Profits, death and disease: big tobacco’s business model

June 14 / 138

One billion people are expected to die as a result of smoking this century. But globally, tobacco remains a growth industry, writes Professor of Public Health at the Melbourne School of Population and Global Health Rob Moodie.

Lung cancer, a leg amputation, or gasping for air as a result of emphysema are not fun ways of ending one’s life. All are common outcomes of smoking, and if current global patterns of smoking continue – 50 per cent of young men and 10 per cent of young women becoming smokers – one billion people are estimated to die this century. And they will be mainly from low- and middle-income countries.

In Australia, it is perhaps hard to fathom that three out every five men smoked in the 1950s, yet levels like this are the norm in countries such as Indonesia, China, Russia and Egypt.

There is one, and only one, major driver of this global epidemic – the tobacco industry. The industry is dominated by six big firms: China National Tobacco Corporation, Philip Morris International, British American Tobacco, Japan Tobacco International, Imperial Tobacco and the Altria Group/Philip Morris USA.

These companies are not shrinking away. In fact, they have rapidly shifted their attention to the developing world by implanting themselves firmly in local economies, where they can operate with little regulation or controls. Tobacco retail sales have had an average annual growth of 2 per cent in low- and middle-income countries compared to 0.1 per cent in high income countries in the 12 years to 2009.

China has a major problem. With 300 million people smoking, 75 per cent of its adults do not have a comprehensive understanding of the health hazards of smoking. The tobacco industry is a government-owned monopoly, and the ministry that oversees the tobacco monopoly also controls key aspects of tobacco control policy, including prices and warning labels. It is hard to imagine a greater conflict of interest.

Tobacco is one of the great commercial successes of our time. They have a very simple model, which needs little innovation or R&D – simply because the product sells itself through addiction. Their aim is to get young people to take it up, so they will continue for life and can then ensure their children smoke (children of smokers are twice as likely to smoke as non-smokers). The fact that half of their clients will die, on average, 12 years prematurely is of no concern to them.

They have built the perfect model of intergenerational addiction and early death. Their stocks, yields and margins are, unlike their products, very healthy. It is estimated that $A8.5 billion of Australia’s super funds are invested in tobacco companies, with very few Australians aware they might be supporting the tobacco industry. So despite the fact that the tobacco industry ranks the lowest in the reputation index, they still manage to generate enormous profits.

As they have done in countries such as Australia and the United States, tobacco companies in the developing world use intimidatory, highly unethical tactics to pursue their sales. They bias research findings, co-opt policy makers and health professionals, they donate to and lobby politicians and public officials to oppose public regulation and try to influence voters to oppose public health regulation.

In Africa, tobacco companies are threatening to sue countries claiming their laws violate international legal obligations. It is worth recalling that these countries have virtually no capacity to defend themselves in court and the transnational companies have far bigger bank reserves than the countries themselves.

The world has responded with the establishment of the World Health Organization’s Framework Convention of Tobacco Control in 2005. It was developed in response to the globalisation of the tobacco epidemic, and does represent a major advance for tobacco control.

But the majority of countries are yet to implement the policies that work (taxation, advertising bans, smoke-free environments, health warnings and media campaigns). This is because many national governments, the international development community, and philanthropic groups (with the admirable exception of Bloomberg and the Gates foundations) have simply not woken up to the huge preventable death and disability toll related to tobacco.

According to the Institute for Health Metrics and Evaluation, health funding for tobacco control totalled $US68 million in 2011, less than 1/100th the amount spent on HIV/AIDS, and of course a tiny amount compared to the $US1.7 trillion spent on arms in the same year.

The fact that the tobacco industry can continue to get away with causing such devastating levels of premature death and illness is because they have become “part of the furniture” in so many countries. It is only over the last few decades that smoking has become much less normal or “cool” in wealthier countries.

Ask any executive in a tobacco company if they’d like their children to smoke and you can be sure of the answer – it will be a resounding no! Because they’ve understood the science of tobacco and they know it is addictive and it kills prematurely. But they are still happy to cajole, convince, and promote their deadly products to billions across the globe. To me that simply stinks.

This is an edited version of a piece originally published by The Conversation.

In February the University began the journey towards becoming tobacco-free. Members of the University community and visitors are asked not to smoke anywhere except within the Designated Smoking Areas (DSAs).

Staff can support this initiative by registering their interest in becoming Ambassadors for the program.

Ambassadors will remind people not to smoke on campus except within the DSAs, point out the locations of these, and, if appropriate, inform people of the support the University provides for those who wish to quit smoking. All Ambassadors will receive support and training from Wellbeing Services.

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