To ‘enable our legal product to compete effectively with the transit market’: British American Tobacco's strategies in Thailand following the 1990 GATT dispute

Abstract

The opening of the Thai tobacco market, following action brought by the US Trade Representative under the GATT, is seen as a key case study of the tensions between trade and health policy. Interpretations of the dispute cast it, either as an example of how trade agreements undermine national policy making, or how governments can adopt effective public health protections compliant with international trade rules. As a UK-based company, British American Tobacco has been regarded as peripheral to this dispute. This paper argues that its close monitoring of the illegal trade during this period, the role of smuggling in the company’s global business strategy, and its management of the relative supply and pricing of legal and illegal products after market opening provide a fuller understanding of the interests and roles of transnational tobacco companies and the government in this dispute. The findings have important policy implications, notably the role of effective governance in countries facing pressure to open their tobacco sectors, need to better understand corporate-level activities within an increasingly globalized tobacco industry, and need to address the intertwined legal and illegal trade in implementing the WHO Framework Convention on Tobacco Control Protocol to Eliminate Illicit Trade in Tobacco Products.

‘A preferred consultant and partner to the Royal Government, NGOs, and the community’: British American Tobacco’s access to policy-makers in Cambodia

“…Finally, the analysis highlighted the strategically important role of Cambodia in illicit trade and the company’s own involvement in contraband activity. This contributed to the growing literature on tobacco industry complicity in cigarette smuggling in the region (Collin, LeGresley, MacKenzie, Lawrence & Lee, 2004; Lee et al, 2008; Lee & Collin, 2006; Lee, Gilmore, & Collin, 2004; MacKenzie, Lee &LeGresley, 2015) that has demonstrated that smuggling was not only profitable for BAT, but that it allowed the company to establish a presence in closed markets; assert policy influence, and to circumvent and undermine tobacco control measures.…”

‘Preparing ourselves to become an international organization’: Thailand Tobacco Monopoly’s regional and global strategies

“…Published scholarly literature in public health, business studies and regional studies were searched for material on the Thai tobacco industry using Google Scholar, PubMed and JSTOR. There are a number of detailed studies of TTC activities in Thailand (Chantornvong & McCargo, 2001 ; Charoenca et al, 2012 ; MacKenzie & Collin, 2008a ; MacKenzie et al, 2016 ; MacKenzie & Collin, 2008b ; MacKenzie & Collin, 2012 ; MacKenzie, Collin, & Sriwongcharoen, 2007 ; MacKenzie, Collin, Sriwongcharoen, & Muggli, 2004 ), but little scholarly analysis of the operations and business strategies of the TTM or the Thai industry as a whole.…”

“…Market dominance came under threat during the 1980s from two external sources. The first was a substantial growth in the illicit tobacco trade, accounting for roughly 3–7% of the market, which flooded the country with foreign brands such as Marlboro (MacKenzie, Lee, & LeGresley, 2016 ). The second was the demands made by the United States Trade Representative (USTR) on Japan, Korea, Taiwan and Thailand in the 1980s to drop restrictions on imported cigarettes or face U.S. trade sanctions (Chaloupka & Laixuthai, 1996 ).…”

“…There is also evidence that leading foreign brands were available via extensive smuggling networks in which TTCs were complicit in the 1980s and 1990s (Collin, LeGresley, MacKenzie, Lawrence, & Lee, 2004 ; MacKenzie et al, 2016 ) Smuggling continued after the lifting of import restrictions in 1990, and subsequent analysis has demonstrated evidence that TTCs strategically coordinated the legal and illegal trade as a means of challenging stronger government regulation and tobacco control measures (Collin et al, 2004 ; MacKenzie et al, 2016 ). Estimates of what is, by definition, a criminal activity inevitably vary; Euromonitor International ( 2015c ) suggests that the illicit trade accounts for 2.5–3% of total sales, while an analysis of discrepancies between imports, exports and legal sales between 1992 and 2005 puts the figure for smuggled cigarettes at an average of 9.9% of total sales annually (Pavananunt, 2011 ).…”

Tobacco industry globalization and global health governance: towards an interdisciplinary research agenda

“…In many cases, this was achieved through the above described policy influence encouraging countries to liberalize tobacco trade and investment, privatize state-owned enterprises, and pursue joint ventures. This literature describes TTCs expanding through takeovers in Latin America from the 1960s (Stebbins, 1994), leaf growing in Africa from the 1970s (Curry and Ray, 1984; Otanez et al ., 2009), and pressuring Asian markets to open from the 1980s (Connolly, 1992; Lee et al ., 2013; MacKenzie et al ., 2015). For example, Gultekin-Karakas (2015) examines how “the liberalisation process facilitated by the state under the auspices of international institutions … paves the way for market expansion” of TTCs in Turkey.…”