Croatia: hot salaries, cool penguins
Life is not easy in many of the countries of former Yugoslavia, even those whose devastation by war is now several years in the past. Croatia, for example, is a country of around 4.5 million people, of whom some 318 000 are officially unemployed, and 160 000 continue to work without pay for former state owned companies in order to preserve their social security benefits. The tobacco industry, thanks to selling an addictive product, can shrug off the hardest of times, however. In June the highest salary, according to government statistics, was paid to an executive of the independent Rovinj Tobacco Company, Croatia's largest tobacco manufacturer.
While the average salaried employee gets by on around 3000 kunas (approximately $408) a month, the tobacco chief got 556 000 kunas ($75 600) in June. An experienced doctor (the experience might include dealing with the devastating results of war) gets around 5500 kunas ($750), and that's when the money actually comes through—five salary payments in seven months was par for the course by August 1999. A doctor's work typically involves night shifts and emergencies, which will include an increasing number of cases of tobacco induced disease. During the doctor's night shifts, one imagines, the tobacco executive sleeps peacefully, possibly between silk sheets.
But perhaps not all the tobacco boss's sleep is sound. He might, for example, be dreaming of the long way he still has to go to match the earnings of, say, Geoffrey C Bible, CEO of Philip Morris. According to the US financial news organisation Forbes, Bible's total earnings are more than 25 times that of the Croatian boss, at $24 424 000 per annum, or more than two million dollars each month.
The Rovinj boss might also be worrying about how the local market will develop. Despite having tried to fight off the entry of British American Tobacco (BAT) into the Croatian market (which resulted in his unusually large June salary, according to his company), the fight was ultimately lost. BAT now has a stake in the Zadar Tobacco Factory, the country's third largest tobacco manufacturer.
The government has recently announced plans for new tobacco control legislation, tightening up existing restrictions, including those on smoking in schools and public places, but stopping well short of an advertising ban. With BAT through the door, and Rovinj clearly keen to defend its patch, Croatia is likely to see a period of increased tobacco promotion. As if in anticipation, Rovinj tried its hand at some topical advertising during the summer, when Croatians were sweltering in some of Europe's highest temperatures and humidity. A brand called COOL, billed as “Refreshment from Rovinj”, was promoted on billboards featuring some undeniably cool looking penguins, as well as on postcards distributed free with the Split daily newspaperSlobodna Dalmacija, which has the third highest circulation in Croatia.
Ultimately, however, there is a new source of hope for protecting future generations of Croatians, and other Europeans, from tobacco. Like other countries in the region whose goal is to become full members of the European Union (EU), Croatia will eventually have to put in place EU style legislation, including a ban on almost all forms of tobacco promotion. Then the ads will come down, the penguins will melt away, and tobacco bosses will have less of a future to dream about.
All articles written by David Simpson unless otherwise attributed. Ideas and items for News Analysis should be sent to David Simpson at the address given on the inside front cover.