rss
Tob Control 13:ii88-ii95 doi:10.1136/tc.2004.009258
  • Research paper

Breaking and re-entering: British American Tobacco in China 1979–2000

  1. K Lee1,
  2. A B Gilmore2,
  3. J Collin1
  1. 1Centre on Global Change and Health, London School of Hygiene & Tropical Medicine, London, UK; kelley.leelshtm.ac.uk
  2. 2European Centre on Health of Societies in Transition, London School of Hygiene & Tropical Medicine
  1. Correspondence to:
 Dr Kelley Lee
 Centre on Global Change and Health, London School of Hygiene & Tropical Medicine, Keppel Street, London UK WC1E 7HT; kelley.leelshtm.ac.uk

    Abstract

    Objectives: To analyse the strategy used by British American Tobacco (BAT) to re-enter the Chinese market from 1979 to 2000 after historically dominating the market before the 1950s.

    Design: Analysis of tobacco industry document files to date available only on-site at the Guildford Depository operated by BAT. An additional search of recent documents related to BAT, placed in the Minnesota Depository, was also carried out.

    Results: BAT has been committed to regaining its historically dominant position in China since the country reopened to foreign companies in 1979. Initially, BAT remained cautious relative to competitors in seeking joint ventures, finding market access hindered by bureaucratic complexity, restrictions on foreign investment and imports quotas, and later an advertising ban. Instead, the documents suggest BAT strongly relied on illegal imports to expand market presence of State Express 555 and other key brands. It was only when risks to contraband sales increased that the company made greater efforts to establish a legal presence in the country. Attempts to stress the long history of BAT in China and a proclaimed commitment to corporate social responsibility have been used to facilitate later negotiations.

    Conclusion: China has remained relatively closed to transnational tobacco companies (TTCs) during its transition to a market economy, maintaining a firm grip over foreign investment and imports. Nonetheless, BAT has circumvented such restrictions through illegal imports and exploitation of inconsistencies in the local enforcement of advertising bans. Governments need to understand and address the full range of market entry tactics by TTCs in order to ensure effective tobacco control.

    Footnotes

    • Conflicts of interest: No competing interests

    Free sample

    This recent issue is free to all users to allow everyone the opportunity to see the full scope and typical content of Tobacco Control.
    View free sample issue >>

    Don't forget to sign up for content alerts so you keep up to date with all the articles as they are published.


    This insightful video is produced by Cancer Research UK

    Navigate This Article