In late 2011, a major anti-corruption NGO revealed that Japan Tobacco International (JTI), one of the four largest tobacco corporations worldwide, was complicit in the smuggling of its own product throughout Eastern Europe and the Middle East.
Before the NGO’s scathing indictment, JTI had several chances to subdue the smuggling of its product. In fact, JTI hired internal investigators to sniff out the illegal use of its product. When investigators discovered substantial evidence of illegal trade. But when investigators attempted to report their findings to their superiors, managers supposedly interfered with all efforts to curb said trafficking. Moreover, one JTI’s senior Vice Presidents went to great pains to block investigators from looking into JTI’s main distributor in the Middle East.
After several months of blocked investigations, computer hackings, and general harassment, JTI fired the investigators just for doing their jobs.
When the NGO report came out, JTI simply dismissed it as sensationalism, despite the overwhelming evidence presented their internal investigators.
But why would a company go through such effort to overlook smuggling? According to one of JTI’s managers in Russia, the answer is simple. Even if the EU increases seizures and imposes fines for smuggled cigarettes, the cost to JTI won’t hold a candle to the profits made from smuggled products . In short, despite a public commitment to stop smuggling, it just doesn’t pay for tobacco companies to stop it. If more people get addicted to their brands, it’s more money in their pockets.
Unsurprisingly, the JTI story is not an isolated one.
In November 2014, British American Tobacco was fined $1.03 Million for oversupplying cigarettes in a low-tax market to be smuggled back into the UK. A BAT spokesman denied the charge. The implication of oversupplying spreads across the continent and the world - allowing terrorist groups to profit from selling undocumented surplus cigarettes.
And if all four Transnational Tobacco Corporations work together to promote similar aspects of their agenda like Codentify, there is no reason to assume that PMI and Imperial wouldn’t be complicit in smuggling their products as well.