As the presidential candidates were prepping for their fiery debate last week, Huffington Post broke a story linking Mitt Romney’s pre-Bain Capital consulting company, Bain & Co., to Big Tobacco’s expansion in Russia. The tobacco epidemic currently devastating Russia, which Prime Minister Dmitry Medvedev is now attempting to bring under control, can be linked directly back to Bain’s role in consulting for British American Tobacco (BAT) in the 1990s. While this story is garnering interest from political junkies now, the outrageous truth is that what happened in Russia is just one instance of Big Tobacco’s sustained and systematic worldwide exportation of tobacco-related disease.
According to HuffPo’s investigative report, shortly after the fall of the Soviet Union, Bain brokered the purchase of tobacco factories for BAT, and devised a marketing strategy to target women and youth. The report cites internal industry documents detailing the dirty tactics Bain used to help Big Tobacco break into the post-Soviet market. For example, Bain:
- conducted studies that showed addicting women and youth would be a key contributor to growth.
- advised BAT on how to avoid taxes and anti-monopoly regulations.
- advised BAT to mobilize front groups such as retailers associations to support “smoker’s rights.”
- influenced and developed partnerships with government officials to undermine public health policy.
And all this was very lucrative for Bain.
Big Tobacco’s deadly tactics
To anyone familiar with how Big Tobacco operates, these tactics — shocking as they are — come as no surprise. They are emblematic of the industry’s business strategy to export the tobacco epidemic from the world’s wealthiest countries to its most economically disadvantaged. The tragic result? Almost six million entirely preventable deaths per year.
In Russia, as elsewhere, the industry has gone after women as a key “expansion market.” Bain’s reports showed women to be a target demographic for Big Tobacco’s marketing campaigns. As a result of these studies, in 2009, Russia was the largest market worldwide for Slim/Ultra slim cigarettes that appeal to women. The result has been devastating for women’s health. In 1992, reports showed that only 7 percent of Russian women smoked. After BAT and other Big Tobacco corporations took over Russian markets, that number jumped to nearly 22 percent.
Now, Prime Minister Medvedev is scrambling to undo the havoc wrecked by Bain and Big Tobacco. He is supporting tobacco control legislation to protect women and others from devastating marketing tactics and cracking down on Big Tobacco through increased taxation of their product — potentially cutting demand for cigarettes by almost 27 percent. Not surprisingly, Philip Morris International, BAT and Japan Tobacco are fighting the new bill, to be introduced next month in Russian Parliament.
A lifesaving treaty
The good news: the global community now has a powerful tool to curb Big Tobacco’s aggressive expansion, facilitated by the likes of Bain & Co., and to protect implementation of public health policies like Russia’s newly proposed legislation.
Thanks to the strategic organizing and grassroots mobilization by Corporate Accountability International and our international allies, 175 countries and the EU have ratified the global tobacco treaty — the world’s first public health and corporate accountability treaty, known officially as the Framework Convention on Tobacco Control. The treaty strengthens the ability of countries like Russia (and Norway and Australia) to introduce and enforce the world’s most effective tobacco control legislation.
As you might imagine, Big Tobacco hates the treaty…and does all it can to weaken it. In Russiaindustry interference threatens to thwart the passage of the treaty-backed law.
Big Tobacco is also mounting pressure on delegates to the next round of treaty negotiations in Seoul, South Korea in November. As we watch the results of Russia’s law, Corporate Accountability International will also be at the treaty negotiations to challenge Big Tobacco’s attempts to derail the talks. We’ll make sure the treaty emerges stronger than ever, empowering countries to pass policies that will save millions from Big Tobacco’s lethal reach, and turn the tide on Bain’s deadly legacy.
