The alleged marketing strategies of British American Tobacco Plc in Africa have been cited in another British media outlet, this time for its activities in countries plagued by civil war.
The Guardian’s report, released Friday, is based on BAT documents provided by former employee Paul Hopkins. The newspaper said countries affected include Democratic Republic of the Congo (DRC), Somalia and South Sudan.
Among the accusations is that cartons of cigarettes were distributed to traders in Somalia after Al-Shabaab banned cigarette sales and threatened punishments under Sharia law between late 2008 and early 2009.
The documents also show BAT made plans to launch sales in South Sudan just two days before the country gained independence from the north after years of civil war left 4 million people displaced.
BAT is the world’s largest publicly traded tobacco manufacturer, having completed July 25 its $54.5 billion purchase of the 57.8 percent of Reynolds it did not already own.
Reynolds has become BAT’s largest global subsidiary, with legacy Reynolds shareholders owning 19 percent of BAT.
A 2015 BBC documentary disclosed claims of bribery committed by former BAT employees and individuals working on BAT’s behalf in Kenya, South Africa and Uganda. The bribes were alleged to have been made to politicians and policymakers to cover up environmental damage and corporate espionage linked to BAT.
BAT has denied those claims, but said in its 2015 annual report that “a number of allegations were made regarding historic misconduct in Africa.”
British regulators confirmed July 31 they are investigating allegations of bribery and corruption practices by BAT. The Serious Fraud Office said it is looking into “suspicions of corruption in the conduct of business by BAT, its subsidiaries and associated persons.”
BAT said it “has been informed that the Serious Fraud Office has now opened a formal investigation. BAT intends to cooperate with that investigation.”
On Friday, BAT said it has “complied fully with the regulations for tobacco products in the DRC — which have been in place in this country since 2007 — that prescribes health warnings and health warning sizes, and sets limits for tar and nicotine content.”
“Additionally, in other African countries, including South Sudan, Somalia and Somaliland, where there is no tobacco regulation in place, we voluntarily apply a side panel health warning on all of our products sold in those markets.”
BAT said it complies with tobacco tax law in all 200 global markets where it sells products.
“In each market where we are present, we offer consumers a choice of products, which can include local brands, international brands and our Global Drive brands,” BAT said.
It is expected that top-selling U.S. menthol cigarette Newport and top-selling U.S. electronic cigarette Vuse — both acquired from Reynolds — will be sold internationally.
The Guardian previously reported that BAT and other global groups have used threats against at least eight African nations, demanding they eliminate or dilute tobacco control measures that have saved millions of lives in the West.
Hopkins said fragile states were of interest to BAT, in spite of the practical difficulties and dangers involved in moving cartons of cigarettes and money about.
“If you have no government, you have nobody annoying you about health warnings and nicotine content,” Hopkins told the Guardian. “No customs. You basically pay your tax to the local militias on the airfield where you are landing.”
Somalia is a profitable market for BAT, Hopkins said, because people like the more expensive brands.
Anti-tobacco U.S. advocacy group the Campaign for Tobacco-Free Kids cited the Guardian report in again urging U.S. Justice and Securities and Exchange Commission regulators and Congress to conduct their own probes of BAT as it relates to the Foreign Corrupt Practices Act.
The group made similar requests during the regulatory review of BAT buying Reynolds, which served as BAT’s re-entry into the U.S. marketplace after 13 years.
“In addition to possible violations of the FCPA, The Guardian report raises questions about whether BAT’s conduct in moving U.S. dollars during the DRC conflict also violates federal anti-money laundering laws, especially as the U.S. has had sanctions in place against the DRC since 2006,” the campaign said.
“This is a company that has proven it cannot and will not play by the rules,” said Matthew Myers, the group’s president. “Unless and until they are held accountable by governments, shareholders, business partners and the public, the company’s wrongdoing will only continue.”
Stephen Pope, managing principal with industry research firm Spotlight Ideas of London, said Aug. 1 that “there is an element of truth in that the wheels of government and legislation in Africa turn more easily if ‘greased.’”
“However, it is certainly not a practice that should be applauded.”
