The globalization of Asian tobacco companies should be of increasing international concern, according to a new study by researchers at the University of York and Simon Fraser University, Canada.
Analyzing the global business strategies of Asian tobacco companies in Japan, South Korea, China, Taiwan and Thailand, researchers found that these companies have started to export their brands to rapidly growing markets in Asia, Europe, the Middle East and Africa.
Published in Global Public Health, key methods in their shift from a domestic focus to aspiring transnational companies include:
- Government supported consolidation and restructuring of domestic operations including shutting down facilities deemed inefficient, merging smaller concerns into larger ones, and upgrading production capacity
- Increased manufacturing specifically for export to foreign markets
- New product development to create brands that have global appeal
- Product innovation including specially designed filters, use of flavourings, super slim cigarettes and electronic cigarettes
- Foreign direct investment in the form of joint ventures, overseas manufacturing and leaf growing operations
Researchers say their success in global expansion will mean a further increase to the already six million deaths caused by tobacco use each year.
Dr Jappe Eckhardt, Lecturer in Politics and International Relations in York’s Department of Politics and co-author of the study, said: “There are already one billion tobacco smokers worldwide, and this number is likely to rise further with Asian tobacco companies poised to enter the global market. It is very likely that this will lead to more smokers worldwide.
“Most attention of national and global tobacco control efforts is targeted at companies like British American Tobacco and Philip Morris, often referred to as Big Tobacco. However, our research shows this new group of Asian tobacco companies aims to gain market share across the globe through increased marketing, the development of new products and lowering prices.
“For example, the China National Tobacco Company (CNTC) is by far the world’s largest tobacco company but to date has been largely domestically focused. Consolidation has been followed by a strong commitment by the state-owned monopoly to “go global” over the next decade through exports, overseas manufacturing and leaf production.
“Rather than supporting the expansion of these companies, as sources of profit, Asian governments need to recognize that far greater economic, environmental and social costs are being caused by this deadly industry.
“Collective action by all countries, focused on the WHO Framework Convention on Tobacco Control, is needed more than ever.”