MS 10.30-12.00 Main sessions
TOBACCO, TRADE AND EASTERN EUROPE
- AUTHOR: G Connolly
- INSTITUTION: Department of Public Health, Office for Non-Smoking and Health, Massachusetts, USA
Since the markets of Central and Eastern Europe were opened, four major transnational tobacco companies (TTCs) and some smaller ones have acquired interest in 34 former state cigarette monopolies investing $1.6 billion in 22 of the plants where data is available. If 6 pending plant acquisitions are included, the long term investment rises to $2.7 billion. Production data is available for 30 factories and is 360 billion cigarettes. If 6 pending plants are included the number rises to 400 billion cigarettes, twice the total exported by the US in 1993 and 75% total US domestic consumption. Prior to TTC entry advertising was prohibited by regulation in many nations. The TTCs ignored these regulations and introduced advertising on a wide scale. Governments subsequently banned or attempted to ban advertising. The TTCs either ignored these bans or lobbied to weaken the laws. The TTCs have also lobbied against tax increases and clean air legislation. The TTCs have acquired substantial interest in the market and secured the tools to control future demand.
The strategy is clear, maximize profits in the shrinking US market and use the capital to acquire new markets overseas for future growth and profitability.
Smoke Free Europe Conference Abstracts - 19 SEP 1996
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