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Threats, bullying, lawsuits: tobacco industry’s dirty war for the African market

Revealed: In pursuit of growth in Africa, British American Tobacco and others use intimidatory tactics to attempt to suppress health warnings and regulation

British American Tobacco (BAT) and other multinational tobacco firms have threatened governments in at least eight countries in Africa demanding they axe or dilute the kind of protections that have saved millions of lives in the west, a Guardian investigation has found.

BAT, one of the world’s leading cigarette manufacturers, is fighting through the courts to try to block the Kenyan and Ugandan governments’ attempts to bring in regulations to limit the harm caused by smoking. The giant tobacco firms hope to boost their markets in Africa, which has a fast-growing young and increasingly prosperous population.

In one undisclosed court document in Kenya, seen by the Guardian, BAT’s lawyers demand the country’s high court “quash in its entirety” a package of anti-smoking regulations and rails against what it calls a “capricious” tax plan. The case is now before the supreme court after BAT Kenya lost in the high court and the appeal court. A ruling is expected as early as next month.

BAT in Uganda asserts in another document that the government’s Tobacco Control Act is “inconsistent with and in contravention of the constitution”.

The Guardian has also seen letters, including three by BAT, sent to the governments of Uganda, Namibia, Togo, Gabon, Democratic Republic of Congo, Ethiopia and Burkina Faso revealing the intimidatory tactics that tobacco companies are using, accusing governments of breaching their own laws and international trade agreements and warning of damage to the economy.

Extract – court document

“The Regulations are unlawful in their entirety as a result of procedural impropriety … The warning requirements [on cigarette packets] constitute an unjustifiable barrier to international trade.”

A petition by British American Tobacco Kenya to the country’s high court against aspects of the Kenyan government’s proposed tobacco regulations, 16 April 2015

BAT denies it is opposed to all tobacco regulation, but says it reserves the right to ask the courts to intervene where it believes regulations may not comply with the law.

Later this month, BAT is expected to become the world’s biggest listed tobacco firm as it completes its acquisition of the large US tobacco company Reynolds in a $49bn deal, and there are fears over the extent to which big tobacco can financially outmuscle health ministries in poorer nations. A vote on the deal by shareholders of both firms is due to take place next Wednesday, simultaneously in London at BAT and North Carolina at Reynolds.

Professor Peter Odhiambo, a former heart surgeon who is head of the government’s Tobacco Control Board in Kenya, told the Guardian: “BAT has done as much as they can to block us.”

Experts say Africa and southern Asia are urgent new battlegrounds in the global fight against smoking because of demographics and rising prosperity. Despite declining smoking and more controls in some richer countries, it still kills more than seven million people globally every year, according to the WHO, and there are fears the tactics of big tobacco will effectively succeed in “exporting the death and harm” to poorer nations.

There are an estimated 77 million smokers in Africa and those numbers are predicted to rise by nearly 40% from 2010 levels by 2030, which is the largest projected such increase in the world.

In Kenya, BAT has succeeded in delaying regulations to restrict the promotion and sale of cigarettes for 15 years, fighting through every level of the legal system. In February it launched a case in the supreme court that has already halted the imposition of tobacco controls until probably after the country’s general election in August, which are being contested by parliamentarians who have been linked to payments by the multinational company.

Extract – court document

“[A proposal for a new 2% tax on the industry in Kenya] … is arbitrary, capricious and inaccessible … it will have a significant effect on cigarette manufacturers and importers putting at risk further investment and direct and indirect employment opportunities in Kenya.”

A petition by British American Tobacco Kenya to the country’s high court against aspects of the Kenyan government’s proposed tobacco regulations, April 16th 2015

In Uganda, BAT launched legal action against the government in November, arguing that the Tobacco Control Act, which became law in 2015, contravenes the constitution. It is fighting restrictions that are now commonplace in richer countries, including the expansion of health warnings on packets and point-of-sale displays, arguing that they unfairly restrict its trade.

The court actions are brought by BAT’s local affiliates, BAT Kenya and BAT Uganda, but approved at Globe House, the London headquarters of the multinational, which receives most of the profits from the African trade. In its 2016 annual report, BAT outlined the “risk” that “unreasonable litigation” would be brought in to control tobacco around the world. Its response was an “engagement and litigation strategy coordinated and aligned across the Group”.

‘Focus on emerging markets’

At its annual meeting in March, chairman Richard Burrows toasted a “vintage year” for BAT, as profits rose 4% to £5.2bn after investors took their cut – their dividend had increased by 10%. When asked about the legal actions in Africa, he said tobacco was an industry that “should be regulated … but we want to see that regulation is serving the correct interests of the health mission and human mission which should lie behind it”.

Extract – court document

“Your Petitioner alleges and shall demonstrate that the Tobacco Control Act, read as a whole, has the effect of unjustifiably singling out the tobacco industry for discriminative treatment.”

A petition of British American Tobacco Uganda in the constitutional court against the Ugandan government’s Tobacco Control Act

So, “from time to time it’s necessary for us to take legal action to challenge new regulation” which he said was led by “the local board”.

BAT says it is “simply not true that we oppose all tobacco regulation, particularly in developing countries”. Tobacco should be appropriately regulated as a product that has risks to health, it said, but “where there are different interpretations of whether regulations comply with the law, we think it is entirely reasonable to ask the courts to assist in resolving it”. It was opposed to only a handful of the issues in Kenya’s regulations, not the entirety, it said in a statement.

Although most countries in Africa have signed the World Health Organisation (WHO) treaty on tobacco control, none has yet fully implemented the smoking restrictions it endorses.

The WHO predicts that by 2025, smoking rates will go up in 17 of the 30 Africa-region countries from their 2010 level. In some countries a massive hike is expected – in Congo-Brazzaville, from 13.9% to nearly half the population (47.1%) and in Cameroon from 13.7% to 42.7%. In Sierra Leone it will be 41.2% (74% among men) and in Lesotho 36.9%.

In contrast, research showed last year that just 16.9% of adults smoke in the UK; and last month new figures showed UK heart disease deaths had fallen 20% since that country’s indoor smoking ban.

“The tobacco industry is now turning its focus toward emerging markets in sub-Saharan Africa, seeking to exploit the continent’s patchwork tobacco control regulations and limited resources to combat industry marketing advances,” said Dr Emmanuela Gakidou and colleagues at the Institute for Health Metrics and Evaluation at the University of Washington in Seattle, publishing an analysis of smoking prevalence around the world in the Lancet in April.

Extract – letter

Uganda’s economy has “benefitted… significantly” from BAT’s tobacco business, employing 200 Ugandans and 1500 extra in the tobacco buying season. “This has helped to alleviate poverty and improve welfare in urban and rural areas …”

Extracts of a letter from Jonathan D’Souza, managing director of BAT Uganda to the chairperson of the Uganda Parliamentary committee on health, 14 April 2014

Africa’s growing numbers of children and young people, and its increasing wealth, represent a huge future market for the tobacco industry. The companies deny targeting children and cannot sell packs smaller than 10, but a new study carried out in Nairobi by the Johns Hopkins school of public health in the US and the Kenya-based Consumer Information Network found vendors selling cigarettes along the routes children take to walk to primary schools.


Stalls sell single Dunhill, Embassy, Safari and other BAT cigarette sticks, costing around 4p (5 cents) each, alongside sweets, biscuits and fizzy drinks. The vendors split the packets of 20 manufactured by BAT. “They are targeting children,” said Samuel Ochieng, chief executive of the Consumer Information Network. “They mix cigarettes with candies and sell along the school paths.”

BAT said that its products were for adult smokers only and that it would much prefer that stalls sold whole packets rather than single sticks, “given our investment in the brands and the fact there are clear health warnings on the packs.

“Across the world, we have very strict rules regarding not selling our products to retailers located near schools. BAT Kenya provides support to many of these independent vendors, including providing stalls painted in non-corporate colours, and providing youth smoking prevention and health warnings messages. We also educate vendors to ensure they do not sell tobacco products near schools.”

Links with politicians

The Kenya case, expected to be heard after the elections on 8 August, is seen as critical for the continent. If the government loses, other countries will have less appetite for the long and expensive fight against the wealthy tobacco industry.

BAT has around 70% of the Kenyan market; its Kenyan competitor, Mastermind, has joined in the legal action against the government.

Extract – letter

“If these measures are brought into effect, the economic and social impact will be extremely negative. They could even threaten the continuation of our factory which has operated in Bobo Dioulasso for more than fifty years with more than 210 salaried employees.”

Excerpt from letter from Imperial Tobacco to the prime minister of Burkina Faso, 25 January 2016, concerning new regulations on plain cigarette packaging and large graphic health warnings.

Concerns have been raised about links between politicians and the tobacco companies. “There are allegations of some of them having been bribed in the past,” said Joel Gitali, chief executive of the Kenya Tobacco Control Alliance.

BAT whistleblower Paul Hopkins, who worked in Africa for BAT for 13 years, told a British newspaper he paid bribes on the company’s behalf to the Kenya Revenue Authority for access to information BAT could use against its Kenyan competitor, Mastermind. Hopkins has also alleged links between certain prominent opposition Kenyan politicians and two tobacco companies, BAT Kenya and Mastermind. Hopkins, who says he alerted BAT to the documents before the company made him redundant, claimed BAT Kenya paid bribes to government officials in Burundi, Rwanda and the Comoros Islands to undermine tobacco control regulations. Gitali is concerned about the outcome of the election: “If the opposition takes over government we shall be deeply in the hands of the tobacco companies.”

BAT denies any wrongdoing. A spokesperson said: “We will not tolerate improper conduct in our business anywhere in the world and take any allegations of misconduct extremely seriously. We are investigating, through external legal advisors, allegations of misconduct and are liaising with the Serious Fraud Office and other relevant authorities.”

Extract – letter

“Once the decision to smoke is taken by an adult smoker, the pack provides adult consumers with pertinent information”

British American Tobacco letter to the prime minister of Gabon, 1 January 2012

‘We grow up dreaming we can be one of them’

Tih Ntiabang, regional coordinator for Africa of the Framework Convention Alliance – NGOs that support the WHO treaty – said the tobacco companies had become bolder. “In the past it used to be invisible interference, but today it is so shameful that it is so visible and they are openly opposing public health treaties like the case in Kenya at the moment … Today they boldly go to court to oppose public health policy. Every single government is highly interested in economic growth. They [the tobacco companies] know they have this economic power. The budget of tobacco companies like BAT could be as much as the whole budget of the Africa region.

“Our health systems are not really well organised. Our policy makers can’t see clearly what are the health costs of inaction on tobacco control because our health system is not very good. It puts the tobacco industry at an advantage on public health.”

The sale across the whole of Africa of single cigarette sticks was a serious problem because it enabled children to buy them. “They are extremely affordable. Young teenagers are able to purchase a cigarette. You don’t need £1 for a pack of 20,” he said.


BAT has a reputation in Africa as an employer offering steady and well-paid jobs, said Ntiabang, based in Cameroon. “When I was about 10, I was always dreaming I could work for BAT. They have always painted themselves as a responsible company – a dream company to work for. All the staff are well-off. The young people think ‘I want to work for BAT’. They promote a lot of events and make their name appear to young people. We grow up dreaming we can be one of them.”

In Uganda in 2014, BAT managing director, Jonathan D’Souza, sent a 13-page detailed attack on the tobacco control bill, then going through parliament, to the chair of the government’s health committee.

BAT was contracting with 18,000 farmers and paid them 61bn Ugandan shillings for 16.8m kg of tobacco in 2013, said the letter. The economy has “benefited significantly” from BAT Uganda’s investments, it said. “This has helped to alleviate poverty and improve welfare in urban and rural areas,” it says.

Extract – letter

“The draft regulations which you have published deal with a wide range of issues which will have a massive impact not only on the tobacco industry but also on a wider scale on the Namibian economy at large.”

Excerpt from a letter from the general manager of BAT in Namibia to the minister of health and social services, 17 November 2011

BAT Uganda (BATU) agreed tobacco should be regulated while “respecting the informed choices and rights of adults who choose to smoke and the legal rights of a legal industry”. But it cited 11 “areas of concern”, claiming there is no evidence to support a ban on tobacco displays in shops, that large graphic health warnings on packs are ineffective, that proposals on bans on smoking in public places were too broad and that prohibiting smoking under the age of 21 was unreasonable, since at 18 young people are adults and can make up their own mind.

Documents made public by the University of Bath show that BATU had another concern: the ban on the sale of cheap single cigarettes. Adults should be “free to purchase what they can afford”, says an internal leaked paper. BATU also took action against the MP who sponsored the bill. A letter informed him that the company would no longer be contracting with the 709 tobacco farmers in his region. There is evidence that the company also lobbied other MPs with tobacco farmers in their constituencies.

The Tobacco Control Act became law in 2015, and in November last year, BAT sued. Many people choose to smoke, said an affidavit to the court from managing director Dadson Mwaura and it was important to ensure regulation did not lead to “unintended consequences that risk an untaxed and unrestrained illegitimate trade in tobacco products”. BATU’s legal product contributed to the Ugandan economy “in many dimensions”.

The Guardian has seen letters showing that at least six other African governments have faced challenges from the multinational tobacco companies over their attempts to control smoking.

Democratic Republic of Congo: Letter to the president sent in April 2017 by the Fédération des Entreprises du Congo (chamber of commerce) on behalf of the tobacco industry, listing 29 concerns with the proposed tobacco control regulations, which they claim violate the constitution, international agreements and domestic law.

Burkina Faso: Letter sent in January 2016 to the minister of health from Imperial Tobacco, warning that restrictions on labeling and packaging cigarettes risks economic and social damage to the country. Previous letter sent to the prime minister from the US Chambers of Commerce in December 2013 warning that large health warnings and plain packaging could put Burkina Faso in breach of its obligations to the World Trade Organisation.

Ethiopia: Letter sent in February 2015 to the ministers of health and science and technology by Philip Morris International, claiming that the government’s tobacco directive banning trademarks, brands and added ingredients to tobacco breached existing laws and would penalise all consumer retailers.

Togo: Letter to the minister of commerce in June 2012 from Philip Morris International opposing plain packaging, which “risks having damaging consequences on Togo’s economy and business environment”.

Gabon: Letter from BAT arguing that there is no evidence that plain packaging reduces smoking, citing the Deloitte report of 2011, alleging its introduction would put Gabon in breach of trade agreements and promote smuggling.

Namibia: Letter to the minister of health from BAT, warning that planned tobacco controls will have “a massive impact … on the Namibian economy at large”.

Extract – memo

“As a country whose economy heavily relies on exports, Togo can ill afford to anger its international partners by introducing plain packaging.”

Excerpt from memo on plain packaging from chief executive of Philip Morris West Africa to the minister of commerce of Togo, to reiterate its concerns following a meeting, 21 June 2013

Bintou Camara, director of Africa programs at Campaign for Tobacco-Free Kids, said: “British American Tobacco, Philip Morris International and other multinational tobacco companies have set their sights on Africa as a ‘growth market’ for their deadly products”. Throughout Africa, tobacco companies have tried to intimidate countries from taking effective action to reduce tobacco use, the world’s leading cause of preventable death, he added.

“Governments in Africa should know that they can and should move forward with measures aimed at preventing and reducing tobacco use – and that they do so with the support of the many governments and leaders around the world that have taken strong action to protect public health.”

Cloe Franko, senior international organizer at Corporate Accountability International, said: “In Kenya, as in other parts of the world, the industry has resorted to frivolous litigation, aggressive interference … to thwart, block, and delay lifesaving policies. BAT’s actions are emblematic of a desperate industry grasping to maintain its hold over countries and continue to peddle its deadly product.”

Philip Morris said it is regularly engaged in discussions with governments. “We are approached by or approach public authorities to discuss a range of issues that are important for them and for us, such as taxation, international trade, and tobacco control policies. Participating in discussions and sharing points of view is a basic principle of public policy making and does not stop governments from taking decisions and enacting the laws they deem best.” It said that it supports effective regulation, “including laws banning sales to minors, mandatory health warnings, and advertising restrictions”.

Imperial Tobacco said it sold its brands “where there’s a legitimate and existing demand for tobacco and take the same responsible approach in Africa as we do in any Western territory”. A spokesman said it supported “reasonable, proportionate and evidence-based regulation of tobacco”, including “health warnings that are consistent with global public health messages”. But, it said, Imperial would “continue to make our views known on excessive, unnecessary and often counter-productive regulatory proposals”.

Tobacco plain packaging catching on worldwide: Canadian Cancer Society report

The trend to reduce smoking and cancer rates by forcing tobacco companies to use plain packaging is gaining momentum across the globe, concludes an international report released today by the Canadian Cancer Society. The report shows that 4 countries have plain packaging laws in place and 14 others are working on it.

Plain packaging requirements prevent tobacco companies from using colours, logos and design elements to market their cancer-causing products. The shape of the package must be in a standardized format, outlawing sales tactics such as slim packs appealing to girls and young women. Health warnings still appear on plain packages.

“Plain packaging is a global trend and it is coming to Canada, too,” says Rob Cunningham, senior policy analyst, Canadian Cancer Society. “We must continue to show leadership in the fight against the marketing of tobacco.”

In 2001 Canada was the first country in the world to implement graphic picture warnings on cigarette packages. Since then, more than 100 countries and territories (105 in total) have followed Canada’s lead – accounting for 58% of the world’s population – as illustrated in this graph. Canada’s leadership in graphic picture warnings has resulted in enormous health benefits globally.

Smoking is the leading cause of preventable disease and death in Canada, including about 30% of all cancer deaths and 85% of lung cancer cases. Tobacco kills 37,000 Canadians every year.

Tobacco packaging is one of the last and most effective ways for companies to promote their products, with eye-catching logos and colours designed to appeal to consumers. Plain packaging reduces tobacco use by eliminating promotion on packaging, reducing product appeal, curbing package deception, and increasing the impact of health warnings. Research shows that plain packaging works.

“Plain packaging is a crucial next step for Canada to reduce smoking and save lives,” says Cunningham. “We strongly support the federal government’s commitment to follow the lead of Australia and other countries to implement plain packaging to curtail the marketing of these cancer-causing products.”

Plain packaging is required in Australia, the United Kingdom and France, and will be by 2018 in Hungary. The 14 countries working on plain packaging are Canada, New Zealand, Ireland, Norway, Slovenia, Uruguay, Thailand, Singapore, Belgium, Romania, Turkey, Finland, Chile and South Africa.

Canada’s federal government included a commitment to plain packaging as part of its 2015 election platform. After forming a government, Prime Minister Justin Trudeau identified it as a “top priority” in a mandate letter to Health Minister Jane Philpott. On May 31, 2016 – World No Tobacco Day – Minister Philpott launched a 3-month public consultation on plain packaging. The federal government is now reviewing the responses and developing regulations.

The Canadian Cancer Society report released today – Cigarette Package Health Warnings: International Status Report – ranks 205 countries and territories based on the size of their health warnings on cigarette packages and lists countries that have finalized requirements for picture warnings. Canada ties for 8th in the world with package warnings that cover 75% of the package’s front and back. Nepal and Vanuatu are tied for top spot with a warning size of 90%, while India and Thailand are 3rd at 85%. The United States is in last place with minimal requirements for health warnings on either the front or back of the package.

The Canadian Cancer Society is calling for plain packaging to be implemented in Canada as part of a strengthened Federal Tobacco Control Strategy, which should also include increased funding to support additional programming and policy measures. Health Canada’s current strategy expires on March 31, 2018. The existing Tobacco Act is 2 decades old and must be modernized.

The Society’s report, published every 2 years, reviews and ranks cigarette health warnings internationally and tracks developments in this important area of tobacco control.

Other report highlights include:

94 countries and territories require warnings to cover at least 50% of the package front and back (on average), up from 60 countries in 2014 and 24 in 2008. — The top countries ranked in terms of warning size (as an average of the front and back of the package) are: 1. 90% Nepal 1. 90% Vanuatu (effective in 2017)

3. 85% Thailand 3. 85% India 5. 82.5% Australia (75% of front, 90% of back) 6. 80% Sri Lanka 6. 80% Uruguay 8. 75% Brunei 8. 75% Canada 8. 75% Laos 8. 75% Myanmar
The Canadian Cancer Society’s report was released today in Delhi, India, at the 7th session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control being held Nov. 7-12. The report was released to support implementation of the WHO Framework Convention on Tobacco Control, ratified by 180 countries. The goal of this international treaty is to control the global tobacco epidemic. Its guidelines recommend that parties consider implementing plain packaging.

Cigarette Package Health Warnings report in English Cigarette Package Health Warnings report in French

About the Canadian Cancer SocietyThe Society is a national, community-based organization of volunteers whose mission is to eradicate cancer and enhance the quality of life of people living with cancer. Thanks to our donors and volunteers, the Society has the most impact, against the most cancers, in the most communities in Canada. For more information, visit or call our toll-free bilingual Cancer Information Service at 1-888-939-3333 (TTY 1-866-786-3934).

SOURCE Canadian Cancer Society (National Office)

European fund firms largely resist tobacco divestment campaign

Eighteen months after the launch of a global campaign to persuade money managers to black-list tobacco stocks, just one major European investor has answered the rallying cry.

Others are largely sticking with an industry that remains lucrative despite tightening restrictions on smoking and a series of lawsuits in the United States, saying they are duty-bound to seek the best returns for their clients.

Even a United Nations-backed treaty which aims to cut tobacco consumption by almost a third within 10 years is failing to deter many investors in the likes of Philip Morris International (PM.N), British American Tobacco (BATS.L), Japan Tobacco (2914.T) and Imperial Brands (IMB.L).

“We are firmly of the view that profits, cash and dividends from tobacco stocks have many years of strong growth ahead,” said Stephen Lamacraft, fund manager at Woodford Investment Management.

Still, the Global Taskforce for Tobacco Free Portfolios, backed by the Union for International Cancer Control, has scored one big victory since it began campaigning in March 2015 for financial institutions and pension funds to divest an estimated $60 billion from the industry.

In May this year, French insurer and fund manager Axa agreed to ditch its tobacco holdings, becoming the first major European investor to sign up to the campaign, although others had already opted out of tobacco before it was launched.

Axa said its role as a health insurer meant it could no longer justify investing in something that had such a “tragic” impact on public health. At the time it held 200 million euros in tobacco stocks and about 1.6 billion euros ($1.8 billion) in bonds issued by the cigarette makers.

Even then, the process is lengthy. Axa has almost completed selling the shares but will keep the bonds until they mature. Only in 2027 will the bulk – 97 percent – be off its books.

Many other investors appear reluctant to discuss the issue. Reuters contacted 24 large fund managers which hold tobacco stocks, and all but seven declined comment or did not respond.


According to the World Health Organization (WHO), tobacco kills around 6 million people each year, including 600,000 non-smokers exposed to second-hand smoke.

Many of the passive victims are children.

The Taskforce’s global Project Manager, Melbourne-based Bronwyn King, has persuaded more than 30 Australian superannuation funds to ditch tobacco but the campaign faces a tougher challenge in Europe.

The same goes for the United States, where one influential investor, the California Public Employees’ Retirement System is reviewing a 16-year investment ban on tobacco after a study estimated the policy had cost it $2 billion to $3 billion in returns.

Campaigners reject the fiduciary duty argument – that funds must seek the best returns for their clients. They note that about 180 countries have signed up to the WHO’s Framework Convention on Tobacco Control, which aims to cut consumption by 30 percent by 2025 through new regulations and tax increases that will make tobacco less affordable.

Currently just a handful of countries fully comply with the treaty, implying a significant future hit to the value of tobacco stocks when others follow suit.

“Over the longer term, (the treaty) has to decrease the validity of the product – you will have fewer people wanting or being able to buy tobacco and that has to impact the investment appeal of the producers,” said Rachel Melsom, UK director of campaign group Tobacco Free Portfolios.

Philip Morris International, Imperial Brands and BAT declined to comment. Japan Tobacco did not immediately respond to a request for comment.


The tobacco industry sells about 5.6 trillion cigarettes a year to the world’s 1 billion smokers, many of whom live in low and middle-income countries. Here consumption is expected to keep rising due to growing populations and income.

More people are quitting smoking or cutting down in developed countries, but overall revenue and profit margins are consistently buoyed by companies’ ability to raise prices.

International players have also largely shielded themselves from direct exposure to the U.S. market, which has a history of litigation against big tobacco companies. For instance, Philip Morris has been separated from Altria (MO.N), which sells its Marlboro cigarettes in the United States.

In the 10 years to 2015 – a period that included the crisis of 2008-09 – the MSCI World Tobacco Index rose 10.4 percent compared with just 2.64 percent on the MSCI World Index.

All this appeals to many fund managers. For instance, the 9.2 billion pound ($12.3 billion) CF Woodford Equity Income Fund managed by veteran fund manager Neil Woodford holds BAT and Imperial Brands – makers of the Lucky Strike and Gauloises brands respectively – among its top 10 positions.

“(Tobacco’s) dependable dividends are increasingly highly-prized and still represent attractive yields,” said Lamacraft.

The dividend argument doesn’t always hold water. London-listed British American and Imperial reported dividend yields of 3.2 percent and 3.78 percent respectively, compared with an average 4.06 percent across the FTSE 100 index. New-York listed Philip Morris International has a 4.01 percent dividend yield.

Louise Dudley, portfolio manager at Hermes Investment, said she has barred tobacco stocks because she believes returns are unsustainable in the long-term.

“The industry has faced and continues to face increased regulation and consumers are becoming more aware of the health impacts of tobacco. The general trend is towards more healthy lifestyles. Tobacco products don’t tend to fit within that.”


A spokeswoman for Standard Life Investments (SLI) said its decision not to black-list tobacco reflected the needs and views of its clients. But Melsom said ordinary savers didn’t always know where their money was being invested.

“If every individual who has a pension fund could see their level of investment in tobacco and the costs associated with that, I think that would make a difference,” she said.
Client attitudes towards tobacco varied widely, according to Iain Richards, Head of Responsible Investment, EMEA, at Columbia Threadneedle Investments. “We are satisfied that, for our mainstream funds, our approach is measured, works well and serves our clients’ best interests. We therefore don’t intend to adopt a blanket divestment policy on tobacco,” he said.

Amra Balic, Head of BlackRock’s EMEA Investment Stewardship team (BLK.N), said her firm did not make social, ethical or environmental values judgments on behalf of clients, and company engagement was critical in addressing the health and social risks of tobacco.

“I don’t think that we will end up, by divestment, in a world where tobacco won’t exist, therefore engagement by responsible investors is key to holding companies to account on ESG (environmental, social and governance) issues”.

A spokeswoman for M&G, another investor in the sector, said it regularly discussed environmental, social and ethical risks with tobacco company management, and encouraged improvements where it considered performance to be poor.

SLI, BlackRock, M&G, Columbia Threadneedle, Handelsbanken and Aberdeen Asset Management all said clients could bypass tobacco with their socially responsible investment (SRI) funds. Handelsbanken said about 40 percent of the assets that it manages are in funds that exclude tobacco investments.

The performance of SRI funds, which often also avoid industries such as armaments and alcohol, is typically benchmarked against indexes that exclude tobacco firms.

But mainstream funds are benchmarked against indexes that usually include them. Any that chooses to drop tobacco stocks is likely to underperform its benchmark index, putting pressure on managers to stick with the status quo.

“You need to benchmark against other funds that don’t include tobacco and see how you how perform in other investments you have put in its place,” Melsom said.

The following firms declined to comment or didn’t respond to a Reuters request for comment:

JPMorgan Asset Management, Nordea Asset Management, Invesco Perpetual, Morgan Stanley Investment Management, Vanguard, Franklin Mutual, Capital Group, RBC, Legal & General Investment Management, Credit Suisse Private Banking, SEB Investment Management, Andra AP Fonden, Forsta AP Fonden, Oppenheimer Funds, Gabelli Funds, Capital Research and Reinet Investments.

($1 = 0.7482 pounds)
($1 = 0.8965 euros)
(additional reporting by Martinne Geller; editing by David Stamp)

Some racial, ethnic groups continue smoking cigarettes at higher rates

Substantial disparities found among American Indians/Alaska Natives, Korean and Puerto Rican Americans

Despite a significant decline in overall adult cigarette smoking since 1964, disparities in cigarette smoking remain among racial and ethnic population groups, according to a new study from the Centers for Disease Control and Prevention (CDC) published in today’s Morbidity and Mortality Weekly Report (MMWR).

For example, current (past 30-day) cigarette smoking during 2010-2013 was lower among Asians overall (10.9 percent) compared with Whites (24.9 percent). But among Asian sub-groups, the prevalence of current cigarette smoking ranged from 7.6 percent among Chinese and Asian Indians to 20.0 percent among Korean Americans. The American Indian/Alaska Native population had the highest prevalence of cigarette smoking at 38.9 percent. The findings in this study show the importance of identifying higher rates of tobacco use across and within racial/ethnic population groups to better understand and address differences in tobacco use among U.S. adults.

Larger sample size for racial/ethnic subgroups

Estimates of cigarette smoking prevalence are usually presented in aggregate for racial or ethnic populations, such as Asian or Hispanic, because sample sizes are too small to provide estimates among racial/ethnic subgroups within these populations. To get a large enough sample size for this study, researchers aggregated data from the National Survey on Drug Use and Health collected between 2002-2005 and 2010-2013 to assess cigarette-smoking prevalence among 6 racial and ethnic population groups and 10 select subgroups in the United States.

“Even though the overall cigarette-smoking rate is declining, disparities remain among racial and ethnic groups and within subgroups,” said Bridgette Garrett, Ph.D., associate director for health equity in the CDC’s Office on Smoking and Health. “Looking beyond broad racial and ethnic population categories can help better focus the strategies that we know work to reduce tobacco use among sub-groups with higher rates of use.”

Hong Kong women and men enjoy world’s longest life expectancy due to low smoking rates, health experts claim

Second place held by Japanese women and Icelandic and Swiss men

Hong Kong’s women and men enjoy the longest life expectancy in the world, according to data released by Japan’s health and welfare ministry on Wednesday.

The average lifespan for women in Hong Kong is 87.32 years, and local men on average can expect to live to 81.24.

Japanese women took second place at 87.05, while Icelandic and Swiss men shared the second position in the men’s category at 81 years.

The overall life expectancy gap between women and men fell by 0.07 year last year, compared with the previous year’s figures.

Since 1985, Japanese womenhad the world’s longest average life expectancy. But this changed in 2011 when Hong Kong women overtook them after the catastrophic earthquake and tsunami in north-eastern Japan [2] in March that same year.

Japanese women then regained the top spot in 2012 and managed to retain it for three consecutive years until last year.

A Japanese health ministry spokesman said longer lifespans resulted from improved medical treatment and technology in beating diseases like cancer.

Meanwhile, local health experts expressed little surprise over the findings for Hong Kong.

University of Hong Kong public health professor Lam Tai-Hing said the city’s low smoking rates were the main reason for its life expectancy results. “Smoking in Hong Kong compared with 30 years ago has been reduced by half,” he said, adding that recent data showed 19 per cent of local men smoked and only 3 per cent of local women smoked.

Lam noted that, when compared with Japan’s number of smokers – 30 per cent of men and 10 per cent of women – Hong Kong would continue to eclipse Japan in life expectancy rates in future. Michael Ni Yuxuan, a clinical assistant professor of public health at HKU, agreed with Lam. “Hong Kong has extremely low tobacco rates compared with the UK, US and Japan,” he said.

Ni highlighted low infant and maternal mortality rates as another major factor. Department of Health figures showed infant mortality rates in the city dropped from 9.7 per 1,000 live births in 1981 to 1.3 per 1,000 last year.

But Lam cautioned that differences between Hong Kong and Japan had to be taken into consideration. “Hong Kong is a city. Japan is a whole country,” he said, explaining that Japanese living in rural areas may have worse nutrition than Hongkongers as well as less accessibility to health care and education – factors in life expectancy. “In general, people in the city have longer lives, and people in Hong Kong have good access to education, clean water and electricity,” he added.

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Tobacco Consumption in China Falls

In a victory for Government health policies, tobacco consumption in China has fallen for the first time in over 20 years.

The Financial Times reports that there’s been a fall of 2.4%, although the Chinese market remains enormous, accounting for 45 percent of all cigarette sales in the World.

China’s Government has recently been proactive in enforcing smoking bans in municipal spaces, and has increased tobacco duty from 5% to 11%.

Meanwhile, City A.M. has contrasted the decline of tobacco sales in China with a growing market in Europe.

The paper also reported that the worldwide growth of vaping products has slowed.


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Cigarette market sees 2.4 per cent volume decline

Cigarette sales fell in the world’s largest tobacco market in 2015 for the first time in two decades, according to research by Euromonitor International.

The country’s cigarette market lost some 60 billion sticks last year, Shane MacGuill, head of tobacco research at Euromonitor, said. He attributed the decline to wholesale tax hikes, increased government control on production and greater health awareness in some regions.

“We do not see 2015 as a one off with the Chinese market now projected to lose about 5% of its volumes between 2015 and 2020,” MacGuill said.

E-cigarettes – where are we now? Update

E-cigarettes have become ever more popular since they first appeared on the market in 2007, and regulators have struggled to keep up. There has been much debate about the advantages and risks of using them. Community pharmacy is playing a significant role in the way the debate plays out, because many sell e-cigarettes, yet others regard such sales as unethical.

Increasingly, e-cigarettes are being seen as a positive tool in the ongoing battle to reduce smoking and last year research published by NHS England concluded that e-cigarettes were 95% safer than conventional cigarettes. The Royal College of Physicians published its own report at the end of April 2016 entitled “Nicotine without Smoke – Tobacco Harm Reduction”. The report explains that due to the negative impact on health of smoking tobacco, combined with other undesirable effects such as a reduction in economic productivity, smoking is responsible “for more loss of quality and quantity of life in the UK than any other avoidable cause” and concludes that the use of non-tobacco nicotine products, particularly e-cigarettes, has “huge potential to prevent death and disability from tobacco use.”

The number of people who smoke tobacco has already reduced considerably over recent decades. In 1972 51% of men and 41% of women smoked. By 2014, those figures had reduced to 21% of men and 16% of women. However, even these reduced percentages mean that there are still 8.7 million current smokers in the UK. According to the Royal College, the resulting direct cost to the NHS from smoking related illness is currently exceeds £2 billion each year. Taking into account other associated costs, such as social care and a decrease in economic productivity, the overall annual cost to the tax-payer is estimated to be approximately £14 billion. The Royal College has been involved in reviewing the effect of smoking for many years although, at first there was little enthusiasm at Government level for any real control over tobacco. The College published a report in 1962 identifying tobacco smoking as the main cause in the significant increase of cases of lung cancer, but, it was not until 1998 that a comprehensive tobacco control policy in the UK was published.

Because approaches to reducing the number of smokers have not been wholly successful, together with the fact that nicotine, in itself, is not a highly dangerous drug (although the smoke which is inhaled when smoking tobacco is), has led the Royal College to conclude that the use of e-cigarettes is, on balance, beneficial. This approach is consistent with Public Health England’s research that “While vaping may not be 100% safe, most of the chemicals causing smoking-related disease are absent and the chemicals present pose limited danger.

The views of Public Health England and the Royal College of Physicians will not mean that sales of e-cigarettes will be unregulated. Ministers in Wales attempted, unsuccessfully, to ban e-cigarettes from public spaces this year, and in the UK, the MHRA recently licensed e-Voke as the first e-cigarette to have a licence as a medicinal product, opening up the possibility of vaping on prescription. However, given the costs of obtaining the necessary licence – which the Royal College of Physicians puts at between £252,000 and £390,000 plus annual costs of up to £249,000, this is unlikely to be a particularly popular option, despite the credibility having a licence gives the product.

For those e-cigarettes that do not have a licence, the EU Tobacco Directive will came into force on 20 May. This regulates the content of e-cigarettes and imposes labelling and leaflet requirements. E-cigarettes must not contain more than 20 mg nicotine per ml; there are restrictions on additives; child resistant packaging is mandatory; and information leaflets must include possible adverse effects, addictiveness and toxicity. E-cigarettes must also continue to comply with advertising codes enforced by the Advertising Standards Authority.

Tobacco companies tried to prevent the Tobacco Directive coming into force. In May, the European Court of Justice rejected this challenge, holding that human health requires a high level of protection that descriptions such as ‘low-tar’, ‘light’, ‘ultra-light’, ‘natural’, ‘organic’, ‘without additives’, ‘without flavours’ or ‘slim’, could mislead consumers, by suggesting that the products concerned are less harmful or that they have beneficial effects. An argument by the tobacco companies that their descriptions were helpful to consumers was dismissed by the court, which said the descriptions were “intended more to exploit the vulnerability of consumers of tobacco products who, because of their nicotine dependence, are particularly receptive to any element suggesting there may be some kind of benefit linked to tobacco consumption, in order to vindicate or reduce the risks associated with their habits.”

Despite any residual disquiet about the long term effects of e-cigarettes, it looks as though they are here to stay, and this is reflected in the increasing number of pharmacies which are now selling them.

Charles Russell Speechlys LLP – Rachel Warren