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Faced with lawsuits, advertising restrictions and falling cigarette consumption in the United States, Big Tobacco, like other major manufacturers, has gone overseas in its search for more promising labor conditions and consumer markets.
Affluent countries in Europe are experiencing the same gradual decline in smoking levels seen in the United States. Some European countries are imposing even stronger restrictions against smoking. Ireland banned smoking in pubs, restaurants and offices in March 2004, and Scotland is poised to take similar action.
“We believe that the bans in Ireland and Scotland are symptomatic of a larger trend in Western Europe and the United States,” says Robert Campagnino, tobacco analyst for Prudential Securities in New York City.
That leaves less-developed countries as the most promising markets for cigarette exporters. “There are a whole lot more people in China who might start smoking American cigarettes than there are teenagers in the United States who might start smoking cigarettes,” says David A. Logan, dean of Roger Williams University School of Law in Bristol, R.I.
But the World Health Organization (WHO) hopes to slow sales down. After four years of debate, the WHO's 192 member states overcame opposition by the global tobacco industry and the United States and adopted the first international treaty to regulate tobacco products on May 10, 2003. The Framework Convention on Tobacco Control (FCTC), which the United States signed on May 10, 2004, calls on countries to establish smoking-cessation programs, restrict tobacco advertising and publicize tobacco's health risks but imposes no penalties for failing to implement the treaty. Peru became the 40th nation to ratify the FCTC on Nov. 30, 2004, which means the treaty will become part of international law on March 1, 2005. The Bush administration has yet to indicate whether it will send the treaty to the Senate for ratification.
“Now the real work must start, said WHO Assistant Director-General Catherine le Gales-Camus. “The convention sets forth the ideal goals and a roadmap for the work that needs to be implemented in countries. WHO will continue to support all countries in the vital work of building capacity and implementing the treaty.”
Meanwhile, the tobacco companies' marketing efforts are aided by the lag time between tobacco addiction and the appearance of tobacco-related diseases.
This pattern has repeated itself so predictably around the world that researchers have identified four universal, distinct stages of tobacco addiction and disease. During the first stage, essentially limited now to sub-Saharan Africa, smoking increases quickly among males.
In the second stage, male smoking rates skyrocket, female smoking grows more gradually, and tobacco-related diseases begin to kill a significant number of men, as in China, Japan, Southeast Asia, North Africa and some Latin American countries.
Eastern Europe, Southern Europe and part of Latin America are in the third stage, when male, smoking-related deaths rise rapidly, male smoking rates start falling, but female smoking rates continue to grow.
During the fourth and final stage, now being experienced by the United States, Canada, Western Europe and Australia, smoking levels among men continue to fall as death rates among male smokers peak and begin to decline, while women, who never reach smoking levels of men (except in New Zealand, Norway and Sweden), also begin to abandon the habit.
If these patterns continue to hold true, the tobacco industry's days are numbered. But despite the likely continued decline in smoking levels, demographic trends promise a prosperous future for at least the next few decades. Because there will be 2 billion more people in the world by 2030, the WHO estimates, the total number of smokers will continue to rise, even in the face of declining smoking rates.
Asia and Australia are the largest consumers of cigarettes. According to the WHO, Asia is by far the main current and future market for tobacco sales. Even at the relatively early second stage of tobacco addiction, there are more male smokers in China — more than 300 million — than the entire population of the United States.
To meet the escalating demand, China has rapidly emerged as the world's leading cigarette-manufacturing country, with production controlled by a state monopoly. Altria Group, formerly Philip Morris Companies, which accounts for about half the U.S. market, is the world's leading corporate cigarette manufacturer, with $47 billion in sales, led by Marlboro, the world's best-selling cigarette, followed by Hongtashan, made by the Chinese monopoly. The United Kingdom's British-American Tobacco Co. is the second-biggest maker, with $31 billion in sales. Japan Tobacco International, Reemsta of Germany and Altadis, a Spanish-French consortium, make up the rest of the global Big Five cigarette manufacturers.
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