Tobacco Firms Research Articles

The impact of the Russia–Ukraine war on stock prices, profits and perceptions in the food supply chain

AbstractThe Russian invasion of Ukraine in February 2022 had profound consequences for the global economy. As both countries are major commodity exporters, the food value chain was also affected. This study investigates the impact of the invasion on stock prices, profitability and sentiments of agribusinesses along the food supply chain by using an event study, financial data, and a sentiment analysis of annual reports. Overall, the findings show that firms in the food value chain were negatively impacted, with regional and sector‐specific differences. Agribusiness firms in Europe and Japan were more negatively impacted by the war than those in the United States. Stock prices of Brewers, Packaged Food and Meats, Soft drinks, and Tobacco firms were negatively impacted by the invasion, while other sectors experienced no or little impact on stock prices. Fertilizers and Agrochemicals firms overall achieved a higher profitability in 2022 compared to previous years. [EconLit Citations: G01, G12, E44, Q01].

How do corporate social responsibility initiatives enhance sustainability performance? Evidence from tobacco firms

How do corporate social responsibility initiatives enhance sustainability performance? Evidence from tobacco firms

Understanding the ethical legitimacy of tobacco advertising, promotion and sponsorship in Indonesia in the context of increased government regulation: a legitimacy-as-perception perspective

PurposeThe authors explore the metaphors people from Indonesia use to describe their propriety beliefs about the ethical legitimacy of tobacco advertising, promotion and sponsorship (TAPS). This paper aims to understand why there is a consensus of propriety beliefs about the ethical legitimacy of TAPS in the face of increased government regulations and international criticism of such marketing practices.Design/methodology/approachThe data were collected from 71 study participants using both focus groups and in-depth photo-elicitation interviews.FindingsThe participants use three sets of metaphors to describe propriety beliefs. First, participants used metaphors that described the centrality of TAPS and smoking in Indonesian society. Second, they used metaphors that described TAPS regulations and regulators and third, they used metaphors that described the activities of tobacco firms. Participants’ photographs revealed strong collective validity of TAPS within Indonesia and strong propriety beliefs consensus.Research limitations/implicationsThis study is one of the first to integrate legitimacy-as-perception theory and the ecological systems framework to gain a multilevel insight into the TAPS activities are perceived as legitimate and, therefore, not unethical.Practical implicationsThe findings have important implications for tobacco control regulators who wish to curtail TAPS in a country where all levels of the ecological system reinforce their collective validity. Policy and regulative initiatives must, therefore, be used in a systemic way to change this collective validity.Originality/valueTo the best of the authors’ knowledge, this study is one of the first to use a legitimacy perspective to understand the ethical legitimacy of TAPS in marketing literature. It is also the first, to the best of the authors’ knowledge, to use the three legitimacy-as-perception constructs: propriety beliefs, collective validity and consensus of propriety beliefs. The authors show that despite increased government regulations and international disapproval, TAPS continues to be considered ethically legitimate in Indonesia.

Supply chain water-reporting practices in the food, beverage and tobacco sector: a comparative study

ABSTRACT Companies are responsible for reporting not only their own water practices but also those of their suppliers. An evaluation of the supply chain water information in the sustainability and integrated reports of 49 food, beverage and tobacco firms listed on the JSE (South Africa), ASX (Australia) and Dow Jones Sustainability Index (DJSI) exchanges, respectively, was conducted. It was found that the companies fall short in their disclosure of consumption of water-related supply chain information. The firms listed on the DJSI and JSE outperformed the Australian companies. This paper presents and applies a novel water disclosure index of supply chain information.

Practical Applications of Do Tobacco Share Owners Finance the Tobacco Business?

In <b>Do Tobacco Share Owners Finance the Tobacco Business?</b>, from the Winter 2020 issue of <b><i>The Journal of Impact and ESG Investing</i></b>, authors <b>David Blitz</b> and <b>Laurens Swinkels</b> of <b>Robeco</b> evaluate the role of investors in financing the tobacco industry. Motivated by a sense of moral obligation, many investors are choosing to exclude tobacco stocks from their portfolios. However, it is unclear whether tobacco companies rely on such funds to finance expansion or other business activities. Using a case analysis, the authors determine that tobacco firms typically do not raise capital though incremental equity issuances. Instead, it is cheaper for them to use existing capital or seek funds through the bond market. Therefore, tobacco shareholders are not truly financing tobacco companies or their activities. Additionally, those who divest from tobacco stocks lose the opportunity to vote at shareholder meetings, preventing them from pushing the company toward more sustainable initiatives.

Interacting Corporate Political Activities with Evidence from the Tobacco Industry

AbstractResearch on firm-level corporate political activity often treats firm-government interactions as independent of the market competition between firms. Yet, firms that compete in the market will consider rivals when making strategic nonmarket decisions. Ignoring market rivalry when studying nonmarket strategy introduces fundamental endogeneity problems and potentially overlooks a central mechanism explaining firms’ political choices. Our study demonstrates this by investigating the strategic nonmarket interactions of large US tobacco manufacturers, a case study that is independently interesting. From 1992 to 2008, the US tobacco industry experienced dramatic upheaval in its business environment as regulatory authority shifted from the state to federal level, under the Food and Drug Administration. Using firm-candidate–cycle data, a complete information campaign contributions game, played in the nonmarket environment, is estimated for two of the United States’ largest tobacco manufacturers. Results demonstrate that, rather than acting in isolation, US tobacco firms strategically coordinated their firm-level political campaign contributions.

Tobacco industry capitalises on the COVID-19 pandemic

The COVID-19 pandemic does not seem to have done much damage to the tobacco industry. “Beyond disruption to supply chains, analysts believe the short-term impact of COVID-19 on the tobacco industry will be relatively limited”, states British American Tobacco (BAT) on their website. They add that “it is likely that key cigarette volumes were only slightly lower than expected in 2020”. Having started the year by worrying about reduced consumption and stock shortages occasioned by factory closures, by the end of 2020 the major tobacco firms were raising their sales and profit targets.

In-and-Out of Tobacco Farming: Shifting Behavior of Tobacco Farmers in Indonesia

Understanding the variables that affect farmers’ decisions as to whether to grow tobacco and/or other crops provides important insights into their economic lives and can help to inform the development and implementation of policies that shape both tobacco production and tobacco control, such as increasing tobacco excise taxes. This study employs complementary quantitative and qualitative methodologies to identify variables that affect tobacco farmers’ economic decision making in Indonesia, a major tobacco producer. The research focuses on the variables that affect tobacco farmers’ decisions to continue tobacco farming or shift to non-tobacco farming. It finds that tobacco farmers’ decision making is complex but also predictable. The results of the quantitative analysis suggest that farming profits and positive rainfall shocks are two of the key variables that affect the decision to cultivate tobacco. The qualitative results confirm these findings and further illuminate that access to credit, education (agricultural and otherwise) and information play substantial roles in farmers’ economic decision making. Most of these variables are affected by the unequal relationship between the tobacco firms that buy tobacco and the farmers, wherein the farmers are consistently at a disadvantage in terms of negotiating key parameters such as prices and evaluation of leaf quality.

Do Tobacco Share Owners Finance the Tobacco Business?

Many investors do not want to finance morally objectionable activities, such as smoking tobacco, with their money. But is investing in the shares of tobacco companies the same as financing the tobacco business? Analyzing two decades of data, this study finds that investors in tobacco shares have not provided any fresh capital to tobacco firms for expanding their operations, so the buying or selling of tobacco shares is just a financial exchange and a transfer of ownership between two investors. The authors find evidence for capital flows in the opposite direction, namely tobacco companies repurchasing their own shares in the open market. The results suggest that divesting from tobacco stocks is ineffective at improving public health or at increasing the cost of capital of tobacco firms, and moreover, investors lose the right to vote and initiate proposals at shareholder meetings. The authors conclude that sustainable investors may wish to differentiate their policies, depending on the external financing needs of companies. <b>TOPICS:</b>Equity portfolio management, ESG investing, portfolio management <b>Key Findings</b> • Investors in tobacco shares have not provided any fresh capital to tobacco firms for expanding their business. • Divesting from tobacco stocks appears ineffective at improving public health. • Share owners may have more real impact with active voting and engagement.

Do Tobacco Share Owners Finance the Tobacco Business?

Many investors do not want to finance morally objectionable activities with their money, such as smoking. But is investing in the shares of tobacco companies the same as financing the tobacco business? Analyzing two decades of data we find that investors in tobacco shares have not provided any fresh capital to tobacco firms for expanding their operations, so the buying or selling of tobacco shares is just a financial exchange and a transfer of ownership between two investors. We do find evidence for capital flows in the opposite direction, namely tobacco companies repurchasing their own shares in the open market. Our results suggest that divesting from tobacco stocks is ineffective at improving public health or at increasing the cost of capital of tobacco firms, while investors lose the right to vote and initiate proposals at shareholder meetings. We conclude that sustainable investors may wish to differentiate their policies depending on the external financing needs of companies.

Pricing decisions, competition and liquidity constraints

PurposeThis study investigates the pricing decisions of the UK wholesale and retail food, beverages and tobacco sector over 2007–2016 using 19 four-digit level NACE Rev.2 classification industries.Design/methodology/approachThe Hall (1988) and Roeger (1995) model is employed to estimate the price-cost margin for the aggregate sector and each constituent industry.FindingsThe results suggest the presence of weak imperfect competitive conduct as the markup value is close to perfect competition. Moreover, it is found that industries with higher market share and liquidity reserves tend to charge a lower markup, validating the presence of price wars and competitive incentives in the sector.Originality/valueThis paper contributes to the literature of pricing decisions and how access to available liquidity may affect the selling price of products. The pricing strategies also depend on the market structure as firms operating in more competitive sectors may start price wars more often than their counterparts in more concentrated sectors. Therefore, this study adds value to the investigation of pricing decisions under liquidity constraints across the UK wholesale and retail food, beverages and tobacco firms.

From Maverick to Mole: John C. Burnham, Tobacco Consultant

From Maverick to Mole: John C. Burnham, Tobacco Consultant

The Essence of Intellectual Property Rights Under Article 17(2) of the EU Charter

AbstractSmoking kills. It is also very costly, which is why many governments try to change the habits of their citizens, including by changing the packaging of the products they buy. Of course, tobacco firms are pushing against such laws. They see their rights, in particular, rights to intellectual property, violated. They argue that such legislative changes take away the essence of their hard-earned IP rights and should not be permissible. They point out that the CJEU is allegedly redefining the “essence” of fundamental rights and its function in the system of limitations and developing a set of core inviolable rights.How justified are these arguments? The absolute theory of essence says that the essence of rights cannot be interfered with or taken away, including by the legislator. The relative theory of essence, on the other hand, claims that interference with essence is just a more serious interference which is still subject to the typical proportionality analysis. Therefore, the adoption of either of these two theories has profound consequences. What might constitute the essence of intellectual property rights? When are legislators touching upon it? Is the CJEU really advancing a notion of essence that can prevent legislative changes, or at least make them very difficult? The answer to all these questions depends on our understanding of what constitutes the “essence” of intellectual property rights, and what consequences this notion has under Article 17(2) of the EU Charter of Fundamental Rights.

Stakeholder Engagement Strategies After an Exogenous Shock: How Philip Morris and R. J. Reynolds Adapted Differently to the 1998 Master Settlement Agreement

This study contributes to understanding stakeholder engagement strategies by examining competitive responses alongside sociopolitical implications after a major exogenous shock—the 1998 Master Settlement Agreement (MSA) between the “Big Four” U.S. tobacco firms and 46 state attorneys general. We compare the different stakeholder engagement strategies of the two remaining U.S. tobacco manufacturers, Philip Morris (PM) and R. J. Reynolds (RJR), between 1998 and 2017. Implications for stakeholder theory from a relatively rare natural experiment highlight the importance of simultaneously managing multiple stakeholders, inclusive of domestic and international sociopolitical and value chain stakeholders over time, for sustained value creation. Although PM and RJR initially pursued heterogeneous strategies by re-configuring relationships with relevant stakeholders, each firm’s growth prospects for the first decade post-MSA were exacerbated by various stakeholders through withholding and selective engagement strategies. Implications for how multiple, simultaneous stakeholder relationships can serve as important resources for achieving or limiting sustained growth are discussed.

Normalizing Tobacco? The Politics of Trade, Investment, and Tobacco Control.

Tobacco industry denormalization (TID), portraying tobacco product manufacturers as a deadly industry, is a major strategy for public health advocates. Using this strategy, activists around the world have successfully pushed for governments to enact tobacco control regulations, including the unprecedented international Framework Convention on Tobacco Control (FCTC). TID has been a distinctive legal and political strategy that has affected the place of tobacco in law and has both inspired and constrained those who would imitate the strategy in other areas of regulation, such as diet or alcohol. It is therefore a case study in the creation of a distinctive legal approach and of threats to that approach from the changing role of world trade and investment law, which creates a new set of venues that tobacco industry advocates can use to redefine tobacco as a normal good and to seek out "fair and equitable treatment" for their industry. I review legal and policy documents pertaining to two major challenges to tobacco control policies in Australia and Uruguay aimed at controlling industry branding. International trade and investment law challenges TID and raises fundamental questions about the role of the state in protecting public health. Recent trade disputes involving Uruguay and Australia illustrate this dynamic. Despite losing high-court challenges against packaging regulations in both countries, tobacco firms were still able to challenge states in a different way, through international trade and investment agreements. This article identifies the industry's strategies and the responses of those seeking to avoid renormalizing tobacco as a part of world trade. In particular, states must demonstrate that their tobacco control policies satisfy standards set by tribunals, which include standards of good governance, and they must prepare their policies in a way that reduces legal risk and requires good governance. Although TID has strengthened the hand of tobacco control advocates, TID strategies alone are not sufficient to defend public regulations against extraterritorial legal challenges in an arena that resists the basic TID technique of singling out a particular industry. Public health advocates might also note the FCTC's aid in helping governments defend themselves against these challenges and consider similar international instruments for other areas.

PAJAK TEMBAKAU: PERMASALAHAN PRODUKSI ROKOK ILEGAL DI INDONESIA

Tax which can influencea country’s economy and society’s prosperity, namely through increasing health and revenue objectives (UN 2018 p. 40), such as tobacco tax. In Indonesia, the revenue from tobacco tax had been increasing from 2007 to 2018. This paper argues that Indonesia should tax the informal tobacco firms based several strategies. The contributors of Indonesian illicit cigarettes are 90 percent from domestic industries and 10 percent from oversea industries. The possible factors which cause the illicit cigarettes are Indonesian complex tax structure and negative behaviour of cigarettes firms. To solve the issues, the Indonesian government should conduct several strategies. First, analysing cost and benefit of taxing the informal sectors. Second, after deciding to tax the informal sectors, five tax reforms policies should be implemented by the Indonesian government, namely the capability of the revenue administration, the pragmatic approach, technical approach, firms’ incentive approach, and political and administrative incentive approaches.&#x0D; Key words: Tobacco tax, Informal Sector, National Revenue

Essence of Intellectual Property Rights under Art 17(2) of the EU Charter

Smoking kills. It is also very costly, which is why many governments try to change the habits of their citizens, including by changing the packaging of the products they buy. Of course, tobacco firms are pushing against such laws. They see their rights, in particular, rights to intellectual property, violated. They argue that such legislative changes take away the essence of their hard-earned IP rights and should not be permissible. They point out that the CJEU is allegedly redefining the ‘essence’ of fundamental rights and its function in the system of limitations and developing a set of core inviolable rights. How justified are these arguments? The absolute theory of essence says that the essence of rights cannot be interfered with or taken away, including by the legislator. The relative theory of essence, on the other hand, claims that interference with essence is just a more serious interference which is still subject to the typical proportionality analysis. Therefore, the adoption of either of these two theories has profound consequences. What might constitute the essence of intellectual property rights (IP rights)? When are legislators touching upon it? Is the CJEU really advancing a notion of essence that can prevent legislative changes, or at least make them very difficult? The answer to all these questions depends on our understanding of what constitutes the ‘essence’ of intellectual property rights, and what consequences this notion has under Article 17(2) of the EU Charter of Fundamental Rights.

Big tobacco embraces in vitro toxicology

Toxicology tests that rely on human cells and tissues instead of animals are rapidly evolving, driven by widespread interest in reducing the cost and stigma associated with animal testing and the desire to test large numbers of chemicals rapidly. Now, tobacco firms are joining pharmaceutical, pesticide, and chemical manufacturers in investing heavily in the technology. Big tobacco is making more appearances at scientific conferences focused on nonanimal toxicology testing. Representatives from tobacco giants—British American Tobacco, Japan Tobacco, Philip Morris International, and Reynolds American—participated in the annual meeting of the American Society for Cellular & Computational Toxicology (ASCCT) in September. Their ultimate goal: to convince officials at the U.S. Food & Drug Administration’s Center for Tobacco Products (CTP) that in vitro methods for predicting respiratory toxicology in humans are ready for prime time. The industry is facing increased testing requirements for e-cigarettes and othe...

Global Value Chains, Firm Preferences and the Design of Preferential Trade Agreements

AbstractThe conventional view in the literature is that only the largest and most productive firms in a country benefit, and hence support the signing of preferential trade agreements (PTAs), as they are able to take advantage of the key benefits such agreements offer. In this paper we argue that such firms may indeed be generally supportive of PTAs, but that their preferences often differ when it comes to the exact design of PTAs. These different preferences stem from the ways that firms have organized their value chains. We focus on one crucial issue where firms may hold different preferences, depending on the organization of their value chains: Rules of Origin (RoO). We test the plausibility of our argument through a detailed analysis of the preferences and political strategies of tobacco firms in the context of the North American Free Trade Agreement (NAFTA) negotiations.

The globalisation strategies of five Asian tobacco companies: An analytical framework

ABSTRACTWith 30% of the world’s smokers, two million deaths annually from tobacco use, and rising levels of tobacco consumption, the Asian region is recognised as central to the future of global tobacco control. There is less understanding, however, of how Asian tobacco companies with regional and global aspirations are contributing to the global burden of tobacco-related disease and death. This introductory article sets out the background and rationale for this special issue on ‘The Emergence of Asian Tobacco Companies: Implications for Global Health Governance’. The article discusses the core questions to be addressed and presents an analytical framework for assessing the globalisation strategies of Asian tobacco firms. The article also discusses the selection of the five case studies, namely as independent companies in Asia which have demonstrated concerted ambitions to be a major player in the world market.