Reasonable co-operation can achieve a win/win scenario
Tobacco has been smoked for at least three thousand years and for much of that time it has divided opinion, sparked controversy and provoked strong views.
Frederick William Fairholt described the progress of the tobacco trade in 1859 as “curious” in his book ‘Tobacco, its History and Associations’, adding:
That a plant originally smoked by a few savages, should succeed, in spite of the most stringent opposition in church and state, to be the cherished luxury of the whole civilised world… causing so vast a trade and so large an outlay of money; is a statistical fact, without an equal parallel.
150 years later the tobacco industry supports millions of jobs and hundreds of thousands of farmers choose to grow this resilient and reliable crop. Governments globally earn more revenue from tobacco products than the shareholders of the companies that make them. For example, in 2012, our subsidiaries enabled governments worldwide to gather more than £30 billion in taxes, including excise duty on our products, more than seven times the Group’s profit after tax.
Views on tobacco have, if anything, become more polarised than ever in the 21st century and today the issue dominating the agenda is the risk to health. Yet tobacco products are legal and calls for a ban are very rare. Even with universal awareness of the health risks, around one billion adults worldwide make the choice to smoke.
Future tobacco consumption
Few would dispute that for the foreseeable future many hundreds of millions of adults will continue to be tobacco consumers. A growing world population and rising incomes might suggest an increase, but we see this being offset as many smokers choose to consume less per day or to quit.
It seems reasonable to predict a future where there are potentially lower risk products – provided there is regulatory consensus – and responsibly managed channels of marketing to adult smokers based on one-to-one ‘permission marketing’, with less reliance on channels such as mass media. Debate on ‘second-hand smoke’ is likely to continue, but we hope it will be around policies that provide real choice for both non-smokers and smokers.
A key question for governments and regulators today – as perhaps it always has been – is, after all reasonable regulation, marketing constraints and product modifications, with prohibition not an option and millions of adults continuing to use tobacco, who would you prefer to manage the tobacco industry? We doubt that governments would welcome markets controlled by counterfeiters, organised criminals running ‘illegal’ cigarettes and back-door salesmen supplying them to children.
We believe that governments can achieve a ‘win / win’: a scenario of gradually declining total consumption for health ministries; sustained value for well-run tobacco companies; higher tax collection for finance ministries; higher quality, potentially safer products for consumers and less tobacco smuggling and counterfeiting with improved law and order.
The key to such a future is reasonable co-operation between governments and well-run, responsible tobacco companies.