British American Tobacco

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Background

British American Tobacco (BAT) was established in 1902 when the Imperial Tobacco Company and the American Tobacco Company formed a new joint venture.[1] Headquartered in London in the United Kingdom (UK), its businesses operate in Australasia, Africa, Europe and the Americas.[2] It is the second largest tobacco company in the world, after Philip Morris International (PMI) and excluding the Chinese National Tobacco Corporation (CNTC).[3]

In its Business Company Profile 2017, BAT reported it sold 300 tobacco brands in 180 markets and had a 15% share in the global tobacco market.[4] Popular BAT cigarette brands include Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans.[5]

BAT owned 42.2% of Reynolds American Inc (RAI) shares from 2004 to 2017. BAT announced in January 2017 that it had agreed to acquire the remaining 57.8% stake it did not yet own.[6] This acquisition was completed by the end of 2017.[7]

In 2019, BAT held international interests with two other tobacco companies:[8][9]

  • ITC Private Limited (formerly known as the Indian Tobacco Company Private Limited ): In 1985, BAT and ITC set up a joint venture in Nepal, the Surya Nepal Private Limited (Surya Nepal).[10][11] BAT owns 29.7% of ITC shares.[12][13] According to media reports, BAT unsuccessfully attempted to increase its stake in ITC on several occasions.[14][15][16]
  • China National Tobacco Company (CNTC): in August 2013 BAT and CNTC established a joint venture named CTBAT, which is headquartered in Hong Kong.

In 1961, BAT diversified into paper, cosmetics and food industries. It also entered the retail industry acquiring Argos and Saks Fifth Avenue in the UK and US respectively. In the late 1980s, BAT moved into the insurance industry, acquiring Eagle Star, Allied Dunbar and Farmer’s Group in the UK. In the late 1990s BAT industries divested its non-tobacco business.[1] In the 2000s the company once again diversified, into non-cigarette tobacco and nicotine products. BAT founded and wholly owns the Nicoventures group of companies. Nicoventures Ltd was set up as a division of BAT in 2011, originally dedicated to the production of licensed nicotine products.[17][18] A new holding company was set up in 2012, and from 2014 two subsidiaries focussed on different types of product:

  • Nicoventures Trading Ltd – until 2014 named CN Creative, a company acquired by BAT in 2012. By 2014, this company was focussed on unlicensed products, including e-cigarettes[19]
  • Nicovations Ltd – in 2014, Nicoventures Ltd changed its name to Nicovations Ltd.[20] This company’s focus remained licenced (or ’regulatory approved’) inhaled nicotine products, for example, products licenced by the UK Medicines and Healthcare products Regulatory Agency (MHRA).[17] BAT had plans to develop a nicotine inhaler named Voke in a collaboration with the company Kind Consumer Limited, a project which was abandoned in January 2017.[21][22] By early 2018 the Nicovations website was no longer available, the company had no employees and its only business activity was the leasing of equipment.[23][24]

Two further related subsidiaries are registered in the UK: Nicoventures U.S. Ltd (2015) and Nicoventures Retail (UK) Ltd (2016/17).

Employees: Past and Present

Jack Bowles was appointed BAT's Chief Executive Officer in April 2019.[25] He succeeded Nicandro Durante.

A current list of BAT's Board of Directors can be found on the BAT website.

Other persons that currently work for, or have previously been employed with, the company:

Jeffries Briginshaw | Richard Burrows | Jeannie Cameron (see JCIC International) | Kenneth Clarke | Mark Cobben | David Crow | Nicandro Durante | David Fell | Ann Godbehere | Giovanni Giordano | Andrew Gray | Tomas Hammargren | Robert Lerwill | Jean-Marc Lévy | Adrian Marshall | Des Naughton | Christine Morin-Postel | Gerard Murphy | Shabanji Opukah | David O’Reilly | Kieran Poynter | Michael Prideaux | Anthony Ruys | Nicholas Scheele | Karen de Segundo | Naresh Sethi | Ben Stevens | Kingsley Wheaton | Neil Withington

Affiliations

Memberships and Partnerships

In 2019, BAT disclosed it was a member of the following associations:[26]

The American Chamber of Commerce to the European Union | British Chamber of Commerce in Belgium | BusinessEurope | Confederation of British Industry | Confederation of European Community Cigarette Manufacturers (CECCM) | ECMA | European Smoking Tobacco Association (ESTA) | Institute of Economic Affairs | International Chamber of Commerce (ICC) UK | International Trademark Association | ICC Business Action to Stop Counterfeiting and Piracy (BASCAP) | Kangaroo Group

A 2017 BAT entry on the EU Transparency Register listed more organisations including, the American European Community Association, the European Policy Centre, the European Risk Forum, the Ad Hoc Council (The European Government Business Relations Council, the now defunct European Smokeless Tobacco Council, The Mentor Group, the Tobacco Industry Platform (TIP), the Transatlantic Business Dialogue, Tobaksproducenterne (Tobacco Manufacturers Denmark), and the UK Tobacco Manufacturers' Association (TMA) .[27]

BAT is also involved in the Association of Convenience Stores, the Scottish Grocers' Federation, and the Eliminating Child Labour in Tobacco Growing Foundation (ECLT).[28] The ECLT has a partnership with the International Labour Organization (ILO), a United Nations (UN) agency, focussed on issues related to labour such as international labour standards, social protection and unemployment.[29]

BAT has previously been a member of the following associations: Czech Association for Branded Products | European Travel Retail Confederation | Federation of Wholesale Distributors | MARQUES | | Scottish Wholesale Association | Unite

In addition to the aforementioned memberships, BAT has provided financial support to:

Alliance of Australian Retailers | Anti-Counterfeiting Group | Benkert | Business Action for Africa[30] | Associate Parliamentary Corporate Responsibility Group | Business in the Community (UK) | Commonwealth Business Council | Conference Board[31] | European Council on Research, Development and Innovation[32] | European Science and Environment Forum | Forest | Forum for EU/US Legal-Economic Affairs | Global Reporting Initiative | Institute of Business Ethics | International Tax and Investment Center | International Tobacco Growers Association | The Common Sense Alliance | Rural Shops Alliance | VNO-NCW

Consultancies

Think Tanks

The following think tanks have a history of being funded by BAT:

Centre for European Reform | Centre for Policy Studies | Chatham House | European Policy Centre | European Science and Environment Forum | Fraser Institute | Free Market Foundation | Institute of Economic Affairs | Institute of Public Affairs | Niagara Institute (See John Luik)

Controversial Marketing Strategies

Targeting Women and Girls

Targeting Youth

Although BAT has stated that it is ‘committed to carry out youth smoking prevention’, the company has been accused of targeting youth in their marketing activities.[40][41]

Some of the countries where the company has been accused of such tactics, include: Argentina[42], Brazil[41], Ethiopia[43], Malawi[44], Mauritius[44], Nigeria[44], Sri Lanka, and Uganda.

Also see Education Strategy.

Tactics to Subvert Tobacco Control Campaigns and Policies

Using British Diplomats to Lobby Foreign Governments on its Behalf

Several instances have come to light of senior UK diplomats lobbying governments, in particular in low to middle income countries, on behalf of the tobacco company.

Intimidating Governments with Litigation or Threat of Litigation

BAT has legally challenged the following tobacco control measures in the respective countries:

Fabricating Support through Front Groups

In May 2012, BAT was asked to reveal the British-based think tanks it had funded during the previous five years, as well as those it had funded that were active in the plain packaging debate.

The company replied:

“British American Tobacco is happy to support those who believe in the same things we do – whether that be retailers against display bans or farmers against being forced out of growing tobacco;
  • Our support may be financial support, or resources in kind;
  • We do not tell these bodies what to say or how to spend the money;
  • Many of the bodies, in particular the retailers, feel deeply patronised at the suggestion they are merely industry stooges.”[46]

In May 2013, in response to questions asked at the company's Annual General Meeting by health advocacy Action on Smoking and Health, the company disclosed that it funded:

Also see: BAT Funded Lobbying Against Plain Packaging | The Plain Pack Group | Australia: Campaigning Websites | Australia: International Lobbying | Digital Coding & Tracking Association (DCTA)

Corporate Social Responsibility (CSR) Initiatives

On its website on Corporate Social Investment (accessed June 2017), BAT lists three global themes that focus its CSR activities:

  • contributions to sustainable agriculture and environment
  • empowerment of individuals and communities where it operates
  • activities that enrich civic (public and community) life

In contrast, TCRG research has revealed how BAT has used CSR and stakeholder management activities in the African region to promote their corporate image.[47]

Others have documented similar evidence, including in Malaysia[48] and Malawi.[49]

Also see BAT's Involvement with Durham University.

Discrediting Science and Scientists

A review of tobacco industry internal documents covering the period 1985 - 1995, revealed that BAT liaised with scientists and was selective on what findings to make public.[50]

According to the study's authors, “At times scientists seemed to be acting more like public relations specialists than scientists. One 1988 BAT memorandum on the issue of 'Communication of ETS information' revealed one employee who was anxious about having certain scientists defend their position on ETS in public fearing they might get into trouble if they were too rational”.[50]

Involvement in Tobacco Smuggling

Next Generation Products

To improve the tobacco industry’s sustainability, tobacco companies are investing in tobacco and nicotine products that, unlike cigarettes, could have growth potential in developed markets. These products are often referred to as Next Generation Products (NGPs), and are often linked to tobacco companies’ harm reduction strategies.

NGPs marketed by BAT include:

  • E-cigarettes – according to the BAT Annual Report 2016, the company has “the world’s largest vapour business outside of the US”, manufactured under the trade name “Vype”.[51][22]
  • Heated Tobacco Products (HTPs) – the first BAT HTP was launched in Romania in 2015 under the brand iFuse. The next was glo, launched in Japan in 2016.[22]

TobaccoTactics Resources

Relevant Link

TCRG Research

  • G. Fooks, A. Gilmore, J. Collin et al. The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR. Journal of Business Ethics, 2013, 112:283. doi:10.1007/s10551-012-1250-5

References

  1. ↑ 1.0 1.1 British American Tobacco, Our History: A time-line, undated, accessed February 2017
  2. ↑ British American Tobacco, Website, undated, accessed February 2017
  3. ↑ Euromonitor International, Company Shares (Global-Historical Owner) Retail Volume % Breakdown, World 2010-2015. Available from www.euromonitor.com (behind paywall), accessed February 2017
  4. ↑ Reference for Business, Company Profile, Information, Business Description, History, Background Information on British American Tobacco PLC, 2017, accessed October 2019
  5. ↑ British American Tobacco, Our Brands, 2017, accessed February 2017
  6. ↑ British American Tobacco, BAT announces agreement to acquire Reynolds, News release 17 January 2017, accessed October 2019
  7. ↑ British American Tobacco, BAT completes Acquisition of Reynolds, 25 July 2017, accessed October 2019
  8. ↑ British American Tobacco, British American Tobacco Annual Report 2015, 2017, accessed October 2019
  9. ↑ British American Tobacco, Transforming Tobacco, Annual Report 2018, accessed October 2019
  10. ↑ ITC Limited, Company Profile: History and Evolution, 2017, accessed June 2017
  11. ↑ Surya Nepal Private Limited, Company Profile, 2017, accessed May 2017
  12. ↑ Tobacco Reporter, Indian government to sell ITC stake, 25 February 2016, accessed October 2019
  13. ↑ S. Mitra, British American Tobacco has no plan to increase stake in ITC, Business Standard, 15 January 2014, accessed May 2017
  14. ↑ S. Reckhi, R. Banerjee, Raising the Stake, indiatoday, 31 December 1994, accessed May 2017
  15. ↑ BAT not averse to raising stake in ITC, The Times of India, July 2002, accessed May 2017
  16. ↑ I. Gupta, T. Surendar, Remaking Indian Tobacco Co., Forbes, 30 June 2010, accessed October 2019
  17. ↑ 17.0 17.1 Nicovations Ltd, Frequently Asked Questions, undated, archived April 2017, accessed October 2019
  18. ↑ C. Cookson, BAT aims to smoke out nicotine lovers who find cigarettes a drag, Financial Times, 5 April 2011, available on BAT.com, accessed October 2019
  19. ↑ Nicoventures Trading Limited, Company No 06665343, Overview, Companies House, accessed October 2019
  20. ↑ Nicovations Limited, Company No 07412694, Overview, Companies House, accessed October 2019
  21. ↑ M. Geller, BAT quits nicotine inhaler to focus on vaping, 5 January 2017, accessed May 2017
  22. ↑ 22.0 22.1 22.2 British American Tobacco, Our product portfolio, 2017, accessed May 2017
  23. ↑ Wayback Machine, Nicovations.com, captured 22 March 2017
  24. ↑ Nicovations Limited, Full accounts made up to 31 December 2018, Companies House, accessed October 2019
  25. ↑ A.S. Nair, BAT picks insider Bowles as CEO to oversee tobacco shift, Reuters, 25 September 2018, accessed October 2019
  26. ↑ EU Transparency Register: British American Tobacco, update 21 May 2019, accessed October 2019
  27. ↑ Transparency Register, accessed March 2017
  28. ↑ The Eliminating Child Labour in Tobacco Growing Foundation, A sector-wide coalition against child labour. Donors, undated, accessed October 2019
  29. ↑ International Labour Organization, Mission and impact of the ILO, 2017, accessed November 2017
  30. ↑ Business Action for Africa, Business Partnerships for Development in Africa. Redrawing the boundaries of possibility, accessed October 2019
  31. ↑ Conference Board, Work-Life and Diversity, accessed March 2017
  32. ↑ Conference Board. Board Europe, Work-Life and Diversity, July/August 2002, accessed October 2019
  33. ↑ Transparency Register - Bernstein Public Policy, 19 April 2016, accessed March 2017
  34. ↑ Transparency Register - Business Platform Europe, 21 March 2016, accessed March 2017
  35. ↑ Transparency Register - EUTOP Brussels SPRL, 22 December 2016, accessed March 2017
  36. ↑ Transparency Register - Pappas & Associates, 23 May 2016, accessed March 2017
  37. ↑ Red Flag, 30 September 2016, accessed March 2017
  38. ↑ Transparency Register - Simply Europe, 03 April 2016, accessed March 2017
  39. ↑ 39.0 39.1 Corporate Europe Observatory, Obscured by the Smoke - British American Tobacco's Deathly Lobbying Agenda in the EU, June 2009, accessed October 2019
  40. ↑ British American Tobacco, Youth smoking prevention, undated, accessed March 2017
  41. ↑ 41.0 41.1 Campaign for Tobacco Free Kids, British American Tobacco, 2010, accessed October 2019
  42. ↑ S. Braun et al, Tobacco industry targeting youth in Argentina, Tobacco Control, 2008;17(2),111-7
  43. ↑ F. Ashall, My experience with British American Tobacco’s illegal and unhealthy advertising in Ethiopia, supported by Ethiopian authorities, The Great Tobacco Plague: A doctor’s experience of the horrors of tobacco, undated, accessed March 2017
  44. ↑ 44.0 44.1 44.2 Tobacco giant ‘breaks youth code’, BBC NEWS, June 2008, accessed March 2017
  45. ↑ J. Hunt, Tobacco industry fails in last appeal against plain packaging, Scottish Legal News, 12 April 2017, accessed April 2017
  46. ↑ BAT Press Office, Email to Tobacco Control Research Group, 25 May 2012
  47. ↑ G. Fooks, A. Gilmore, J. Collin et al. The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR. Journal of Business Ethics, 2013, 112:283. doi:10.1007/s10551-012-1250-5
  48. ↑ S. Barraclough, M. Morrow. A grim contradiction: The practice and consequences of corporate social responsibility by British American Tobacco in Malaysia. Social Science and Medicine, April 2008, 66(8),1784-6
  49. ↑ M.G. Otanez, M.E. Muggli, R.D. Hurt et al. Eliminating child labour in Malawi: a British American Tobacco corporate responsibility project to sidestep tobacco labour exploitation. Tobacco Control, 2006;15:224-30
  50. ↑ 50.0 50.1 J Drope, S Chapman. Tobacco industry efforts at discrediting scientific knowledge of environmental tobacco smoke: a review of internal industry documents. Journal of Epidemiology & Community Health, 2001;55:588-594
  51. ↑ British American Tobacco, Annual Report 2016, 2017, accessed October 2019
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