use ‘freedom of choice’ arguments to enlist the support of civil libertarians, media interests and the business community against any regulation of smoking and tobacco promotion.14 Freedom of choice arguments shift the blame and full responsibility for complex public health issues on to the shoulders of individuals in order to negate the role that the industry plays in fostering unhealthy behaviours. Table 10.17.2 outlines the common arguments used by ‘freedom of choice’ advocates.
Table 10.17.1 Tobacco industry interference in tobacco control summary of tactics
Tactic GoalIntelligence gathering To monitor opponents and social trends in order to anticipate future challenges
Public relationsTo mould public opinion, using the media to promote positions favourable to the industry
Political funding To use campaign contributions to win votes and legislative favours from politiciansLobbying To make deals and influence political processesConsultancy programme To recruit supposedly independent experts critical of tobacco control measuresFunding research—including universities
To create doubt about existing evidence of the health effects of tobacco use
Smokers’ rights groups To create an impression of spontaneous, grass roots public support
Creating alliances and front groupsTo mobilise farmers, retailers, advertising agencies, the hospitality industry, ‘grass roots’ and anti-tax groups with a view to influencing legislation
IntimidationTo use legal and economic power as a means of harassing and frightening opponents who support tobacco control
Philanthropy To buy friends and social respectability from arts, sports and cultural groups
Corporate social responsibilityTo promote voluntary measures as an effective way to address tobacco control and create illusion of being a ‘changed’ company and to establish partnerships with health interests
Youth smoking prevention and retailer education programs
To appear as being onside with efforts to prevent children from smoking and to frame smoking as an adult choice
Litigation To challenge laws and intimidate tobacco industry opponents
SmugglingTo undermine tobacco excise tax policies and marketing and trade restrictions and thereby increase profits
International treaties and other international instruments
To use trade agreements to force entry into closed markets and to challenge the legality of proposed tobacco control legislation
Joint manufacturing and licensing agreements and voluntary policy agreements with governments
To form joint ventures with state monopolies and subsequently pressure governments to privatise monopolies
Pre-emption To overrule local or state level of government by taking away its power to act
Source: World Health Organization, 20097
Table 10.17.2 Freedom of choice arguments and the tobacco control counter arguments 12, 14, 15
Freedom of choice arguments Tobacco control responseSmoking is an adult choice Most people start smoking when they are childrenQuitting smoking is easy, people will quit if they no longer wish to smoke
Smoking is addictive and most smokers regret ever starting and face difficulties when quitting
Tobacco is a legal productIf the risks were known when tobacco was first introduced on the market it would not have been legal to sell it
People are well aware of the health and risks of addiction and choose to smoke anyway
Most smokers underestimate the health risks and become addicted as children; the tobacco industry actively hid the truth about the health risks from the public
To preserve individual liberty, both smokers and non-smokers should be accommodated in public places; banning smoking is unnecessary
Secondhand smoke is harmful to non-smokers and the two most vulnerable groups—children and employees—have no choice about whether or not they are exposed
Education on the harms is the best option and then people can chose for themselves whether or not to smoke
Education alone has very little impact on smoking rates and unless accompanied by regulation could lead to greater disparity, concentrating smoking further in the most disadvantaged populations
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10.17.2
Economic importance of the industryAnother common argument perpetuated by the tobacco industry and its allies is that the tobacco business is a vital contributor to the health of economy. Warner has outlined the common economic myths circulated by the industry and has also provided a counter summary of the economic realities.16 See Table 10.17.3 for a summary of the tobacco industry economic myths.
One of the most important economic considerations in tobacco control is that, ‘tobacco inflicts a greater harm among disadvantaged groups’.19 Smoking is both a contributor to and a consequence of poverty and disadvantage. Policies and interventions focusing on smoking prevention and cessation among the poor are an important component of national and international tobacco control.19 The imbalance between the tobacco industry’s economic strength and the typically low political power of public health authorities in low and middle countries emphasises that focusing on the most disadvantaged must be a global effort.20
Table 10.17.3 Tobacco economic myths versus reality16
Tobacco industry economic myth Economic realityWithout the cultivation of tobacco, manufacture of tobacco products and distribution and sale of products, a country’s economy will suffer devastating economic consequences. Jobs will be lost, incomes will fall, tax revenues will plummet and trade surpluses will veer dangerously in the direction of deficits.
The myth in the tobacco industry’s economic importance argument is that a significant economic presence necessarily implies significant economic dependence. Implicit in the industry’s argument is the notion that a decline in tobacco economic activity will entail a comparable decline in the economy. However, when resources are no longer devoted to a given economic activity, they do not simply disappear into thin air; rather they are redirected to other economic functions.•
Specific tobacco control policies will cause severe economic hardship in specific non-tobacco industries—especially smoking bans in hospitality.
Empirical analyses have found this to be patently false and smoking bans may in fact be bring economic benefits to the hospitality sector.17
A large tax increase is undesirable because it will reduce government revenues by decreasing legal cigarette sales. This will result from decreased smoking and increased smuggling of lower priced cigarettes from neighbouring countries.
While smokers are price sensitive, they are not sensitive to the degree suggested by this argument. For all politically feasible tax increases, revenue increases would be expected in nearly every country in the world, at least for some period of years. Smuggling claims are greatly exaggerated by the industry18. In any event, smuggling can be successfully combated through better and more complete record keeping, the use of prominent tax stamps, increased penalties for violation of the law, vigorous enforcement of the law, and the banning of in-transit trade.
Even if a tax increase would raise government revenues and decrease smoking, it is fundamentally unfair because its burden would fall disproportionately on the poor.
A given tobacco tax typically will be distributed regressively. A tax increase, however, may not be regressive. This can result because the poor are typically considerably more responsive to price changes than are the affluent. Legislators can reduce concerns about inequity by dedicating some portion of the revenues from the increased tax to assist low income smokers to quit.
• Asmallnumberofcountries,includingmostnotablyMalawi,aresodependentontobaccothatanysubstantialdeclinesintheirtobaccoindustrieswouldrepresentagenuineshocktotheireconomies:see Section 10.15 on ethical farming for more information.
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References1. WHO Framework Convention on Tobacco Control. Geneva: World Health Organization, 2003. Available from: http://www.who.int/tobacco/framework/en/
2. WHO Framework Convention on Tobacco Control Conference of the Parties. Elaboration of guidelines for implementation of Article 5.3 of the Convention. Geneva: World Health Organization, 2008. Available from: http://www.who.int/fctc/guidelines/article_5_3/en/index.html
3. Sweda EL, Jr and Daynard RA. Tobacco industry tactics. British Medical Bulletin 1996;52(1):183-92. Available from: http://bmb.oxfordjournals.org/cgi/reprint/52/1/183
4. Saloojee Y and Dagli E. Tobacco industry tactics for resisting public policy on health. Bulletin of the World Health Organization 2000;78:902-10. Available from: http://www.who.int/bulletin/archives/78(7)902.pdf
5. Trochim WMK, Stillman FA, Clark PI and Schmitt CL. Development of a model of the tobacco industry’s interference with tobacco control programmes. Tobacco Control 2003;12(2):140-7. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/2/140
6. Fox B, Bialous S, Trochim W, Stillman F and C S. Chapter 8. Evaluating tobacco industry tactics as a counterforce to ASSIST. Evaluating ASSIST: a blueprint for understanding state-level tobacco control. Bethesda, Maryland: Department of Health and Human Services, National Institutes of Health, National Cancer Institute, 2006;Available from: http://cancercontrol.cancer.gov/tcrb/monographs/17/m17_complete.pdf
7. World Health Organization. Tobacco industry interference with tobacco control. Geneva: WHO, 2009, [viewed 14 August 2011]. Available from: http://whqlibdoc.who.int/publications/2008/9789241597340_eng.pdf
8. Morabia A and Costanza MC. Let’s Not Have to Hear It through the Grapevine. Preventive Medicine 2009;48(suppl. 1):S1-2. Available from: http://www.sciencedirect.com/science/article/pii/S0091743509000036
9. Cruz TB. Monitoring the tobacco use epidemic IV. The vector: tobacco industry data sources and recommendations for research and evaluation. Preventive Medicine 2009;48(suppl.1):S24-34. Available from: http://www.sciencedirect.com/science/article/pii/S0091743508005136
10. Stillman F, Hoang M, Linton R, Ritthiphakdee B and Trochim W. Mapping tobacco industry strategies in South East Asia for action planning and surveillance. Tobacco Control 2008;17(1):e1. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/17/1/e1
11. Daube M, Stafford J and Bond L. No need for nanny. Tobacco Control 2008;17(6):426-7. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/17/6/426
12. Hoek J. Public health, regulation and the nanny state fallacy. Conference paper. Partnerships, Proof and Practice – International Nonprofit and Social Marketing Conference 2008, University of Wollongong, 15–16 July 2008. Wollongong, Australia: University of Wollongong Research Online, 2008. Available from: http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1001&context=insm08
13. Bayer R and Kelly M. Tobacco control and free speech - an American dilemma. The New England Journal of Medicine 2010;362(4):281–3. Available from: http://content.nejm.org/cgi/content/full/362/4/281
14. Advocacy Institute. Smoke signals. The Tobacco Control Media Handbook. Washington: The Advocacy Institute, unknown year, [viewed 16 August 2011]. Available from: www.strategyguides.globalink.org/docs/smoke_signals.doc
15. Chapman S. Public Health Advocacy and Tobacco Control: Making Smoking History. Oxford: Blackwell, 2007.
16. Warner KE. The economics of tobacco: myths and realities. Tobacco Control 2000;9(1):78-89. Available from: http://tobaccocontrol.bmj.com/content/9/1/78.short
17. Scollo M, Lal A, Hyland A and Glantz S. Review of the quality of studies on the economic effects of smoke-free policies on the hospitality industry. Tobacco Control 2003;12(1):13. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/1/13
18. Chapman S. British American Tobacco report: more holes than a sieve. Croakey. Sydney: crikey.com.au, 2010, [viewed 16 August 2011]. Available from: http://blogs.crikey.com.au/croakey/2010/02/08/british-american-tobacco-report-more-holes-than-a-sieve/
19. World Health Organization. Systematic review of the link between tobacco and poverty. Geneva: WHO, 2011, [viewed 16 August 2011]. Available from: http://whqlibdoc.who.int/publications/2011/9789241500548_eng.pdf
20. Bump JB, Reich MR, Adeyi O and Khetrapal S. Towards a political economy of tobacco control in low- and middle-income countries. Health, nutrition and population (HNP) discussion paper. Washington, DC: World Bank, 2009, [viewed 16 August 2011]. Available from: http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/PoliticalEconTobaccoFINAL.pdf
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10.18
Tobacco industry lobbying: the tools10.18.1
Tobacco industry-sponsored consultantsThe tobacco industry has long seen the advantage in financing and helping promote publicity for outspoken, media-savvy scientists who are prepared to challenge accepted views on smoking and health or various aspects of tobacco control, while appearing to be independent. Cooperation between the tobacco companies on a global scale has ensured that competent tobacco industry spokespeople have been shared.1-3 In Australia, it has been documented that at least nine visiting industry-sponsored scientists gained substantial publicity between 1969 and 1979, promoting a range of industry-friendly views debunking the health evidence about smoking. Over the years the views of these individuals were widely reported, often uncritically, by the news media. It is probable, given the timing and content of some of these publicity initiatives, that tobacco industry consultants adversely influenced the course of tobacco control initiatives in those early days.1
In the late 1970s and into the 1980s, the Australian tobacco industry cultivated a home-grown dissenter, Sydney general practitioner Dr William Whitby, who self-published two books (Smoking Is Good for You and The Smoking Scare De-Bunked). Although there is evidence that the industry recognised that Dr Whitby’s particular brand of pro-smoking fanaticism might pose a liability, it provided the means for his views to be widely disseminated and Whitby’s works were retained in the armoury of international tobacco circles well into the 1990s.2
The tobacco industry adopted similar techniques in efforts to subvert the accumulating medical evidence on secondhand smoke, as well as deflecting attempts to introduce bans on tobacco advertising and other forms of regulation of tobacco products in Australia and internationally. For example, Philip Morris and other international companies collaborated to promote the views of scientists holding views on secondhand smoke counter to those of mainstream health authorities throughout Asia, Europe and the US during the 1980s and 1990s.3-7 During the 1980s British American Tobacco ‘ghost-wrote’ reports for JJ Boddewyn, which were published by the International Advertising Association, designed to counter bans on tobacco advertising.8 The Boddewyn reports on advertising were widely circulated internationally (including in Australia9) and formed the basis of industry campaigns to oppose advertising bans.
Contemporary examples of high-profile tobacco industry-funded consultants include Patrick Basham and John Luik of the Democracy Institute. Basham directs the Washington and London-based Democracy Institutei and is a Cato Instituteii adjunct scholar. Basham and Luik have published reports11 and newspaper editorial critiques12 of plain packaging legislation. In June 2011, Luik and Basham made a submission to Australia’s public consultation on plain packaging, primarily arguing that there is little evidence the legislation will reduce smoking and that it is a violation of intellectual property laws.13 Basham was funded by Philip Morris in August 2011 to visit New Zealand in order to discourage the government from following Australia’s lead in developing plain packaging legislation.14
10.18.2
Tobacco industry-affiliated research foundationsOn several occasions up until the mid-1990s the industry established pseudo-scientific research foundations designed to give credibility to the notion that there remains controversy about the medical evidence on smoking on health. Funding research organisations has also allowed the tobacco industry to:5, 15-17
< reap a public relations advantage from financing (apparently) independent research on smoking < demonstrate its disagreement that smoking causes disease while appearing committed to finding ‘solutions’
i http://www.democracyinstitute.org/Home.htmii http://www.cato.org/ The Cato Institute has a history of accepting funds from tobacco industry donors including Altria and RJ Reynolds.10
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< support research likely to produce outcomes advantageous to industry objectives, (including ‘inconclusive’ research showing that yet more research is needed)
< suppress negative research < provide an excuse for ongoing delays in regulation or legislation < locate and foster credible public spokespeople with the appearance of independence < offer smokers reassurance < keep in the public eye ‘distraction’ or ‘diversionary’ research (which, for example, places emphasis on air pollution or sick buildings) to deflect attention from tobacco.
Generally research foundations of this nature were given official sounding names that betrayed no connection between the organisation and its financial backers. The organisations funded in-house research, and acted as funding agencies that provided grants to other groups, with or without obvious tobacco connections.
The first industry research group, established in the US in 1954, was the Tobacco Industry Research Council (later the Council for Tobacco Research), which promoted the industry’s ends for more than 40 years until its closure under the terms of the Master Settlement Agreement in 1998.16 As an antidote to concerns regarding secondhand smoke, the industry established the Center for Indoor Air Research to fund projects that would support industry resistance to smokefree regulations.5
The Master Settlement Agreement-mandated closure of multi-company cooperative research and lobbying organisations has lead to the sprouting of a new crop of organisations post-settlement, including the Institute for Science and Health (funded by British American Tobacco and Brown & Williamson), the Philip Morris-connected Life Sciences Research Office,18 and the Philip Morris External Research Program. A critical analysis of the first round of projects funded by the Philip Morris External Research Program shows that foci of the program’s interest were projects that would deliver findings likely to support Philip Morris’ corporate aims. An added bonus was using the program as a vehicle for identifying cooperative scientists, as well as gaining credibility and goodwill.16.
Other groups have been established to divert attention and trivialise smoking in ways appealing to the popular media. In the early 1990s the Advancement of Sound Science Coalition, funded by Philip Morris, purported to be a grassroots coalition of people fed up with health scares and ‘junk science’.19 Associates for Research into the Science of Enjoyment (ARISE) claimed to be an affiliation of independent scientists but was actually substantially funded by several tobacco companies. ARISE’s brief was to show how ‘everyday pleasures, such as eating chocolate, smoking, drinking tea, coffee and alcohol, contribute to the quality of life’.20
Internal tobacco industry document research continues to expose global examples of tobacco industry funding of research institutes to refute secondhand smoke concerns,21, 22 question the evidence and legality of tobacco control reforms, and build alliances.23
10.18.3
Australian-based organisationsThe Australian Tobacco Research Foundation (ATRF) opened for business in 1970, the joint creation of the three major tobacco companies operating at the time (WD & HO Wills, Rothmans and Philip Morris), which shared its funding and oversaw its governance. Although criticised from the start for its overt mission of forestalling tobacco regulation and widespread cynicism that it would contribute to robust, impartial research, the ATRF fulfilled a useful PR function for the following two decades, chiefly by providing evidence that the Australian tobacco companies supported independent medical research.15 The ATRF entered terminal decline in 1988, when, in response to building criticism from health interests about the shared interests of and blurred organisational boundaries between the ATRF and the tobacco companies, the entire scientific advisory committee of the ATRF wrote to the Medical Journal of Australia declaring its unanimous agreement that smoking caused disease.24 Negative publicity, compounded by increasing rejection of tobacco research money by the medico-scientific community, lead to the scaling down and eventual closure of the ATRF in 1994.15
Meanwhile the industry was engaged against secondhand smoke through the offices of another seemingly independent organisation. In 1987 the Tobacco Institute of Australia facilitated the establishment of a local offshoot
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of the US-based Air Conditioning and Ventilation Associates Atlantic, which came to be known as Healthy Buildings International.25 Its brief was to promote the tobacco industry view that the evidence about secondhand smoke was inconclusive; that secondhand smoke is a minor issue in the context of overall indoor air quality; and concerns about smoking indoors could be adequately met with appropriate ventilation and by providing smoking areas.i Healthy Buildings International gained a high public profile, achieving extensive media coverage and a wide professional audience for its views, while always asserting its status as an independent organisation.25 During the 1990s Healthy Buildings International gained membership on an advisory committee charged with revising Australian Standards for indoor air, a position which allowed it to influence the committee’s recommendations, as well as keep Philip Morris abreast of developments, until Healthy Buildings International was exposed and its position on the committee terminated in 2002.15ii
In 2002, the Institute of Public Affairs admitted to receiving tobacco industry funding. In 2010, during interviews following the Federal Government’s plain packaging legislation announcement, Tim Wilson (an Institute of Public Affairs employee) refused to clarify if the Institute of Public Affairs currently received tobacco industry funding, simply stating that ‘any funding has no impact on the policy positions we take whatsoever’. The official Institute of Public Affairs response to the funding question was that, ‘the IPA does not disclose its membership list. However, members are welcome to disclose their membership of the IPA’. When ABC Media Watch approached the three Australian tobacco companies, Imperial Tobacco responded stating it did not currently nor had it in the past provided funding to the Institute of Public Affairs. British American Tobacco Australia responding by stating that, ‘any such arrangements are commercial in confidence’ and Philip Morris International
gave a similar reply: ‘we do not disclose the details of these relationships’.26
10.18.4
Tobacco industry-funded research in academic institutionsAs discussed in Section 10.18.2 above, the industry has used its own funding bodies, their connection with the industry often obscured, as a conduit for distributing money into mainstream universities and other research institutes.
Over the years, acceptance of tobacco industry funding has been widespread in Australia27 and globally,17 generating rafts of studies with findings beneficial to the tobacco industry. In turn, this research has permeated the peer-reviewed medical press. For example, in 2005 Philip Morris provided the funding for an Israeli study into the determinants of uptake of smoking in young women,28 which examined the influences of genetics, environment and psychological characteristics. Critics pointed out that the study neglected to include the possible impact of tobacco advertising.29 The successful infiltration by the tobacco industry of reporting of published research in Germany has been credited with serving the industry’s interests of increasing the social acceptability of smoking and undermining tobacco control initiatives in that country.30 Prominent researchers at Weill Cornell Medical College caused controversy in 2008 when it became public that they had earlier accepted grants channelled through a tobacco-funded organisation called the Foundation for Lung Cancer: Early Detection, Prevention and Treatment, and that findings from this research31 had been published in mainstream medical press without disclosure of tobacco funding.32
As well as providing funding to individual scientists or departments, in some cases tobacco companies have established entire programs within universities. For example, Philip Morris has funded the Center for Nicotine and Smoking Cessation Research within Duke University’s Nicotine Research Project (in Richmond, Virginia).33 In 2002, in an audacious move that might be funny were it not so cynical, the University of Nottingham accepted funding from British American Tobacco to establish the International Centre for Corporate Social Responsibility,iii invoking, according to one observer, ‘the ethics of the cash register’34(see Section 10.11 for more discussion on the tobacco industry and corporate social responsibility).
i Sick building syndrome is discussed further in Chapter 3, Section 25.ii However Healthy Buildings International remains a commercial entity and on its website it continues to downplay the contribution of secondhand smoke to indoor pollution. See: http://
www.hbi.com.au/smokepol.htmliii See: http://www.nottingham.ac.uk/business/ICCSR/about/FoundationofTheICCSR.html
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To accept or refuse tobacco funding clearly raises important ethical questions. Arguments against accepting tobacco grants include that:17, 35, 36
< it is unethical that profits earned by the companies’ manufacturing and marketing tobacco, the cause of many of the conditions against which medical and health workers are fighting, should be used for medical research
< even in an environment of limited funding for research, scientists must ask whether the value of their research outweighs its utility in furthering the corporate interests of the tobacco industry
< it lends credibility to industry claims that there is insufficient evidence to conclude that smoking (or secondhand smoke) is a cause of disease, and bolsters the industry ‘furphy’ that ‘more research is needed’
< it improves the corporate image of the industry to be seen to be involved in apparently altruistic activities and associated with respected scientists and institutions, and can provide leverage in wider policy-setting scenarios
< those in receipt of tobacco money may feel constrained about what they say publicly about health and smoking; tobacco funding may therefore silence a potentially influential and articulate opponent
< accepting money from a source with so clear a vested interest may lead to a biased research program, biased results and biased reporting
< even the requirement for researchers to divulge the sources of their funding may not expose underlying tobacco finance, which is often well concealed
< reliance on funds of tobacco origin leads to ‘institutional addiction’, in which organisations dependent on tobacco money become unwilling to bite the hand that feeds them.
On the other hand, those who argue in favour of accepting research funding from tobacco companies contend that:17, 37
< what is at issue is the quality of the work, not the origins of the funding < appropriate firewalls and safeguards will ensure the research is conducted without bias < any benefits the tobacco industry might gain in corporate image are minor compared to the potential public health benefits that may accrue from the research
< the peer review process ensures validity < requirements for disclosure alerts the reader to any conflict of interest and makes the findings even more subject to scrutiny
< funding research is a useful purpose for industry profits.
In June 2004, Cancer Research UK and Universities UK agreed to a protocol that contains guidelines for institutions considering accepting tobacco funding.38 Cancer Research UK is the leading provider of research funding into cancer in the UK, and has a strict policy of avoiding any direct or indirect links with the tobacco industry.39 Cancer Research UK has stated that it will not fund research in a university where there is the possibility that there could be any association with work funded by a tobacco company. The cancer charity also states that it considers it has a duty to publicly criticise a university that accepts tobacco donations. For its part, Universities UK has stated that while it is up to individual universities to decide which funding they should accept, they ‘should normally reveal the source of funds for research and should satisfy themselves that their reputation for impartiality, integrity and disinterested inquiry will not be compromised by any particular source of funds’ (p6).39 In the US, several schools of public health and of medicine (including Harvard University, Emory University, the University of California and Johns Hopkins University) have policies prohibiting acceptance of tobacco funding.40 In Australia, there is no over-arching agreement between universities but many have adopted policies governing or prohibiting the acceptance of tobacco money.41i
Given the scarcity of research dollars, a group of researchers, Cohen et al, have proposed assessment criteria and models that could be used to potentially illuminate the criticisms and problems associated with accepting tobacco industry funding for research.42 They propose the following eight criteria to evaluate four funding models:1 Transparency and independence2 Competitive funding process3 Ownership of data and freedom to publish
i Further information regarding the policies of Australian universities are in the article supplement; see: http://jech.bmj.com/cgi/data/58/5/361/DC1/3
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4 Independent research agenda5 Governance6 Protection against conflict of interest7 Industry public relations gains that counteract public health8 Feasibility.
The four models assessed were: 1) a dedicated tobacco tax or manufacturer license fee (legislation), 2) legally mandated contributions from tobacco companies (court ordered), 3) voluntary tobacco company contributions administered through an independent third party, and 4) voluntary tobacco company contributions direct to academic institutions. In their evaluation of the four funding models they conclude that there is no perfect model that scores well in every area. Overall, the most feasible models (3 and 4) were the ones deemed least acceptable to the public health and tobacco control communities.42
10.18.5
Establishment of international manufacturers’ and growers’ organisationsFor many years the tobacco industry has recognised that it needs to present a unified front against the tobacco control coalitions. In the late 1970s, at the instigation of Imperial Tobacco in the UK and Philip Morris International, a coalition of tobacco company executives from major companies operating in the UK, the US and Europe was formed with the shared purpose of defending the tobacco industry against attack and championing the ‘social acceptability’ of smoking. To this end, the manufacturers agreed to cooperate in perpetuating the ‘controversy’ over smoking and health and to maintain that there was no proven causal link between smoking and lung cancer.43 This industry group, which operated under conditions of utmost secrecy, was to become known as the International Committee on Smoking Issues and, in 1981, INFOTAB. Its brief soon extended beyond orchestrating the international smoking and health controversy. INFOTAB acted as a ‘hub’ for the industry’s national manufacturing organisations, tobacco companies and leaf dealers, facilitating the exchange of information and expertise. Up until it ceased operation in 1990‒1991, INFOTAB provided its membership (including the Australian national manufacturing organisation: the Tobacco Institute of Australia) with:44
< up-to-date information databases < media monitoring < relevant publications and reports < pro-industry scientific findings < resources and programs ready to implement < reports on tobacco control activities < responses to public health activities < litigation updates.
In 1992, a new organisation—the Tobacco Documentation Centre (now operating under the name International Tobacco Documentation Centrei)—was established and continues to fulfil some of the former roles of INFOTAB, chiefly information sharing.45 A second organisation, Agro-Tobacco Services, was set up in the same year to coordinate and support the International Tobacco Growers’ Association (discussed below). Agro-Tobacco Services was subsequently replaced by a UK-based public relations firm called Hallmark Marketing Services.45ii
The International Tobacco Growers’ Association was founded in 1984, ‘with the objective of presenting the cause of millions of tobacco farmers to the world’.iii Among its activities, the International Tobacco Growers’ Association facilitates contact among its members, shares non-competitive information, represents its membership to national
i There is no webpage for the centre, but basic company information can be found here: http://www.companycheck.co.uk/company/FC016520ii McDaniel et al provide a detailed account of the activities of the International Committee on Smoking Issues, INFOTAB, Agro-Tobacco Services and Hallmark Services.45
iii See: www.tobaccoleaf.org
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and international policy-makers, and defends tobacco farmers against national and international anti-tobacco growing campaigns.
Despite its claims of independence from the manufacturing industry, internal industry documents show that the International Tobacco Growers’ Association has been used very much as a lobbying front for the international tobacco companies, representing its combined interests and ‘managing’ tobacco issues in representations to the World Health Organization, the Food and Agriculture Organisation and other bodies.45-47
The International Tobacco Growers’ Association’s website stoutly defends tobacco farmers against environmentalists’ claims that tobacco farming has caused deforestation (see Section 10.14.1). The association also discusses its connection with the Eliminating Child Labour in Tobacco Foundation and its commitment to combating child labour (see Section 10.15.1).
10.18.6
Australian manufacturers’ organisations
10.18.6.1
Tobacco Institute of AustraliaThe now inactive Tobacco Institute of Australia (TIA) was the main locus for tobacco industry lobbying in Australia from its inception in 1978 until the late 1990s.44i Established as a national manufacturers’ association in response to growing negative publicity about smoking, the TIA was jointly funded by the tobacco companies operating in Australia at the time with a charter to ‘promote understanding of the tobacco industry in Australia’.48 The TIA did this chiefly by representing its member companies to the public, the government and other authorities and through negotiating policy issues on behalf of its constituency. In effect, the TIA’s major roles were to lobby against tobacco control measures, to present a united public face of the Australian tobacco industry wherever needed, and to sow seeds of doubt and denial about the health effects of smoking and other matters of ‘controversy’.ii Through its alliance with INFOTAB and other national manufacturers’ organisations (particularly the US Tobacco Institute),44 the TIA and its membership were also kept abreast of tobacco issues worldwide.
In her analysis of the workings of the TIA, Carter has divided the TIA’s 20 years of activity into four distinct chapters.44 In its first six years, the TIA’s work was primarily involved with networking and promoting tobacco industry views on smoking and health, advertising and children, secondhand smoke, and the tobacco industry’s financial importance. Its second phase, from 1983 until 1989, was marked by aggressive advocacy, mostly under the stewardship of chief executive officer John Dollisson. The TIA’s court case (and eventual bruising loss) against the Australian Federation of Consumer Organisations brought this chapter to a close, after which the TIA entered five difficult years of transient leadership, fractured support and apparent demoralisation. In the TIA’s final phase, from 1994 to 1997, it was staffed by lawyers and its approach to public affairs became more disciplined and pro-active.
In its heyday, the TIA ran high-profile media campaigns to promote its views, the main focus being secondhand smoke. In 1985 the TIA lodged a four page ‘advertorial’ spread in the Australian Women’s Weekly. The advertisement purported to represent the facts about passive smoking and in layout it appeared to be a feature article typical of the weekly. The TIA’s association with the advertorial appeared in small print at the end of the piece, ‘inserted in the interests of fair and open discussion by the Tobacco Institute of Australia Ltd’. The information on passive smoking provided in the advertisement was at odds with mainstream medical and scientific findings reported at the time. In response to complaints, the TIA’s advertisement was deemed by the Advertising Standards Council to be misleading in presentation (in that it was inadequately identified as paid advertising material) but no ruling was made on its content, this being outside the Advertising Standards Council’s remit.
i For a detailed account of the activities of the TIA over its 20-year lifespan, refer to Carter.44
ii To read, view and hear a collation of public statements made by tobacco industry executives and officers from the TIA dismissing the impact of smoking on health, visit http://tobacco.health.usyd.edu.au/site/supersite/resources/docs/gallery_leaders.htm and http://tobacco.health.usyd.edu.au/site/supersite/resources/docs/diary_of_denial.htm
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Two half-page newspaper advertisements were devised and lodged by the TIA in July of the following year, again defending the industry against claims regarding secondhand smoke. The advertisements appeared in 14 newspapers across Australia. The advertisements selectively quoted a number of sources, including the World Health Organization and the American Cancer Society, giving the impression that these bodies did not support the view that passive smoking is harmful to health. Among other things, one of the advertisements declared that ‘there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers’.49 Again, in response to complaints made to the Advertising Standards Council and the Trade Practices Commission, the TIA was reprimanded. The issue was subsequently taken up by the Australian Federation of Consumer Organisations, which brought a case against the TIA in the Federal Court, on the grounds that the newspaper advertising was misleading or deceptive and therefore in contravention of Section 52 of the Trade Practices Act 1974. In a groundbreaking decision handed down by Justice Morling, the Australian Federation of Consumer Organisations won the case, and the TIA lost an appeal it subsequently brought against the decision. AFCO v. TIA resulted in a landmark decision of international significance, in which a link between passive smoking and disease among non-smokers was accepted by a court of law.i And in an outcome which could hardly have been worse for the TIA, the Morling decision gave legal impetus to the surge towards smokefree workplaces.
10.18.6.2
Tobacco Information CentreThe Sydney-based Tobacco Information Centre was established in December 1996 by Rothmans of Pall Mall (Australia), WD & HO Wills (Australia) and Philip Morris (Australia), ‘as a library of tobacco and smoking-related information’.50 According to its publicly stated brief, the Tobacco Information Centre’s function was to ‘provide current, timely and high-quality tobacco-related information to Australia’s three tobacco companies’, as well as to government bodies, politicians, industry and trade organisations, special interest groups and members of the public. The Tobacco Information Centre categorically denied that it had any role in undertaking political lobbying, public affairs work or media liaison on behalf of its funding members.50
The Tobacco Information Centre published a tobacco industry fact newsletter; another newsletter (Peace Pipe), which reported on ‘current smoking issues’; and a number of fact sheets.50 The Tobacco Information Centre no longer appears to be active.
10.18.7
Smokers’ rights groupsSmokers’ rights groups provide a further conduit for tobacco industry lobbying by claiming to represent the views of the smoker. They are intended to mobilise smokers, offering them reassurance and providing a vehicle by which they can voice opposition to tobacco control measures.51 Primarily arising in response to moves to restrict smoking in public places, smokers’ rights groups also address issues such as tobacco taxes. Smokers’ rights groups typically portray their membership as the beset-upon smoker, indulging in a legal behaviour, being unreasonably harassed by over-zealous ‘anti’s’.
Early Australian examples of smokers’ rights groups include the Smokers’ Rights League in the late 1970s,51 and FOREST (Freedom Organisation for the Right to Enjoy Smoking Tobacco), which was established in Victoria during the mid-1980s in response to concerns about secondhand smoke. Smokers were told that ‘by supporting FOREST you can support the interests of all smokers in Australia. You can have your say with State and Federal Governments, transport operators, advertisers, newspapers, radio and television and, through FOREST, you can let them all know you are tired of being pushed around…’.52 Fair Go began in New South Wales in the late-1980s with the brief of countering bans on smoking in New South Wales trains, before moving on to a broader canvas of smokers’ concerns.51 The Tobacco Smokers Freedom Movement emerged in Western Australia in 1993, offering cigarettes at discount prices and stating its intention to lobby on behalf of smokers’ rights.52 The extent of the relationship between the tobacco industry and these Australian groups was never clarified, but overseas experience
i For a full account of this court case as well as transcripts of the judgement, see Everingham and Woodward (ref).
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demonstrates that the tobacco industry was directly involved in the establishment of and ongoing practical support for smokers’ rights organisations.53
Internationally, smokers’ rights groups are deemed to have offered little in the way of lasting assistance to the tobacco industry, never capturing the membership or even the interest of smokers on a significant scale. Only a small number of groups appear to remain active, none of these in Australia.53 However, FOREST in the UK is a vocal opponent of all tobacco control legislation and is presently active with an up-to-date and modern website.i
10.18.8
Tobacco retailers as a lobby baseTobacco retailers constitute an obvious and readymade lobbying base for the industry to use to promote the industry view. First, they have an obvious interest in protecting their income stream against potential threat. Second, in their frontline position selling tobacco, they are able to provide information and promote industry views within the community. Third, their business profile gives the tobacco industry access to all levels of government.
From the earliest days of the smoking and health ‘controversy’, tobacco traders have been armed with the means to pacify nervous smokers. An investigation of trade journals (the Australian Retail Tobacconist and its state-specific predecessors) dating back to 1950 shows that these magazines included articles providing industry guidance on how retailers could reassure their customers. Retailers were also advised how to keep their products attractive to the ‘youthful novice’ smoker and young women smokers.54 The authors of this research contend that today’s tobacco trade journals may continue to perform the role of promoting industry views and providing counter arguments to tobacco control measures.54
Prior to bans on advertising at point of sale, it was usual for tobacco companies to provide retailers with display cabinets, advertising material, support merchandise, and functional fittings such as outdoor awnings, hours of opening signs, and so forth. With increased restrictions on advertising in the media, the function of ‘point of sale’ advertising at retail outlets became ever more critical. The tobacco companies competed for dominance on the shop floor and in display units by offering financial and other incentives to retailers to give prominence to their brands.55 The central importance of the retail outlet as a conduit for communication with customers in the wake advertising bans is discussed in Chapter 11, Section 11.9)
Tobacco retailers have been rallied to support the industry against the encroachment of tobacco control regulation in regard to tobacco advertising, smoking restrictions and tax increases on tobacco products.54 In 2008, Philip Morris canvassed retailers in New South Wales to solicit their support in opposing bans on tobacco displays at point of sale. As well as providing information (in several languages) about why retailers should feel concerned about further restrictions, Philip Morris urged retailers to express their views to relevant state politicians and offered further information and assistance if needed.56
In 2010 the Alliance of Australian Retailers was formed to fight the Federal Government’s plans to introduce plain packaging of tobacco products.ii During the Federal election campaign in August 2010, it was revealed that the Alliance of Australian Retailers was launching a counter mass media campaign with the goal of stopping the plain pack legislation.57 Ads featuring portrayals of concerned retailers saying that plain packaging wouldn’t work and would damage their business appeared in newspapers, on television and radio.iii The campaign was funded by the major three tobacco companies. Days after the launch of the campaign major retailers withdrew their support. The Australian Association of Convenience Stores withdrew its support after being forced to do so by national grocery retailer Coles. Coles, which chairs the board of the Australian Association of Convenience Stores, forced the board to withdraw the retail group and its members, including Caltex, Shell and BP, from the campaign, after being misled on the nature of the ads.58 Woolworths revoked its membership of the Australian Association of Convenience Stores over the campaign and demanded that its $15 000 in annual fees be returned.59
i See: http://www.forestonline.org/ii See website: https://www.australianretailers.com.au/iii The television commercials can be viewed here: http://www.youtube.com/user/analogcreative
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On 10 September 2010, ABC Lateline revealed, through leaked internal documents, emails and contracts, the full extent of tobacco industry influence on the Alliance of Australian Retailers campaign.60 On the day the alliance was formed it received funds from Imperial Tobacco Australia: $1 million, British American Tobacco Australia: $2.2 million and Philip Morris Limited: $2.1 million. It was further revealed that in May, before the formation of the alliance, Philip Morris’s Australian corporate affairs manager Chris Argent was seeking advice from the lobbying and public relations firm, the Civic Group. Philip Morris was seeking advice and assistance for a campaign to stop plain packaging laws during the federal election.
10.18.9
Marshalling opposition to smoking bans in entertainment and social venuesThe tobacco industry has vigorously opposed restrictions on smoking because it limits opportunities to smoke, so reducing consumption, and further denormalises smoking behaviour, so discouraging uptake and influencing smokers to quit.61-64 The introduction of smoking restrictions in most Australian workplaces during the 1980s and 1990s was a major blow for the tobacco industry. In recent years, attention has moved to thwarting smoking restrictions in entertainment venues such as bars, restaurants, nightclubs and other licensed venues, and gambling environments. The tobacco industry has made strong allies of the hospitality industry in Australia65, 66 and internationally67, 68 chiefly through fostering fear that smoking bans will adversely affect their profitability if not their survival (an industry argument that is not supported by the evidence68).
During the 1990s a former chief executive officer of the Tobacco Institute of Australia became the national executive director of the Australian Hotels Association, and since that time the Australian Hotels Association has actively supported the tobacco industry in opposing smoking restrictions and bans and challenging the scientific evidence on secondhand smoke.66 Key points made by the Australian Hotels Association include arguments claiming that smoking bans:
< cause the mass closure of licensed premises leading to economic downturn and job losses < do not reduce prevalence of smoking < lead to increased smoking at home around children and the risk of house fires < contribute to increased domestic violence < cause community nuisances including more cigarette butt litter, neighbourhood noise and footpath congestion
< increase the risk of drink spiking (if people leave their drink unattended to go outside to smoke) < make more work for door security staff (managing traffic in and out of the venue) < will reduce government revenues as well as increase problem gambling < trample on civil liberties < offer no health benefit.
In preparation for strict smoking restrictions introduced in Victoria in 2007, all three tobacco companies operating in Australia struck financial deals with several individual Melbourne hoteliers to assist with development of open air facilities where smoking could be permitted, in exchange for the exclusive right to sell their own brands.69
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59. Benson S. Woolies pulls plug over ads. Daily Telegraph, (Sydney) 2010:12 September 2010. Available from: http://www.dailytelegraph.com.au/election/woolies-pulls-plug-over-ads/story-fn5zm695-1225904675110
60. Lloyd P. The tobacco files. Lateline, Australian Broadcasting Corporation, (Sydney) 2010:Broadcast 12 Sept. Available from: http://www.abc.net.au/lateline/content/2010/s3008987.htm
61. Chapman S, Borland R, Scollo M, Brownson R, Dominello A and Woodward S. The impact of smoke-free workplaces on declining cigarette consumption in Australia and the United States. American Journal of Public Health 1999;89(7):1018-23. Available from: http://www.ajph.org/cgi/reprint/89/7/1018
62. Fichtenberg C and Glantz S. Effect of smoke-free workplaces on smoking behaviour: systematic review. British Medical Journal 2002;325(7357):188. Available from: http://www.bmj.com/cgi/content/full/325/7357/188
63. Bauer JE, Hyland A, Li Q, Steger C and Cummings KM. A longitudinal assessment of the impact of smoke-free worksite policies on tobacco use. American Journal of Public Health 2005;95(6):1024-9. Available from: http://www.ajph.org/cgi/reprint/95/6/1024
64. Wakefield M and Forster J. Growing evidence for new benefit of clean indoor air laws: reduced adolescent smoking [Editorial]. Tobacco Control 2005;14(5):292-3. Available from: http://tc.bmjjournals.com
65. Harper T and Martin J. Trojan horses: how the tobacco industry infiltrates the smokefree debate in Australia. Australian and New Zealand Journal of Public Health 2002;26(6):572–3. Available from: http://www3.interscience.wiley.com/journal/118960700/abstract?CRETRY=1&SRETRY=0
66. Trotter L and Chapman S. ‘Conclusions about exposure to ETS and health that will be unhelpful to us: how the tobacco industry attempted to delay and discredit the 1997 Australian National Health and Medical Research Council report on passive smoking. Tobacco Control 2003;12(suppl. 3):iii102-6. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/12/suppl_3/iii102
67. Mandel LL and Glantz SA. Hedging their bets: tobacco and gambling industries work against smoke-free policies. Tobacco Control 2004;13(3):268–76. Available from: http://tc.bmjjournals.com/cgi/content/abstract/13/3/268
68. Dearlove JV, Bialous SA and Glantz SA. Tobacco industry manipulation of the hospitality industry to maintain smoking in public places. Tobacco Control 2002;11(2):94-104. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/11/2/94
69. Houston C. Big tobacco flicks cash at pub ban. The Age, (Melbourne, Australia) 2006:5 Aug. p1 Available from: http://www.theage.com.au/news/national/big-tobacco-flicks-cash-at-pub-ban/2006/08/04/1154198331806.html
90 Tobacco in Australia:Facts and Issues
Section: 10.19.1Date of last update: 26 March 2012
10.19
Tobacco industry lobbying: the targets10.19.1
Major scientific reviewsThe findings published in authoritative scientific reviews about smoking and health, the publicity they generate and the impetus they give to governments to introduce tobacco control policies inflict huge damage to the tobacco industry. Consequently the industry engages vigorously with scientific process using many of the tools described in the preceding sections, such as countering mainstream science with its own research and employing third parties to argue on its behalf. One of the earliest examples of the industry interfering with the content of an essential scientific review is when it successfully influenced the definition of addiction that led to the classification of tobacco as an ‘habituation’ in the 1964 US Surgeon General’s Advisory Committee report. Tobacco was later clearly defined as addictive in the 1988 US Surgeon General’s report.1
In the 1990s, the industry directly engaged in several attempts to disrupt the scientific review process. For example, in Australia, the industry mounted a concerted effort to undermine and derail the National Health and Medical Research Council’s review on passive smoking, which was finally published in 1997.2 The Tobacco Institute of Australia launched legal challenges regarding the procedure of the review, attempted to discredit individuals on the council’s working party, and commissioned several consultants to make submissions to the working party expressing pro-industry views. The industry also primed allies to speak to the media in its support. The Tobacco Institute of Australia had a fair measure of success, in that publication of the recommendations of the final report was prevented on purely procedural grounds. (There was no problem with the science or the recommendations themselves. Nonetheless this provided enough ammunition for the industry to dismiss the report and its findings widely in the media.)2
In the US, the tobacco industry launched a similar offensive3 against California’s Environmental Protection Agency, which issued a report on environmental tobacco smoke in 1997.4 The industry exerted pressure on the Environmental Protection Agency and related instrumentalities, attacked procedural issues and directly lobbied politicians. The industry also courted the news media in an effort to promote its views; Philip Morris went so far as to provide financial support for the National Journalism Centre (a school of journalism).5 As in Australia, the tobacco industry was successful in delaying the process and eventual release of the report, and took every opportunity along the way to gain positive publicity by discrediting the report and the procedures followed in its development.5 The International Agency for Research on Cancer was also targeted by Philip Morris with strategies intended to undermine its work on secondhand smoke by disputing the research, influencing media coverage and countering government attempts to introduce smoking restrictions.6
The industry also tried to prevent agencies outside of the health sector from publishing damaging tobacco control reports. In 1999 the World Bank published a landmark report on the economics of tobacco control, Curbing the Epidemic: Governments and the Economics of Tobacco Control,7 which concluded that tobacco control brings unprecedented health benefits without harming economies. This threatened the tobacco companies’ ability to use economic arguments to dissuade governments from enacting tobacco control policies and supporting the WHO Framework Convention on Tobacco Control (WHO FCTC), the first international treaty to be negotiated under the auspices of the World Health Organization. The industry hired public relations firms, had academics critique the Curbing the Epidemic report, hired consultants to produce estimates of the importance of tobacco to the economy, and worked through front groups, particularly the International Tobacco Growers’ Association, to question the report’s findings. These efforts were a near total failure, and the report remains an authoritative economic analysis of global tobacco control.8
91Chapter 10: The tobacco industry in Australian society
Section: 10.19.2.1Date of last update: 26 March 2012
10.19.2
Countering tobacco control legislationExerting effective influence on government decision making in Australia, and elsewhere, is an ongoing concern for the tobacco industry. Once legislation is in place, it is difficult to overturn. If shown to be effective in one part of the world, tobacco control legislation is often replicated in other jurisdictions. It is a general rule of thumb in tobacco control advocacy that the more effective a particular initiative is going to be, the more aggressively the industry will oppose it—often referred to as the ‘industry scream test’.9 Regulation that gains industry support is not likely to be any serious threat to the industry.
The history of industry opposition and lobbying in regard to legislation initiatives in Australia has been well documented. The earliest battlefields related to the introduction of restrictions on advertising10-12 and later, health warnings on tobacco packages.13 Regulatory initiatives to introduce restrictions on smoking14 and increase tobacco taxation15 have also provoked vigorous response. This strategic opposition continues, as evidenced by the well-funded tobacco industry campaign against plain packaging reforms.16,17
Since the 1990s, in light of the industry’s corporate social responsibility agenda, the tobacco companies, to varying degrees, espouse appropriate regulation of their products. For example, the Philip Morris International website states, ‘to be effective, tobacco regulatory policy must be evidence-based. Regulations must be applied to all tobacco products and all tobacco manufacturers, and should take into account the views of all legitimate stakeholders including public health authorities, government finance authorities, tobacco manufacturers and other members of the legitimate tobacco supply chain, tobacco farmers, and consumers’.18
The adoption of the WHO FCTC Article 5.3 guidelines is designed to help governments protect tobacco legislation from tobacco industry interference.19,20 Implementation of the 5.3 guidelines at a national level is already proving a challenge for key international philanthropic organisations that fund tobacco control and other health projects due to organisation executive ties to the tobacco industry.21-23
Table 10.17.1 in Section 10.17 lists the industry tactics used most often to counter tobacco control regulation. Subsections 10.19.2.1‒10.19.2.2 describe brief case studies as examples of how the industry has lobbied against regulation.
10.19.2.1
Case study: pre-emptive self-regulationArguing for self-regulation is a tried and true industry tactic. It provides the industry with a means of avoiding strong and effective governmental regulation by taking the initiative to introduce its own voluntary code of conduct. The industry reaps the dual benefits of appearing responsive to government and public concerns, while simultaneously ensuring that any such voluntary code is harmless to industry interests. In contrast, legislation carries penalties for non-compliance, is difficult to rescind, and closes the door on further negotiation.
Philip Morris introduced its own system of placing ineffective health warnings on its packaging for use in countries (particularly the developing world) where regulation was weak or not in place. Internal documents show that Philip Morris deliberately gave the appearance of responding to public health concerns (while doing so very much on its own terms) and simultaneously earned positive publicity for its responsible stance.24
Until superseded by state and federal legislation, tobacco advertising in Australia was in large part subject to a series of voluntary agreements struck between the tobacco companies and the federal government. The elasticity of the voluntary agreements and the many and varied ways in which they were flouted by the tobacco companies have been well documented.25, 26 (See Chapter 11 for further discussion.)
92 Tobacco in Australia:Facts and Issues
Section: 10.19.3Date of last update: 26 March 2012
10.19.2.2
Case study: undermining the Framework Convention on Tobacco ControlThe WHO FCTC initiated in 1999 by the WHO and signed by 174 countries (as of August 2011), represents an orchestrated threat to the industry on a global scale. It is therefore not surprising that the industry attempted to thwart the development and subsequent ratification of the FCTC.27
Between 1999 and 2001, British American Tobacco, Philip Morris and Japan Tobacco International worked together on ‘Project Cerberus’, an initiative intended to devise an alternative voluntary code for advertising and other industry conduct, which it hoped governments could be persuaded to accept instead of signing up to the WHO FCTC.28
Companies also conducted their own offensives against the WHO FCTC. For example, Philip Morris employed a public policy and issues management firm (Mongoven, Biscoe and Duchin) in 1997 to advise on the process for formulating and ratifying the WHO FCTC and how this might be subverted. Carter’s analysis of industry documents shows that Mongoven, Biscoe and Duchin gained high level access to the process within the WHO. Among its recommendations, Mongoven, Biscoe and Duchin advised Philip Morris to delay the process; to attempt to steer the convention towards a focus on children (thereby leaving the rest of the market open for ‘adult choice’); and to seek allies among non-government organisations. It was deemed especially important to influence the content of the convention, and to engage with individual member states with a view to nurturing wider regional support.27
The tobacco industry was unsuccessful in its attempts to prevent WHO FCTC ratification and subsequently attempted to influence WHO FCTC guidelines and to block local and national implementation of the WHO FCTC.29 There is strong evidence that the industry engaged in lobbying on a regional basis, attempting to influence governments to comply with the least stringent options stipulated in the WHO FCTC.30-33
10.19.3
Subverting public health initiatives and tobacco control organisations It is not surprising that the tobacco industry should keep a watching brief on the activities of public health organisations that promote views inimical to their own. Cooperative efforts within the industry to keep abreast of developments in tobacco control go back at least as far as the World Conference on Smoking and Health in the late 1970s.34
One of the most detailed accounts of how the tobacco industry has responded to tobacco control initiatives is contained in the 260 page report published by the WHO in 2000.35 This report examined internal tobacco industry documents that were made public as a result of the Master Settlement Agreement of 1998 with a view to determining how the industry had sought to counter the objectives of the WHO. The documents revealed that multiple strategies had been used, including:
< establishing connections with WHO employees, consultants and advisors, and infiltrating the organisation with its own consultants in order to influence policy issues
< attempting to shift financial priority away from tobacco control activities < engaging with other UN agencies (such as the Food and Agriculture Organization and the World Bank) to undermine WHO policy
< using ‘independent’ individuals and organisations to discredit the WHO’s policies and officers < using apparently unrelated organisations to lobby on its behalf against WHO policies < discrediting or distorting WHO research < monitoring, at times secretly, WHO meetings and other activities.
93Chapter 10: The tobacco industry in Australian society
Section: 10.19.3Date of last update: 26 March 2012
The industry was especially keen to place a wedge between developing and developed countries by characterising the WHO as an organisation with ‘first world’ priorities, unfairly endangering the economic opportunities provided by tobacco industry in developing countries. The report concludes:
‘At the most fundamental level, this inquiry confirms that tobacco use is unlike other threats to global health. Infectious diseases do not employ multinational public relations firms. There are no front groups to promote the spread of cholera. Mosquitoes have no lobbyists. The evidence presented here suggests that tobacco is a case unto itself, and that reversing its burden on global health will be not only about understanding addiction and curing disease, but, just as importantly, about overcoming a determined and powerful industry.’ (p 244)35
In the US during the 1990s, the tobacco industry countered major National Cancer Institute initiatives promoting community-based tobacco cessation projects. The program, American Stop Smoking Intervention Study (ASSIST), was the largest and most comprehensive tobacco control program launched in the US, and was strongly oriented to interventions and activities at a local level.36 The tobacco industry response was thorough. The industry monitored the projects; attempted to infiltrate them, obstructing them in some communities; and seeded negative media stories. A network of allies to assist in lobbying was organised. The industry attempted to have pre-emptive legislation introduced to protect tobacco advertising. The industry also attacked the basis of the project as a misuse of taxpayers’ money to unfairly target the tobacco industry and launched a number of law suits, which disrupted and delayed program implementation.36, 37 Litigation has also been used by the industry as a tool against other tobacco control campaigns in the media, such as those run by the American Legacy Foundation and the California Tobacco Education Media Campaign.38
As well as targeting interventions, the industry paid attention to the organisations that worked against its interests. Evidence from internal tobacco industry documents in the US shows that tobacco companies attempted to infiltrate at least two organisations. STAT (Stop Teenage Addiction to Tobacco) and INFACT (the Infant Formula Action Coalition) were active and effective during the 1990s and pursued agendas antithetical to industry interests.39 In their efforts to gain intelligence on the activities of these groups, the tobacco industry used intermediaries to access materials on their behalf and to attend conferences, planted public relations consultants as spies to attend and report on meetings, and illegally tape recorded meetings.39 The industry has also made it its business to publicly discredit key individuals working in tobacco control.27, 40
The evidence of tobacco industry infiltration of health interests in Australia is sparse but it is probable that it has been attempted. According to a former CEO of the Tobacco Institute of Australia (as stated during court testimony in 2005), in the early 1990s the Tobacco Institute of Australia engaged a private investigations agency to arrange for rubbish bins belonging to certain health organisations, such as the NSW Cancer Council and the National Heart Foundation, to be searched in an effort to discover the health lobby’s forward planning and funding details.41
Philip Morris USA took a different tack in 1995, undermining public health initiatives by appearing to offer them its support.40 As part of ‘Project Sunrise’, Philip Morris identified and then actively sought dialogue with public health advocates that it deemed to be ‘moderate’ in view and likely to be persuaded to see advantages in forming cooperative policies on tobacco control (such as concentrating on harm reduction strategies rather than on policies that would impact more negatively on industry profitability and survival). The benefits of any alliances would be multiple: they would buy Philip Morris social credibility; they could act as a conduit for Philip Morris’s views in arena in which Philip Morris would normally be excluded; and they might help ensure that any programs supported or regulation developed was acceptable to Philip Morris. But above all, Philip Morris could argue that people who did not wish to associate with them were ‘prohibitionists’ or ‘extremists’, establishing useful schisms between tobacco control advocates and diluting their effectiveness.40
94 Tobacco in Australia:Facts and Issues
Section: 10.19.3Date of last update: 26 March 2012
References1. Mars S and Ling P. Meanings & motives: experts debating tobacco addiction. American Journal of Public Health 2008;98(10):1-11. Available from: http://www.ajph.org/cgi/reprint/
AJPH.2007.114124v1
2. Trotter L and Chapman S. ‘Conclusions about exposure to ETS and health that will be unhelpful to us: how the tobacco industry attempted to delay and discredit the 1997 Australian National Health and Medical Research Council report on passive smoking. Tobacco Control 2003;12(suppl. 3):iii102-6. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/12/suppl_3/iii102
3. Muggli ME, Hurt R and Repace J. The tobacco industry’s political efforts to derail the EPA report on ETS. American Journal of Preventive Medicine 2004;26(2):166-77. Available from: http://www.ncbi.nlm.nih.gov/pubmed/14751332
4. California Environmental Protection Agency and Office on Environmental Health Hazard Assessment. Health effects of exposure to environmental tobacco smoke. Sacramento: California Environmental Protection Agency, 1997. Available from: http://cancercontrol.cancer.gov/tcrb/monographs/10/
5. Muggli ME, Hurt RD and Becker L. Turning free speech into corporate speech: Philip Morris’ efforts to influence US and European journalists regarding the US EPA report on secondhand smoke. Preventive Medicine 2004;39(3):568-80. Available from: http://www.ncbi.nlm.nih.gov/pubmed/15313097
6. Ong E and Glantz S. Tobacco industry efforts subverting International Agency for Research on Cancer’s second-hand smoke study. Lancet 2000;355(9211):1253–9. Available from: http://www.thelancet.com/journals/lancet/article/PIIS0140673600020985/abstract
7. Jha P and Chaloupka F. Curbing the epidemic: governments and the economics of tobacco control. Washington DC: The World Bank, 1999. Available from: http://siteresources.worldbank.org/INTETC/Resources/375990-1113853423731/chapter5.asp
8. Mamudu H, Hammond R and Glantz S. Tobacco industry attempts to counter the World Bank report Curbing the Epidemic and obstruct the WHO Framework Convention on Tobacco Control. Social Science and Medicine 2008;67(11):1690–9. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18950924
9. Chapman S. Public Health Advocacy and Tobacco Control: Making Smoking History. Oxford: Blackwell, 2007.
10. Woodward S. The 1982 Western Australian Smoking and Tobacco Products Advertisements Bill. Medical Journal of Australia 1983;1(5):210-11. Available from: http://www.ncbi.nlm.nih.gov/pubmed/6835122
11. Chapman S and Reynolds C. Regulating tobacco - the South Australian Tobacco Products Control Act, 1986. Its development and passage through parliament Commentary Community Health Studies 1987;11(suppl.1):S3-5. Available from: http://www.ncbi.nlm.nih.gov/pubmed/3581789
12. Chapman S. Anatomy of a campaign: the attempt to defeat the NSW Tobacco Advertising Prohibition Bill 1991. Tobacco Control 1992;1(1):50-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/1/1/50
13. Chapman S and Carter SM. ‘Avoid health warnings on all tobacco products for just as long as we can’: a history of Australian tobacco industry efforts to avoid, delay and dilute health warnings on cigarettes. Tobacco Control 2003;12(suppl. 3):iii13–22. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/suppl_3/iii13
14. Harper T and Martin J. Trojan horses: how the tobacco industry infiltrates the smokefree debate in Australia. Australian and New Zealand Journal of Public Health 2002;26(6):572–3. Available from: http://www3.interscience.wiley.com/journal/118960700/abstract?CRETRY=1&SRETRY=0
15. Chapman S and Wakefield M. Tobacco control advocacy in Australia: reflections on 30 years of progress. Health Education and Behaviour 2001;28(3):274-89 Available from: http://www.ncbi.nlm.nih.gov/pubmed/11380049
16. Casben L. Tobacco companies rally against plain packaging. ABC News. Sydney: Australian Broadcasting Corporation, 2010, viewed 16 August 2011. Available from: http://www.abc.net.au/news/2010-04-29/tobacco-companies-rally-against-plain-packaging/414540
17. Miller B. Tobacco industry ups plain pack campaign. Radio National, Australian Broadcasting Corporation, (Sydney) 2011:17 May. Available from: http://www.abc.net.au/worldtoday/content/2011/s3218995.htm
18. Philip Morris International. Regulating tobacco products, Corporate website. New York: Philip Morris International Management, 2011, viewed 12 August 2011. Available from: http://www.pmi.com/eng/tobacco_regulation/regulating_tobacco/pages/regulating_tobacco.aspx
19. WHO Framework Convention on Tobacco Control Conference of the Parties. Elaboration of guidelines for implementation of Article 5.3 of the Convention. Geneva: World Health Organization, 2008. Available from: http://www.who.int/fctc/guidelines/article_5_3/en/index.html
20. Mulvey K. News analysis. A life-saving precedent: protecting public health policy against Big Tobacco. Tobacco Control 2010;19(2):91-4. Available from: http://tobaccocontrol.bmj.com/content/19/2/91.short
21. Burch T, Wander N and Collin J. News analysis. Uneasy money: the Instituto Carlos Slim de la Salud, tobacco philanthropy and conflict of interest in global health. Tobacco Control 2010;19(6):439-42. Available from: http://tobaccocontrol.bmj.com/content/19/6/e1.abstract
22. Collishaw N. Tobacco money and public health. Tobacco Control 2010;19(6):437-8. Available from: http://tobaccocontrol.bmj.com/content/19/6/437.short
23. Chapman S. Health and philanthropy--the tobacco connection. The Lancet 2010;377(9759):11-13. Available from: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2810%2961036-7/fulltext
24. Wander N and Malone RE. Making Big Tobacco give in: you lose, they win. American Journal of Public Health 2006;96(11):2048-54. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17018823
25. Chapman S. A David and Goliath story: tobacco advertising and self regulation in Australia. British Medical Journal 1980;281(6429):1187-90. Available from: http://www.ncbi.nlm.nih.gov/pubmed/7427631
26. Carter SM. From legitimate consumers to public relations pawns: the tobacco industry and young Australians. Tobacco Control 2003;12(suppl. 3):iii71-8. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/12/suppl_3/iii71
95Chapter 10: The tobacco industry in Australian society
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27. Carter SM. Mongoven, Biscoe & Duchin: destroying tobacco control activism from the inside. Tobacco Control 2002;11(2):112-18. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/11/2/112
28. Mamudu J, Hammond R and Glantz S. Project Cerberus: tobacco industry strategy to create an alternative Framework Convention on Tobacco Control. American Journal of Public Health 2008;98(9):1630-42 Available from: http://www.ncbi.nlm.nih.gov/pubmed/18633079
29. Gonzalez M, Green LW and Glantz SA. Through tobacco industry eyes: civil society and the FCTC process from Philip Morris and British American Tobacco’s perspectives. Tobacco Control 2011;on-line first, 2 June Available from: http://tobaccocontrol.bmj.com/content/early/2011/06/01/tc.2010.041657.abstract
30. Bialous S. Brazil: growers’ lobby stalls FCTC. Tobacco Control 2004;13(4):323-4. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/13/4/323-b
31. Assunta M and Chapman S. Health treaty dilution: a case study of Japan’s influence on the language of the WHO Framework Convention on Tobacco Control. Journal of Epidemiology and Community Health 2006;60(9):751-6. Available from: http://jech.bmj.com/cgi/reprint/60/9/751
32. Samet J, Wipfli H, Perez-Padilla R and Yach D. Mexico and the tobacco industry: doing the wrong thing for the right reason? British Medical Journal 2006;332(7537):353-4. Available from: http://www.bmj.com/cgi/reprint/332/7537/353
33. Simpson D. Malaysia: ‘transparency’ - industry people at FCTC talks. Tobacco Control 2006;15(3):150. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/15/3/150
34. Francey N and Chapman S. ‘Operation Berkshire’ - the international tobacco companies’ conspiracy. British Medical Journal 2000;321(7257):371-4. Available from: http://www.bmj.com/cgi/reprint/321/7257/371.pdf
35. Committee of Experts on Tobacco Industry Documents. Tobacco company strategies to undermine tobacco control activities at the World Health Organization. Geneva: WHO, 2000. Available from: http://www.who.int/tobacco/media/en/who_inquiry.pdf
36. White J and Bero L. Public health under attack: the American Stop Smoking Intervention Study (ASSIST) and the tobacco industry. American Journal of Public Health 2004;94(2):240-50. Available from: http://www.ajph.org/cgi/content/full/94/2/240
37. Carlini B, Patrick D, Halperin A and Santos V. The tobacco industry’s response to the COMMIT Trial: an analysis of legacy tobacco documents. Public Health Reports 2006;121(5):501-8. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16972502
38. Ibrahim JK and Glantz SA. Tobacco industry litigation strategies to oppose tobacco control media campaigns. Tobacco Control 2006;15(1):50–8. Available from: http://tc.bmjjournals.com/cgi/content/abstract/15/1/50
39. Malone RE. Tobacco industry surveillance of public health groups: the case of STAT and INFACT. American Journal of Public Health 2002;92(6):955-60. Available from: http://www.ajph.org/cgi/reprint/92/6/955.pdf
40. McDaniel PA, Smith EA and Malone RE. Philip Morris’s Project Sunrise: weakening tobacco control by working with it. Tobacco Control 2006;15(3):215–23. Available from: http://tc.bmjjournals.com/cgi/content/abstract/15/3/215
41. Simpson D. Australia: epidemiology classes, shredding, and calls to ‘the garbageman’: a day in the life of tobacco folk. Tobacco Control 2005;14(2):75-6. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/2/75
96 Tobacco in Australia:Facts and Issues
Section: 10.20Date of last update: 26 March 2012
10.20
Intervention in political and judicial processesIn Australia it is a legal requirement that donations made by individuals or entities to registered political parties to the value of or greater than $10 000i are declared to the Australian Electoral Commission. The Australian Electoral Commission posts on its websiteii donor annual returns dating back to the financial year 1998–99. Tables 10.20.1 and 10.20.2 show the total amounts of tobacco money received by the three major political parties in Australia since then.
In February 2004, the then leader of the Australian Labor Party (ALP) opposition, Mr Mark Latham, announced that the ALP would no longer accept donations from tobacco companies.1 The Liberal Party of Australia2 and the Australian National Party3 have continued to receive donations from Philip Morris Australia and British American Tobacco Australia on an ongoing basis, and have publicly stated that they see no reason to stop doing so. Neither the Australian Democrats4 nor the Australian Greens5 take tobacco company donations as a matter of policy.
Soon after Mr Latham’s announcement in 2004, a Private Members’ Bill was proposed by ALP MP Mr Duncan Kerr and seconded by Liberal Party MP Dr Mal Washer. If passed, the Commonwealth Electoral Amendment (Preventing Smoking Related Deaths) Bill (2004–05)iii would prevent political parties and individual candidates from accepting donations from tobacco companies. The Bill was first read in the House of Representatives on 16 February 20046 but was left to flounder quietly the following year in the absence of support from the then Liberal–National Coalition government.
i Previously the limit was $1,500 – see discussion later in this section.ii http://fadar.aec.gov.au/iii http://parlinfoweb.aph.gov.au/piweb/Repository/Legis/Bills/Linked/30050501.pdf
Table 10.20.1 Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2009–10
PMI Labor Liberal NationalLiberal National Party
of QueenslandParty direct
($)Affiliated
($)Total ($)
Party direct ($)
Affiliated ($)
Total ($)
Party direct ($)
Affiliated ($)
Total ($)
Total ($)
1998–99 41 610 – 41 610 62 800 – 62 800 25 000 – 25 000
1999–00 50 000 – 50 000 114 800 10 160 124 960 30 000 – 30 000
2000–01 61 800 2 720 64 520 63 000 8 500 71 500 32 500 – 32 500
2001–02 74 800 – 74 800 84 815 – 84 815 37 500 – 37 500
2002–03 72 720 – 72 720 74 365 9 900 84 265 30 500 – 30 500
2003–04 2 200 3 750 5 950 10 100 – 10 100 2 200 – 2 200
2004–05 102 600 1 100 102 600 35 500 – 35 500
2005–06 90 950 3 990 94 940 34 275 – 34 275
2006–07 87 900 4 150 92 050 30 100 – 30 100
2007–08 90 805 5 335 96 140 42 700 – 42 700
2008–09 110 175 17 060 127 235 25 950 – 25 950 5 225
2009–10 87 925 11 020 98 945 42 100 1 000 43 100 5 000
TOTAL 303 130 6 470 309 600 980 235 71 215 1 050 350 368 325 1 000 369 325 10 225
Source: Australian Electoral Commission, Donor annual return search7
97Chapter 10: The tobacco industry in Australian society
Section: 10.20Date of last update: 26 March 2012
Prior to the ALP’s refusal of donations from tobacco companies, all three major political parties received significant contributions from Philip Morris Australia and British American Tobacco Australia. Imperial Tobacco Australia does not appear to have made political donations. In general, substantially larger amounts of funding have been directed by both tobacco companies towards the conservative parties (the Liberal and National parties) even prior to the ALP ban, which is likely to reflect preference by the tobacco companies for conservative politics, as well as the fact that the Liberal–National Coalition was in power for the entire period shown in the tables.
As of 2009–10, Australian political parties have received in total around $1.87 million in donations from British American Tobacco Australia, and $1.74 million from Philip Morris Australia since 1989–99. Since the ALP’s rejection of tobacco donations in 2004, the Liberals and the Nationals have jointly received an average of $280 000 annually from the tobacco industry—see Figures 10.20.1 and 10.20.2.
In December 2005, under the Coalition federal government led by Mr John Howard, rules concerning the minimum value of donations requiring disclosure were changed and the reportable limit increased from $1,500 to $10 000.i According to The Age newspaper, this has simultaneously lead to an increase in political donations from all sources as well as opacity in tracing their origins.1 For example, investigations by The Age showed that although the donor annual return filed by the Liberal Party for the financial year 2005–06 detailed income directly received by the party from tobacco companies, it could not be ascertained from the return that some of the Liberal Party’s closely allied fundraising organisations such as The 500 Club and the Bayside Forum were also in receipt of tobacco money.1 Although these donations were declared by the tobacco companies in their own annual returns to the Australian Electoral Commission, the current system of reporting does not guarantee clear, one-stop disclosure of funding sources.
As the time of writing (August 2011) an inquiry into the funding of political parties and election campaigns is underway. The Joint Standing Committee on Electoral Matters is to enquire into and report by 30 September 2011 on options to improve the system for the funding of political parties and election campaigns.8 Interested persons and organisations were invited to make submissions addressing the terms of reference9 by Friday 24 June 2011.
i This amount is indexed with effect from 1 July each year based on increases in the consumer price index. The current disclosure threshold amount from 1 July 2011 to 30 June 2012 is more than $11 900.
Table 10.20.2 Donations to Australian political parties by British American Tobacco Australia Limited, 1998–1999 to 2009–2010
Labor Liberal National
BATA Party direct ($) Affiliated ($) Total ($) Party direct ($) Affiliated ($) Total ($) Party direct ($) Affiliated ($) Total ($)
1998–99 61 000 – 61 000 25 000 .00 20 000.00 45 000.00 10 000 – 10 000
1999–00 17 100 2 715 19 815 12 585.00 20 538.50 33 123.50 – – –
2000–01 122 025 – 122 025 130 543.50 – 130 543.50 – – –
2001–02 60 450 – 60 450 146 422.72 – 146 422.72 27 500 – 27 500
2002–03 26 150 – 26 150 15 000.00 – 15 000.00 114 200 – 114 200
2003–04 27 290 3 750 31 040 148 738.50 – 148 738.50 15 400 – 15 400
2004–05 159 267.05 – 159 267.05 – – –
2005–06 114 310.91 – 114 310.91 16 600 – 16 600
2006–07 161 409.00 – 161 409.00 3 300 – 3 300
2007–08 89 930.00 33 930.00 123 860.00 5 000 – 5 000
2008–09 132 810.00 – 130 385.00 14 650 – 8 120
2009–10 130 385.00 – 130 385.00 14 650 – 14 650
TOTAL 314 015 6 465 320 480 1 266 401.68 74 468.50 1 338 445.18 221 300 – 214 770
Source: Australian Electoral Commission, Donor annual return search7
98 Tobacco in Australia:Facts and Issues
Section: 10.20Date of last update: 26 March 2012
The report was tabled on the 9 December 2011.10 Although some Australian public health organisations were ‘calling for an end to any direct or indirect tobacco company donations, whether from local or foreign companies, and for measures to improve transparency and accountability’11 the committee recommended against banning donations by any particular industry. It did recommend a lower threshold for the amount at which disclosure was required, and more frequent reporting.10
Figure 10.20.1 Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2009–10Source: Australian Electoral Commission, Donor annual return search7
0
20000
40000
60000
80000
100000
120000
140000
2009–102008–092007–082006–072005–062004–052003–042002–032001–022000–011999–001998–99
LabourLiberalNational
Figure 10.20.2 Donations to Australian political parties by British American Tobacco Australia Limited, 1998–99 to 2009–10Source: Australian Electoral Commission, Donor annual return search7
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
2009–102008–092007–082006–072005–062004–052003–042002–032001–022000–011999–001998–99
LabourLiberalNational
99Chapter 10: The tobacco industry in Australian society
Section: 10.20Date of last update: 26 March 2012
References1. Koutsoukis J. Big tobacco, big pay packet - big influence? The Age, (Melbourne, Australia) 2007:11 Feb. Available from: http://www.theage.com.au/news/national/big-tobacco-big-pay-
packet-8212-big-influence/2007/02/10/1170524347049.html
2. ABC News. ALP to cut tobacco ties. (Sydney) 2004:23 January. Available from: http://www.abc.net.au/news/stories/2004/01/23/1030160.htm
3. ABC News. Nationals defend donations from tobacco companies. (Sydney) 2007:5 February Available from: http://www.abc.net.au/news/stories/2007/02/05/1840415.htm
4. Pauly J, Li Q and Barry M. Tobacco-free electronic cigarettes and cigars deliver nicotine and generate concern. Tobacco Control 2007;16(5):357. Available from: http://tobaccocontrol.bmj.com/content/16/5.toc
5. ABC News. Parties urged to stub out tobacco firms’ donations. (Sydney) 2006:7 March. Available from: http://www.abc.net.au/news/stories/2006/03/07/1586022.htm
6. Kerr D. Extract from House of Representatives Hansard 16 February 2004. Commonwealth Electoral Amendment (Preventing smoking related deaths) Bill 2004: First reading. Canberra: 2004. Available from: http://www.aph.gov.au/senate/committee/clac_ctte/completed_inquiries/2002-04/tob_adv_proh/documents_tor/1_read.pdf
7. Australian Electoral Commission. Political parties financial disclosure. Canberra: Australian Electoral Commission, 2011 [viewed 31 August 2011]. Available from: http://periodicdisclosures.aec.gov.au/
8. Joint Standing Committee on Electoral Matters. Inquiry into the funding of political parties and election campaigns. Canberra: Parliament of Australia, 2011 [viewed 17 August 2011]. Available from: http://www.aph.gov.au/house/committee/em/political%20funding/index.htm
9. Joint Standing Committee on Electoral Matters. Inquiry into the funding of political parties and election campaigns. Terms of reference. Canberra: Parliament of Australia, 2011 [viewed 17 August 2011]. Available from: http://www.aph.gov.au/house/committee/em/political%20funding/tor.htm
10. Joint Standing Committee on Electoral Matters. Report of the inquiry into the funding of political parties and election campaigns. Canberra: Parliament of Australia, 2011 [viewed 17 August 2011]. Available from: http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=em/political%20funding/report.htm
11. Action on Smoking and Health Australia. Ending tobacco-linked political donations long overdue, health groups tell inquiry [Media release]. Woolloomooloo: ASH Australia, 8 August 2011 [viewed 13 August 2011]. Available from: http://www.ashaust.org.au/mediareleases/110808.htm
100 Tobacco in Australia:Facts and Issues
Section: 10.21.1Date of last update: 26 March 2012
10.21
Public attitudes to the tobacco industryThere is no doubt that the tobacco companies in Australia and in many other parts of the world have suffered devastating blows to their public image in recent decades. In the wake of litigation cases during the 1990s, which revealed duplicitous industry conspiracies to mislead and reassure smokers about the effects of tobacco use,1 encourage children to start smoking2 and undermine public health policy3, 4, the companies have embarked upon a multi-faceted public relations offensive designed to persuade the general public they have turned over a new corporate leaf.
Several studies have examined Australian attitudes to tobacco companies. One of the earliest was undertaken in Western Australia in 1988, a time when the tobacco companies were still publicly denying that smoking caused disease, were challenging the mounting evidence on secondhand smoke, and contending with an increased demand for tobacco control measures from a growing number of Australian health concerns. This research found that on the basis of public credibility, 75% of respondents felt that tobacco industry representatives were ‘not at all believable’, rating them lower than used car salesmen (69%).5
Industry attempts to resuscitate its image appear not to have been of much influence. South Australian research in the late 1990s found that 80% of respondents (and 74% of smokers) thought that tobacco companies mostly did not, or never, told the truth about smoking and health;6 and Victorian research undertaken in 2004 reported similar findings.7 International research studying opinions in Canada, the US, the UK and Australia shows that overall, 80% of smokers do not believe that tobacco companies can be trusted to tell the truth.8 Distrusting the tobacco industry is associated with an increased likelihood of cessation behaviours among smokers,8 and negative attitudes to the industry have been harnessed by tobacco control advocates as a way of encouraging quitting.
Other research has investigated just how far people believe that the tobacco industry may reasonably be regulated. A survey of Australian smokers in 2004 showed that 69% of respondents felt that tobacco products should be more tightly regulated, and 49% agreed that tobacco companies should take responsibility for the harms caused by tobacco.9 Interestingly, 77% of smokers surveyed also believed the government does not really care about reducing the prevalence of smoking because of the revenue it receives from tobacco taxes. The authors of this study conclude that ‘stronger government action to control tobacco products and the tobacco industry is likely to be supported by the majority of Australian smokers and that failure of governments to act is associated with cynicism about in whose interests governments operate’ (p169).9
An extension of tobacco industry disapproval is the acceptability of smoking itself. When Australians are surveyed on their attitudes and perceptions of tobacco use when compared to other illicit and legal drugs, interesting insights are revealed. In the 2010 National Drug Strategy Household Survey, approval of regular adult use of tobacco was only 15.3%. Of the people surveyed aged over 14 years, the drug (correctly) perceived to be associated with the most number of deaths was tobacco, with 36.0% nominating it over all other illicit and legal drugs. However, fewer than half of these people (15.8%) named tobacco as the drug most concerning to community. The proportion of people who first thought of tobacco when asked to name a drug associated with a drug problem was only 2.2%.10 These figures suggest that—despite the fact that so few people approve of its use—there is still room to improve the knowledge that the general public has about the relative harms associated with tobacco use.
10.21.1
‘Denormalisation’ of tobacco use and the tobacco industryThe changing public attitudes to the tobacco industry are a marker of the growing ‘denormalisation’ of tobacco use. Denormalisation refers to the transition in status of smoking from a widely practised and socially acceptable behaviour to one which is increasingly typified as destructive, dirty and anti-social. Denormalisation does not only apply to smoking. It has increasingly applied to the tobacco industry, which (as shown in the preceding section) has not enjoyed a particularly positive public profile in recent years. Public recognition that the industry has for many decades lied to smokers and the wider community about the health effects of tobacco use has been heightened by
101Chapter 10: The tobacco industry in Australian society
Section: 10.21.1Date of last update: 26 March 2012
high profile legal cases and the public release of previously confidential industry documents. The industry has been cast as the villain in popular culture (such as John Grisham’s novel The Runaway Jury and movies The Insider11 and Thank You for Smoking). The industry’s adoption of corporate social responsibility programs has been a major public relations campaign to regain corporate credibility (see Section 10.11).
Chapman and Freeman detail many markers of denormalisation of smoking in Australia that demonstrate just how marginalised smoking—and its champion, the tobacco industry—has become.11 These include prevailing attitudes in the community, as evidenced through an array of media reports, environmental and health campaigns and advertising for items such as insurance, accommodation and cessation aids.
Increasing limits on where smoking may occur means that smokers are for the most part defined as a group whose unwelcome behaviour entails segregation. Provision of smoking accessories such as cigarette lighters and ashtrays in cars is no longer standard in cars of Australian manufacture and some imported European vehicles; once-elegant tobacco packets are now disfigured by graphic health warnings.11
In that denormalisation of smoking contributes to continued downward pressure on smoking rates by encouraging quitting and discouraging uptake of smokingi, it can be seen as a marker of progress. However it is important to consider whether the denormalisation of smoking might lead to the marginalisation of those people who continue to smoke. There is a risk that as smoking becomes more concentrated among populations that are already disadvantaged (such as lower socio-economic status groups and the mentally ill), these individuals may have less motivation to quit or to access programs that might assist them.13, 14 Stigmatisation of smokers could also lead to discrimination (for example in the workplace) and ‘victim blaming’ if smokers are regarded as responsible for their own illness.11
i There is good evidence that it reduces overall consumption of tobacco products—see Alamar B and Glantz S. 200612
102 Tobacco in Australia:Facts and Issues
Section: 10.21.1Date of last update: 26 March 2012
References1. Francey N and Chapman S. ‘Operation Berkshire’ - the international tobacco companies’ conspiracy. British Medical Journal 2000;321(7257):371-4. Available from: http://www.bmj.com/
cgi/reprint/321/7257/371.pdf
2. Carter SM. From legitimate consumers to public relations pawns: the tobacco industry and young Australians. Tobacco Control 2003;12(suppl. 3):iii71-8. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/12/suppl_3/iii71
3. Committee of Experts on Tobacco Industry Documents. Tobacco company strategies to undermine tobacco control activities at the World Health Organization. Geneva: WHO, 2000. Available from: http://www.who.int/tobacco/media/en/who_inquiry.pdf
4. Trochim WMK, Stillman FA, Clark PI and Schmitt CL. Development of a model of the tobacco industry’s interference with tobacco control programmes. Tobacco Control 2003;12(2):140-7. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/12/2/140
5. Daube M. West Australians are unlikely to believe statements made by the tobacco industry [Media release from the Office of the Director]. Perth: Health Promotion and Education Services Branch, 1988.
6. Wakefield M, Miller C and Woodward S. Community perceptions about the tobacco industry and tobacco control funding. Australian and New Zealand Journal of Public Health 1999;23(3):240–4. Available from: http://www3.interscience.wiley.com/journal/120141553/abstract
7. Durkin SJ, Germain D and Wakefield M. Adult’s perceptions about whether tobacco companies tell the truth in relation to issues about smoking. Tobacco Control 2005;14(6):429–30. Available from: http://tobaccocontrol.bmj.com/cgi/content/full/14/6/429-a
8. Hammond D, Fong GT, Zanna MP, Thrasher JF and Borland R. Tobacco denormalization and industry beliefs among smokers from four countries. American Journal of Preventive Medicine 2006;31(3):225-32. Available from: http://www.ncbi.nlm.nih.gov/pubmed/16905033
9. Young D, Borland R, Siahpush M, Hastings G, Fong G and Cummings K. Australian smokers support stronger regulatory controls on tobacco: findings from the ITC Four-Country Survey. Australia and New Zealand Journal of Public Health 2007;31(2):164-9. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17461008
10. Australian Institute of Health and Welfare. 2010 National Drug Strategy Household Survey report. Drug statistics series no. 25, AIHW cat. no. PHR 145. Canberra: Australian Institute of Health and Welfare, 2011. Available from: http://www.aihw.gov.au/WorkArea/DownloadAsset.aspx?id=10737419578&libID=10737419577
11. Chapman S and Freeman B. Markers of the denormalisation of smoking and the tobacco industry. Tobacco Control 2008;17(1):25-31. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/17/1/25.pdf
12. Alamar B and Glantz S. Effect of increased social unacceptability of cigarette smoking on reduction in cigarette consumption. American Journal of Public Health 2006;96(8):1359−63. Available from: http://www.ajph.org/cgi/content/full/96/8/1359
13. Schroeder SA. Stranded in the periphery - the increasing marginalization of smokers. The New England Journal of Medicine 2008;358(21):2284-6. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18499574
14. Bell K, Salmon A, Bowers M, Bell J and McCullough L. Smoking, stigma and tobacco denormalization: further reflections on the use of stigma as a public health tool. A commentary on Social Science & Medicine’s Stigma, Prejudice, Discrimination and Health Special Issue (67: 3). Social Science & Medicine 2010;70(6):795-99. Available from: http://www.ncbi.nlm.nih.gov/pubmed/20044187
103Chapter 10: The tobacco industry in Australian society
Section: 10.22.1Date of last update: 26 March 2012
10.22
The future of the tobacco industry10.22.1
In Australia and other developed country, mature marketsAustralia is regarded in tobacco industry parlance as a ‘mature’ market, meaning that consumption is in decline. The best the tobacco companies can hope for is to gain a larger slice of a shrinking market, to sell more of their most profitable brands, and that reductions in the volume of cigarettes smoked and the numbers of people smoking will be gradual. Euromonitor, an international organisation that compiles business intelligence and industry data, predicts that ‘due to tighter legislation and the ongoing health and wellness trend in the country, smoking prevalence is expected to further decrease...with volume sales...continuing to decline’.1 Nonetheless, this does not mean that the industry will not continue to be profitable in Australia in the short term. The industry can be expected to continue defending its interests as evidenced by its lobbying efforts against plain packaging reforms.2
In January 2011, Citigroup issued a report that suggested that smoking could virtually disappear in developed countries by the year 2050.3 While acknowledging that in the short term tobacco will continue to be a highly profitable industry, Citigroup reasoned that in the ‘very long view, it’s hard to ignore 50 years of data. Smoking rates appear to be falling in a series of straight lines. If this continues, and it has for 50 years, then it means that the percentage declines in volumes will gradually accelerate. This seems to have been what is happening’.3 As a consequence of its findings, Citigroup downgraded its investment rating on tobacco stocks. Euromonitor summarises Citibank’s reasons for adopting a less positive view of the industry’s prospects as being primarily due to an inability to raise prices, the advent of plain packaging, and that smoking rates will keep falling. The net result is that eventually cigarette price rises will no longer be able to sustain profit growth.4 Euromonitor’s long-term volume forecast (to 2014) does not indicate a fall in total global cigarette consumption, provided China is included. However, despite the advent of Chinese Marlboro, it admits it is difficult ‘to envisage any of the international companies enjoying a major share of the Chinese market, even by 2040’.4
In the same forecasting report, Citibank upgraded the investment status of Swedish Match—the smokeless tobacco (snus) company—because of pricing strength and volume growth.4 This is consistent with the smokeless tobacco product test marketing that the tobacco industry has undertaken in the US. These products appear to be targeting consumers and smokers in smokefree environments in order to expand the tobacco market and undermine smoking cessation.5 Given the current Australian sales ban on smokeless tobacco products, this is very unlikely to have a similar effect in Australia.
All the companies acknowledge the reality that their markets are likely to become yet more tightly controlled. Regulatory constraints that have been debated in the tobacco control arena include prescriptive controls on emissions and ingredients,6 deletion of brand names and imagery and the introduction of generic packaging,7 government controlled non-profit tobacco distribution and sale8 and even discussion of the ban on the commercial sale of products.9 But Philip Morris International, for one, is sanguine about the regulatory environment it confronts. Philip Morris International notes that, ‘These matters constitute largely un-chartered territory for regulators’, therefore raising the prospect that the company can influence the process (or, as the company puts it, offering ‘a good opportunity for PMI to provide expertise and comprehensive solutions as a result of our transparent and supportive approach to reasonable regulation’).10
Litigation remains a real concern for the tobacco industry, in the US and elsewhere. While acknowledging that the litigation environment may be unpredictable, the companies state on their respective websites that they will vigorously contest any cases brought against them and that they have every confidence that they will prevail.11-13 Litigation against the tobacco industry is discussed in detail in Chapter 16.
In Australia and other developed countries, smoking will continue to become concentrated among the most disadvantaged sectors of the community and the industry will doubtless seek new ways to keep tobacco products as affordable as possible. In the US, the industry has reached its more ‘downscale’ customers by making donations to
104 Tobacco in Australia:Facts and Issues
Section: 10.22.2Date of last update: 26 March 2012
key groups supporting the homeless and the mentally ill, thereby giving them access to an important market, while permitting the industry a nod in the direction of corporate responsibility.14 In Australia, very low-cost, discount brands have been imported to appeal to this price sensitive market.15
10.22.2
Low and middle income country marketsThe global outlook for the tobacco industry is far from pessimistic. According to the World Health Organization:
‘Tobacco use continues to be the leading global cause of preventable death. It kills nearly 6 million people and causes hundreds of billions of dollars of economic damage worldwide each year. Most of these deaths occur in low- and middle-income countries, and this disparity is expected to widen further over the next several decades. If current trends continue, by 2030 tobacco will kill more than 8 million people worldwide each year, with 80% of these premature deaths among people living in low- and middle-income countries.’16
The comparative lack of tobacco regulation in many countries and government willingness to embrace tobacco growing and manufacturing in return for substantial financial inducements makes these markets ripe for industry exploitation and there is every sign that this is occurring.17 Investment by the international tobacco companies in foreign markets is typically associated with increased per capita consumption, particularly in low and middle income countries.18-20 Coupled with this is that in many countries smoking prevalence among young teenage girls is catching up with that of boys, use of cigarettes and other tobacco products is widespread among children, and many children are contemplating taking up smoking.20 Added to this, in countries where few women smoke, the female market is being aggressively targeted and the prevalence of female smoking is rising.21 And as British American Tobacco Australia points out, even if ‘smaller percentages of populations will smoke ... the number of adults in the world over the age of 20 is forecast to grow by 11% by 2015’.22
The 2011 World Health Organization report on the global tobacco epidemic shows that while progress has been made in advancing global tobacco, a minority of the population is still not protected by key policy reforms. See Figure 10.22.1.
Figure 10.22.1 Share of the world covered by selected tobacco control policies, 2010Note: The tobacco control policies depicted here correspond to the highest level of achievement
at the national level
Source: WHO 201116
0102030405060708090
100
TaxationAdvertising
bans
Massmedia
Warninglabels
Cessationprogrammes
Smokefreeenvironments
Monitoring46%
11%
14%
15%
28%
6% 8%
105Chapter 10: The tobacco industry in Australian society
Section: 10.22.2Date of last update: 26 March 2012
References1. Euromonitor International. Tobacco-Australia, September. London: Euromonitor International, 2010, [viewed 30 June 2011]. Available from: http://www.euromonitor.com/tobacco
2. Casben L. Tobacco companies rally against plain packaging. ABC News. Sydney: Australian Broadcasting Corporation, 2010, [viewed 16 August 2011]. Available from: http://www.abc.net.au/news/2010-04-29/tobacco-companies-rally-against-plain-packaging/414540
3. Fletcher N. Imperial Tobacco and BAT fall as Citi says smoking could disappear by 2050. The Guardian, (London) 2011:7 Jan. Available from: http://www.guardian.co.uk/business/marketforceslive/2011/jan/07/imperial-bat-smoking-disappear
4. Euromonitor International. So is tobacco heading for the exit over the next 30 years? London: Euromonitor International, 2011, [viewed 17 August 2011]. Available from: www.euromonitor.com/industries
5. Mejia A and Ling P. Tobacco industry consumer research on smokeless tobacco users and product development. American Journal of Public Health 2009;100(1):78–87. Available from: http://ajph.aphapublications.org/cgi/content/full/100/1/78?view=long&pmid=19910355
6. Deyton L, Sharfstein J and Hamburg M. Tobacco product regulation—a public health approach. The New England Journal of Medicine 2010;362(19):1753-6. Available from: http://www.nejm.org/doi/full/10.1056/NEJMp1004152
7. Freeman B, Chapman S and Rimmer M. The case for the plain packaging of tobacco products. Addiction 2008;103(4):580-90. Available from: http://www.ncbi.nlm.nih.gov/pubmed/18339104
8. Callard C, Thompson D and Collishaw N. Transforming the tobacco market: why the supply of cigarettes should be transferred from for-profit corporations to non-profit enterprises with a public health mandate. Tobacco Control 2005;14(4):278-83. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/4/278
9. Shahab L and West R. Public support in England for a total ban on the sale of tobacco products. Tobacco Control 2010;19(2):143. Available from: http://www.ncbi.nlm.nih.gov/pubmed/20378589
10. Calantzopoulos A. Remarks by Andre Calantzopoulos, Chief Executive Officer Philip Morris International Inc. JP Morgan Global Tobacco Conference, London, United Kingdom, June 29, 2007. Lausanne: Philip Morris International Inc, 2007, [viewed 12 February 2008]. Available from: http://www.altria.com/media/press_release/03_02_pr_2007_06_29_01.asp
11. Philip Morris International. Litigation. New York: Philip Morris International, 2011, [viewed 17 August 2011]. Available from: http://www.pmi.com/eng/tobacco_regulation/pages/litigation.aspx
12. Imperial Tobacco Group. Principal risks and uncertainties. Tobacco-related litigation. Bristol, UK: Imperial Tobacco Group, 2011, [viewed 17 August 2011]. Available from: http://www.imperial-tobacco.com/files/financial/reports/ar2010/index.asp?pageid=38
13. British American Tobacco. Litigation overview. London: British American Tobacco, 2011, [viewed 17 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO5WPF25?opendocument&SKN=1
14. Apollonio DE and Malone RE. Marketing to the marginalised: tobacco industry targeting of the homeless and mentally ill. Tobacco Control 2005;14(6):409-15. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/6/409
15. Squires R. Coles importing cheap cigarettes from Germany and selling them at discount prices. The Sunday Telegraph, (Sydney) 2010:18 Jul. Available from: http://www.news.com.au/business/coles-importing-cheap-cigarettes-from-germany-and-selling-them-at-discount-prices/story-e6frfm1i-1225893467835
16. World Health Organization. WHO report on the global tobacco epidemic, 2011. Executive summary. Geneva: WHO, 2011, [viewed 17 August 2011]. Available from: http://whqlibdoc.who.int/hq/2011/WHO_NMH_TFI_11.3_eng.pdf
17. Yach D and Bettcher D. Globalisation of tobacco industry influence and new global responses. Tobacco Control 2000;9(2):206-16. Available from: http://tobaccocontrol.bmj.com/cgi/content/abstract/9/2/206
18. Gilmore AB and McKee M. Exploring the impact of foreign direct investment on tobacco consumption in the former Soviet Union. Tobacco Control 2005;14(1):13-21. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/1/13
19. Stanton H. National economies suffer from tobacco scourge. CECHE Global Health and Environment Monitor 2005;13(Winter)
20. Wen CP, Cheng TY, Eriksen MP, Tsai SP and Hsu CC. The impact of the cigarette market opening in Taiwan. Tobacco Control 2005;14(suppl.1):i4-9. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/suppl_1/i4
21. World Health Organization. Gender, women, and the tobacco epidemic. The marketing of tobacco to women: global perspectives. Geneva: WHO, 2010, [viewed 17 August 2011]. Available from: http://www.who.int/entity/tobacco/publications/gender/en_tfi_gender_women_marketing_tobacco_women.pdf
22. British American Tobacco. Annual report and accounts 06. London: British American Tobacco, 2007, [viewed 17 August 2011]. Available from: http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO52AK34/$FILE/medMD6ZPCA4.pdf?openelement
