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British American Tobacco’s failure in Turkey

Abstract

Background and objectives: Transnational tobacco companies (TTCs) considered Turkey an important, potential investment market because of its high consumption rates and domestic commitment to tobacco. This paper outlines how British American Tobacco (BAT) attempted to establish a joint venture with the government monopoly TEKEL, while waiting for privatisation and a private tender.

Methods: Analysis of tobacco industry documents from the Guildford Depository and online tobacco document sources.

Results: BAT failed to establish a market share in Turkey until 2000 despite repeated attempts to form a joint venture with Turkey’s tobacco monopoly, TEKEL, once the market liberalised in the mid 1980s.

Conclusions: BAT’s failure in the Turkish market was due to a misguided investment strategy focused solely on acquiring TEKEL and is contrasted with Philip Morris success in Turkey despite both TTCs working within Turkey’s unstable and corrupt investing climate.

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