Exploiting Emerging Markets
Big Tobacco cannot reduce the sale of cigarettes: with smoking rates peaking or declining in the mature markets of the west, the transnational cigarette companies have tried to expand their international operation also in Latin America, Asia and Africa.
An ex-tobacco employee interviewed by Marketing Week, says: “They have to find a way to feed the monsters they've built. Just about the only way will be to increase sales to the developing world”. - R. Morelli, 1998
For a decade, operating under the authority of Section 301 of the 1974 Trade Act, the U.S. Trade Representative (USTR) threatened to impose severe trade sanctions against countries which do not open their markets to American cigarettes.
“Emerging markets” in the words of Big Tobacco
“We should not be depressed simply because the total free world markets appears to be declining. Within the total market, there are areas of strong growth, particularly in Asia and Africa; there are new markets opening up for our exports, such as Indo-China and the Comecom countries; and there are great opportunities to increase our market share in areas like Europe. This industry is consistently profitable. And there are opportunities to increase that profitability still further”. - BAT, 1990
Steven Goldstone, RJR Nabisco Chairman: “The international tobacco business has become an increasingly important source of earnings for RJR Nabisco and can be the most significant driver of our future tobacco earnings growth”. - Tobacco Reporter, 1998
“You know what we want”, says a tobacco executive “we want Asia”. - Unhealthy Alliance, 1998
Rothmans representative in Burkina Faso, Chris Burrell: “The average life expectancy here is about forty years, infant mortality is high: the health problems which some say are caused by cigarettes just won't figure as a problem here”. - J. Sweeney, 1998
Matthew Winokur, Director of Philip Morris-Asia, talking about overseas markets: “If people are going to smoke, why shouldn't they be able to choose American cigarettes”. - L. Heise, 1988
Michael Parsons from Philip Morris: “The demand for Marlboro is phenomenal. Its like saying: “What is the potential market for Levis jeans? Probably every second adult in Russia”. - The Observer, 1992
Andreas Gembler, President of Philip Morris Europe: “When the wall came down in 1989, there were tens of millions of consumers opening up to Philip Morris. If we hadn't reacted the way we did, by now the train would have gone. We would have seen its end lights”. - Institutional Investor, 1996
Thomas Marsh, RJ Reynold's Regional President, says of Eastern Europe: “Its trench warfare. Hand to hand combat. We talk with each other on certain issues of mutual interest, such as smoking and health issues, advertising restrictions, things like that. We have industry associations where we sit down and act like perfect gentlemen - and then we leave the meeting and go out and battle in the streets again”. - The Observer, 1992
Sir Patrick Sheehy says that BAT is “Striving for greater global reach. These are the most exciting times that I have seen in the tobacco industry in the last forty years”. - Tobacco Reporter, 1991
Rene Scull, Vice President, Philip Morris Asia: “No discussion of the tobacco industry in the year 2000 would be complete without addressing what may be the most important feature on the landscape, the China market. In every respect, China confounds the imagination”.
Robert Fletcher, Rothmans Regional Public Affairs Manager: “Thinking about Chinese smoking statistics is like trying to think about the limits of space”. - Window magazine, 1992
Big Tobacco and communist countries: “Until recently, perhaps forty per cent of the world's smokers were locked behind ideological walls. Wève been itching to get at them… That's where our growth will come from”. - The Observer, 1992
Rothmans Public Affairs Manager, Rothmans Exports: “It would be stupid to ignore a growing market. I can't answer the moral dilemma. We are in the business of pleasing our shareholders. We have a very strong feeling that if no one had heard of cigarettes in Timbuktu, then a Rothmans billboard would not mean anything. All we are doing is responding to a demand”. - J. Sweeney, 1988