British American Tobacco
British American Tobacco p.l.c. (BAT) is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products including electronic cigarettes. The company, established in 1902, is headquartered in London, England. As of 2021, it is the largest tobacco company in the world based on net sales and the third largest seller of vapes in the UK.[4][5]
BAT has operations in around 180 countries and its cigarette brands include Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans. Its brands also include Velo, Vuse[6] and Glo.[7]
BAT has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index.[8] It has a secondary listing on the Johannesburg Stock Exchange. BAT plc ordinary shares are also listed on the New York Stock Exchange in the form of American Depositary Shares.
Other affiliates[edit]
British American Tobacco Ghana Limited is a public limited company operated by British American in Ghana.[39] The company is listed (GSE: BAT) on the stock index of the Ghana Stock Exchange, the GSE All-Share Index. It was formed in 1999 out of a merger between the Pioneer Tobacco Company and Meridian Tobacco.[40]
Controversies[edit]
Ignoring the cancer risks of cigarettes[edit]
As far back as 1958, BAT had information that cigarettes cause cancer. Three senior BAT scientists – H.R. Bentley, D.G.I. Felton, and W.W. Reid – travelled to the United States that year and talked to dozens of experts inside and outside of the tobacco industry.[54] According to industry documents, all but one of those consulted believed a connection between cigarettes and cancer had been proved.[55]
Smoking bans[edit]
Industry documents from the 1970s to the late 1990s shows that tobacco companies were seriously concerned about fatwas against smoking by Muslim jurists in Muslim majority countries.[56] In 1996, an internal document from British American Tobacco warned that, because of the spread of "extremist views" from fundamentalists in countries such as Afghanistan, the industry would have to "prepare to fight a hurricane".[56]
Nigerian lawsuit[edit]
The Nigerian federal government filed a lawsuit against BAT and two other tobacco companies in 2007. Nigeria sought $42.4 billion, $34.4 billion of which the government seeks in anticipation of the future cost of treating Nigerians for tobacco-related illnesses. It also sought $1.04 billion as a fine for the companies' advertising and marketing campaign allegedly targeting Nigerian youth, and has asked the companies to fund an awareness campaign to educate young people about the dangers of their product. Several Nigerian state governments filed similar petitions.[57] The government withdrew its lawsuit in February 2008.[58]
Marketing practices[edit]
In 2008, the company was the subject of a BBC Two documentary, in which Duncan Bannatyne investigated the marketing practices of the company in Africa and specifically the way the company targets younger Africans with branded music events, competitions and the sale of single cigarette sticks. Many of the practices uncovered by Bannatyne appeared to break BAT's own code of conduct and company standards. Towards the end of the programme, Bannatyne interviewed Chris Proctor, Head of Science and Regulation, in which Proctor admitted that advertisements targeting children from three African countries were 'disappointing'.[59] In many of these undeveloped countries, the awareness of health risks from smoking is very low or nonexistent.[60]
In September 2001, BAT invested US$7.1 million in North Korean state-owned enterprise called the Korea Sogyong Trading Corporation, which employs 200 people in Pyongyang to produce up to two billion cigarettes a year. The operation is run by BAT's Singapore Division. Brands of cigarettes produced are Kumgansan, Craven A and Viceroy. BAT claims that the cigarettes are produced only for consumption in North Korea, although there are allegations that the cigarettes are smuggled for sale overseas.[61]
British American Tobacco was declared the winner of the 2008 Roger Award, the award for the worst transnational corporation operating in New Zealand.[62]
British American Tobacco spent more than €700,000 lobbying the EU in 2008, up to four times as much as the company declared on the EU's register of interest representatives, according to a report by Corporate Europe Observatory. The report argues that BAT's hidden lobbying activities, which are clearly not in the public interest, should be exposed to public scrutiny.[63]
Canadian class action lawsuit[edit]
The three largest Canadian tobacco companies, Imperial Tobacco Canada (a division of British American Tobacco), JTI-Macdonald Corp and Rothmans Benson & Hedges, were the subject of the largest class action lawsuit in Canadian history. The case started on 12 March 2012 in Quebec Superior Court, and the companies face a potential payout of C$27 billion (US$21.6 billion) in damages and penalties. In addition, a number of Canadian provinces are teaming to sue tobacco companies to recover healthcare costs caused by smoking.[64]
On 1 June 2015, Quebec Superior Court Justice Brian Riordan has awarded more than $15 billion to Quebec smokers in a landmark case that pitted them against three Canadian cigarette giants, including JTI-Macdonald Corp.[65][66]
Australian lawsuit[edit]
In 2012, British American Tobacco, along with Philip Morris International and Imperial Tobacco, sued the Australian Commonwealth government. At the High Court of Australia, they argued that the Commonwealth's plain packaging legislation was unconstitutional because it usurped the companies' intellectual property rights and good will on other than just terms. However, the challenge was unsuccessful.[67]
HMRC fine for oversupply[edit]
In November 2014, Her Majesty's Revenue and Customs (HMRC) fined BAT £650,000 after it determined that the company glutted the Belgian market with tobacco products with the likelihood these products would illegally find themselves back into the UK, with UK excise taxes not paid. The event highlighted a tobacco-smuggling issue that many anti-tobacco activists have been attempting to bring to light for years. Following several investigations, HMRC reportedly seized more than 1.4 billion cigarettes and 330 tons of hand rolling tobacco in 2013–2014. BAT denied all claims and described the allegation and fine as "unjustified".[68]
Bribery and threats in Africa[edit]
In late November 2015, an episode of BBC's Panorama program alleged that BAT was bribing officials in Rwanda, Burundi and Kenya in exchange for their limiting the implementation of the WHO's Framework Convention on Tobacco Control in their respective countries. The episode showed documents provided by whistleblower Paul Hopkins, who worked for BAT in Kenya for 13 years. BAT denied the claims.[69]
In 2017, it was reported that BAT and other tobacco companies used a mixture of threats and bullying behaviour to stop or lessen the implementation of anti-smoking legislation in at least eight African countries.[70] One document showed that in Uganda BAT stated that the Tobacco Control Act flew in the face of the country's constitution. Another document showed that lawyers acting on behalf of BAT requested that the high court in Kenya "quash in its entirety" anti-smoking legislation.[70]
The Serious Fraud Office opened a 'formal investigation' in August 2017 based on the dossier of evidence supplied by former employee and whistleblower Paul Hopkins. The formal investigation is based on claims by Hopkins that BAT had paid bribes to government officials in Kenya, Burundi, Rwanda and Comoros to undermine tobacco control regulations in the African market which is the only market showing growth. BAT responded by classifying Hopkins as "a rogue former employee". BAT Chief Executive Nico Durante said BAT operated in 200 countries and he could not give a 100% guarantee that everything was being done by the book.[71][72]
In January 2021, the Serious Fraud Office closed its investigation into corruption at BAT after concluding that the evidence gathered “did not meet the evidential test for prosecution as defined in the Code for Crown Prosecutors”.[73]
On 14 September 2021, in a report published by the NGO STOP, the NGO accused British American Tobacco of having distributed more than $600,000 in the form of cash, cars or campaign donations to dozens of politicians, legislators, civil servants, journalists and employees of competing companies between 2008 and 2013.[74]
Pakistani lobbying efforts[edit]
In April 2015, medical experts and anti-tobacco campaigners accused Philip Barton, the British High Commissioner to Pakistan, of lobbying for BAT interests. The group released photos showing Barton attending a meeting on 13 March in Islamabad, where BAT executives attempted to convince the Pakistani Finance and Health Minister to veto plans requiring large health warnings on cigarette packets.[75] This activity was deemed contrary to Foreign and Commonwealth Office (FCO) policy. It followed an earlier incident when the British Ambassador to Panama was reprimanded for similar activity on BAT's behalf.[76]
Tobacco marketing in unstable nations and conflict zones[edit]
In August 2017, former employee and whistleblower Paul Hopkins released internal documents to The Guardian, a British newspaper, claiming British American Tobacco actively made efforts to market and sell its products in unstable, deeply impoverished nations and conflict zones, including Somalia, South Sudan, Syria and Iraq. Leaked PowerPoint presentations from 2011 included details of strategies to continue selling black-market cigarettes "in black paper bags" in parts of Somalia controlled by the fundamentalist Islamic militant group Al-Shabaab, plans to develop "a consumer relevant brand portfolio" and "sustainable... volume growth" in South Sudan just two days before the nation gained independence, and the active marketing and growth of the Kent cigarette brand in Iraq and Syria, despite "volatile markets" in the middle of the Iraq War and Syrian Civil War, respectively.[77]
In February 2021, the Organized Crime and Corruption Reporting Network (OCCRP) published an investigation according to which trafficking of BAT cigarettes had helped finance jihadist and separatist groups in northern Mali using, among other mechanisms, a system of oversupplying the country with tobacco. This has allowed billions of cigarettes to be smuggled out of the country.[78]
In April 2023, a subsidiary admitted that it had sold cigarettes to North Korea. This act is a violation of the existing sanctions imposed by the US against North Korea. Based on the investigations of US authorities, the activity spanned for ten years—from 2007 to 2017. Because of this breach, BAT is obligated to pay $635m (£512m) and interests to US authorities. Attorney General Matthew Olsen¸ DOJ's assistant described the settlement fee as DOJ's first and largest single North Korean sanctions penalty.[79]
