Dirty Money and Shady Spending: How the Tobacco Industry Gets Its WayACTA
The tobacco industry isn’t shy about the mega-profits it rakes in year after year; major tobacco companies routinely and proudly boast their multi-billion-dollar-revenues to their stakeholders. But what they don’t like to advertise, at least not to the public, is how they got rich: by knowingly addicting people to their products and preying on their addiction.
The industry runs on dirty money. What makes it dirty? The profits coming in are made by exploiting those in its supply chain, and by selling products designed to addict their users. Equally as shameful, the funds going out may at times be used by companies to buy their way around regulations meant to protect people. The industry is struggling to stay relevant in a world that’s trying to move beyond tobacco, and they use dirty money to make this happen.
How does the industry spend its dirty money and why?
Some of the industry’s nefarious spending is done publicly, under the guise of altruism, and publicized so that the industry can later reap the business benefits. Other times, it’s hidden from the public eye, only detectible to those willing to do the digging.
No matter the target, the spending of this dirty money serves specific purposes: delay or block life-saving tobacco control policies, discredit public health research and distract the public and policymakers with so-called charitable spending. The money reaches far and wide, and you don’t have to be a tobacco user to be affected.
- Financing front groups: Tobacco companies have sullied reputations and they know it. That’s why they have to pay for allies who can help spread tobacco industry messaging under the pretense of independence. If policymakers sense that a pro-industry message is supported by seemingly independent groups, they may be more likely to acquiesce to it. That gets the industry one step closer to policies that favor their profits, no matter the cost to public health. Sometimes the links are right at the surface. The world’s largest tobacco company, Philip Morris International (PMI), is openly the sole funder for the Foundation for a Smoke-Free World—a so-called independent nonprofit organization. More often, a tobacco company may be one of many funders, and the recipients of the funding may seem unrelated to tobacco, yet have been found to lobby for or promote tobacco industry interests.
- Paying for pseudoscience: With this well-documented tactic, industry dollars are routed to researchers and consultancy firms to produce reports that usually criticize existing public health research. Tobacco companies pay for studies that often end up promoting tobacco industry interests, and ultimately confuse and muddle the conversation around public health—posing a risk to the swift passage of proven and effective tobacco control legislation. Big Tobacco also uses dirty money to mount court injunctions against the publication of public health evidence, claiming the studies are misleading. A notable case was when British American Tobacco (BAT), the world’s second-largest tobacco company, paid for a particularly appalling study (learn more on page 19). In its fight against plain packaging, a measure proven to reduce tobacco use, BAT paid a professor in the United States to write a report concluding that smoking had increased after the implementation of plain packaging in Australia. BAT also used the report a year later to oppose plain packaging in South Africa.
- Facilitating smuggling: Though it may seem counterintuitive to support the trade of cigarettes on the black market, tobacco companies actually have a lot to gain from this illegal activity, and all four major tobacco companies—BAT, PMI, Japan Tobacco International (JTI) and Imperial Tobacco—have been found to be complicit. By facilitating illicit trade, tobacco companies can gain soft entry into new markets, avoid paying taxes due on legal cigarettes and reap the benefits of more people gaining access to their (subsequently cheaper) products. These cheaper black-market cigarettes are also able to reach more price-conscious consumer groups, including children.The industry also spends big money to interfere in governments’ selection of track and trace systems—the programs used to track tobacco products throughout the supply chain to ensure all taxes have been paid and to trace where products enter the illicit market. Recent examples include interference in South Africa and Pakistan (read more in English or Urdu).
- Buying favors from governments: 2020 saw a flood of so-called corporate social responsibility (CSR) activities in the tobacco industry. Tobacco companies saw governments struggling to pay for COVID-related emergencies and stepped in with their corporate bank accounts to offer help. The industry made donations in at least 30 countries since the pandemic struck, but it may not have been entirely out of goodwill. When the industry pays out for “charity,” it often makes requests in return. From rolling back advertising restrictions to arguing against tobacco bans, the industry has been known to lean on its past CSR contributions when asking for these favors.
It’s time to clean up.
When large corporations are held accountable for nefarious behavior, the public wins. Strong tobacco control policy is what can protect all people, tobacco users or not. We can’t let the industry continue to buy its way out of regulations at the expense of countless lives.
STOP calls on civil society organizations, governments, and public health and other researchers to call the industry out and demand accountability. We’ll all be safer for it.