Traffickers In Human Misery
Ikechukwu Amaechi
My colleague and friend, Ugochukwu Ejinkeonye’s article, The Magnificent Poison House published on November 1, made an interesting reading as usual. Ever passionate, he brought his indubitable perspicuity to bear on an issue that should be of paramount concern to all.I am joining the debate today not necessary because of his open invitation to all of us to join him in waging his self-appointed moral crusade against the “unrepentant merchants of death,” meaning (tobacco companies) but to present certain facts at my disposal to enable the Nigerian government do the right thing. And the right thing to my mind is not to call for the total abolition of tobacco companies and their products, which in any case is not plausible since cigarette has not been classified as an illegal product or hard drug like cocaine. But the need for government to stringently control the activities of tobacco companies through legislation as it is the case in the West cannot be overemphasised.As part of my assessment in one of the first semester courses (Information Gathering and Analysis-1), I am expected to write an analytical feature on one of the
UK companies quoted on the London Stock Exchange. And guess what? My company is the British American Tobacco (BAT); the same company with the “magnificent poison house” along Lagos-Ibadan Expressway, which Ugochukwu wrote about.In the course of my extensive research on the company for the purpose of writing the article, I have stumbled on certain facts which to my mind will not only help in contextualising the debate but also help government to act appropriately. Here, I won’t bore you with the history of BAT. Suffice it to say that the company’s birth was the consequence of a 1902 joint venture agreement between the
United Kingdom’s Imperial Tobacco Company and the American Tobacco Company. The parent companies agreed not to trade in each other’s domestic territory and to assign trademarks, export businesses and overseas subsidiaries to the venture.BAT’s history ever since has been one of mergers, acquisition and de-mergers. Today, BAT with about 11 percent of the global market is the world’s second largest tobacco company, after Philip Morris which has 18 percent. Its international brands include Dunhill, Kent, State Express 555, Pall Mall, Rothmans, Peter Stuyvesant, Benson and Hedges, Winfield, John Player, Lucky Strike, Kool, and Viceroy, though BAT does not necessarily own the rights to all these brands in every nation they are marketed.At the same time, it owns local brands like Jockey Club in Argentina, Wills in India,
North
State in Finland, Courtleigh in South Africa, Xon in Uzbekistan, Yava Gold in
Russia, etc. Though BAT is based, and manufactures cigarettes in the
UK, it sells most of them abroad. In effect, it controls only six percent of the
UK market. Therefore, out of the 853 billion cigarettes which BAT reportedly sold worldwide in 2004 for instance, only a fraction was sold in the
UK.This fact explains the paradox of tobacco companies in recent times, which is also the challenge of third world countries including
Nigeria. In the last five years, BAT has increased its share price by 143 percent, despite increasing global restrictions on tobacco advertising. In January 2002, BAT shares were trading at £6.00 each. In five years, they have made a quantum leap, and are currently selling at £14.59. This is in spite of the fact that volume of its products continues to decline. In the 2006 third-quarter financial report which the company presented to the public on Thursday, October 26, operating profit rose eight percent to £2.1 billion. But at the same time, revenue slipped 1.7 percent to £2.44 billion. The slip in revenue was as a result of the decrease in the volume sold by its subsidiaries which fell 1.1 percent to 173.4 billion.Writing on the performance of BAT in the Daily Telegraph of Friday, October 27, 2006, Harry Wallop noted: “For a wheezing declining industry, cigarette manufacturing certainly has a knack of turning out decent figures.” And the question is; how could a company with diminishing volumes in the market be maximising shareholders’ value at the same time?BAT is doing well because the decrease in volume is not a global trend. While they are steadily losing their traditionally developed world markets in Europe due to increasing restrictions on tobacco advertising and anti-tobacco legislation, the tobacco companies are concentrating their energies in the third world market including
Nigeria where as usual, anything goes in the name of privatisation.In his third quarter report, Jan du Plessis, BAT chairman admitted that sales in
Western Europe fell because of higher taxes, prohibitions on advertising and smoking bans. The company sold 1.8 percent fewer cigarettes in
Europe in the first nine months of the year compared with the same quarter in 2005. The Lucky Strike brand suffered a four percent fall in volume for the quarter after poor sales in Germany and
Japan.On the contrary, sales and profit in
Africa’s tobacco market was on the upward swing. Let me crave your indulgence to quote du Plessis. “In
South Africa, despite the weaker average rand exchange rate, good profit growth was achieved as a result of higher margins. There was an improved product mix, as both Dunhill and Rothmans continued their strong growth, although market share was slightly down.“In
Nigeria, despite excise driven increases, market share grew. Higher prices, together with mix improvements and productivity gains, helped to deliver a higher profit.“In
Iran, volumes continued to grow and overall market share increased, resulting in higher profit. Profit in the Arabian Gulf markets rose as volumes increased, mainly driven by good results from Dunhill in
Saudi Arabia.”The paradox of increasing profit and share price in the face of shrinking volume is the outcome of strategic planning by BAT. Faced with a very hostile European market, the company has shifted attention to African countries where there are no laws to curtail their impunity and immoral market practices. Even where there are laws, they are observed more in the breach. European countries are daily tightening the noose on these merchants of death. But even at that, BAT had for so long found many imaginative ways to keep its brands in the public eye. It has particularly promoted its brands through the glamour of sports. In 1996, the company secured the sponsorship of the Cricket World Cup which was branded the “Wills World Cup”, thereby achieving a high level of brand recognition for the Wills cigarette brand in
India where young cricket fans were a key target market. Until recently, it had also used the glamour of motor sport – Formular 1 – to promote its Lucky Strike brand. In the
US, state governments are battling the tobacco companies with stringent legislation that are biting hard, while at the same time raising taxes on tobacco products. Recently, the state of California which accounts for about seven percent of total cigarette consumption in the
US initiated a legislation –Proposition 86 – which aims at quadrupling the excise tax on a pack of cigarettes to $3.47 from 87 cents. Three other states –Missouri, South Dakota and
Arizona – also had tobacco taxes on the ballot. These stringent legislations are aimed at promoting anti-smoking culture in countries that appreciate the dangers of cigarette to their citizenry. But besides governments, individuals whose lives have been ruined are also taking the battle to the tobacco companies globally. BAT for instance has been the subject of thousands of product liability cases for a number of years. Of course, these are countries where governments protect their citizens and individuals also know their rights and are always prepared to protect them using the law courts. In
Nigeria, these two cultures are lacking. As long as BAT pays huge taxes annually, which in any case are stolen by those in government, they could as well pour petrol on all Nigerians in the style of the general overseer of the Christian Praying Assembly, Rev. Dr. King and set them ablaze for all anybody cares. The government has nothing but absolute contempt for the welfare of the people and would always take sides with the multinationals against its own citizens as they are doing with the oil companies against the people of Niger Delta. It is not enough to ban outdoor advertising of tobacco products in
Nigeria, a ban which BAT ingeniously circumvents at will, there must be clear-cut legislation aimed at putting a leash on the activities of this company if our youth must be rescued from their evil clutches and saved from imminent catastrophe. If Europeans with all their advancement in medicine and well-equipped hospitals are still wary of the very harmful effects of tobacco consumption, what more Nigeria where available medical facilities are hardly adequate for the treatment of the most common of ailments.Again, anybody who has been lured into smoking with disastrous consequences can successfully sue BAT. These cases are won daily in Europe and America, why not
Nigeria? BAT should and could be held accountable for the death it is consciously hawking on the streets of
Nigeria, decimating our most productive population. Unless this will to hold them accountable is manifested, the company would continue with its nefarious trade – trafficking in human misery.