We’re quitting smoking, so why is big tobacco booming?


Smoking rates in the UK
have been falling for decades, but at the same time cigarette companies
are making more money than ever. They’ll tell you they are moving away
from cigarettes and towards healthier alternatives, but if you look a little closer
that’s nowhere near the full story. So, what’s really behind big tobacco’s
big profits? Cigarette makers are in a bit of a bind. Public opinion against smoking has swayed so far
that they essentially can’t endorse their own product. So, to stay relevant they have engineered
an image overhaul. As a company, we have embarked upon a path of
achieving a smoke-free future. So the bulk of their marketing in the UK
would suggest that they are moving towards healthier alternatives like vapes. But if you look at the financial reports,
profits from these new products don’t come anywhere near what traditional cigarettes
bring in. From what we can see from their company accounts,
the clear majority of their profits still are earned from combustion tobacco
products such as traditional cigarettes. So it’s basically like printing money
because it’s basically nicotine wrapped in various layers of paper and all of those
sort of things are cheap to make, but they can sell them for a very high price,
because people are addicted. In 2015, the main six tobacco manufacturers
earned more profits than Coca Cola, Walt Disney, FedEx,
Google, McDonald’s and Starbucks combined. And you don’t make that kind of money
in a smoke-free world. So despite their product killing most of its users,
they are soldiering on. And with every new hurdle,
their tactics have to get a little smarter. So, tax increases on tobacco are a big problem
for the manufacturers. Increasing taxes is the most effective
policy we have for reducing smoking. They should increase the cost of cigarettes. We have done steadily and it works. I want to ask some people how this has
impacted their smoking habits and if you have been affected by high prices,
then let us know in the comments below. Has the price changed since you guys
started smoking? Yes, definitely.
Ridiculous. It’s like, quadruple the price. It used to be like £6.30.
Now they are like at least £8.60. Super expensive, super expensive. What is that price increase? The government taxing it all the time,
trying to cut down on smoking. Do you know who’s doing it? I don’t know actually,
probably the government to kind of discourage it. Actually, a lot of the price increases are coming
from the people making the cigarettes. Oh, bloody big tobaccos again.
I feel shafted. Between 2013 and 2015, the government increased
taxes across all price brackets of cigarettes. At the same time, the manufacturers hiked
their prices for premium cigarettes by another 53 pence. But for a pack of the cheapest cigarettes
they actually took money off, six pence to be exact. It’s called price-shifting and it’s a way for
manufacturers to keep their profits up overall without losing the smokers
who can’t afford a price rise. And by maintaining the availability of cheap tobacco,
they are also reducing motivation to quit. This means especially the poorest smokers
will miss out on the benefits of a tobacco tax. It’s keeping profits up for now
but there’s a flaw in the plan. Two-thirds of long-term smokers
will actually die due to smoking-related ills. So the tobacco industry has a fundamental problem. A lot of their existing consumers will die,
so other existing consumers will quit. So to continue to sell cigarettes over time,
they need new people to start smoking. So, finding new customers is pretty tricky
if you can’t advertise, market or even display your products in a shop. But luckily for manufacturers, this whole world
of opportunity has opened up. When you’re looking at a heavily regulated industry,
that still have billions of odd dollars to spend, what better tool is there than social media
where they can access billions of young people on platforms that are very underregulated
in this area? An influencer working for the cigarette brand
Lucky Strike shared this document with Caroline’s team which is basically a contract. It tells them when they should post to their followers, how many posts they are expected to do, the hashtags they are meant to use and the general cool images that they are supposed to be promoting. This was completely secret marketing, you know. These were not influencers who were saying: ‘Here is a post I was paid to promote.’ This was part of an industry-wide strategy
to make smoking look cool again to an entire new generation
of people online, to make it look like smoking was all over your
news feed and to make it look like smoking was normal. These tactics work as a short-term fix,
but they can’t keep big tobacco in business forever. With a customer base that won’t stop dying,
what they really need is a clean slate. So, where do you find millions of people who haven’t been bombarded with anti-smoking campaigns? They’re targeting markets in Asia,
in India, Indonesia, south-east Asia, Africa and so they are shifting the epidemic
away from the developed countries into the less developed countries. They’re doing all of the things that
we have made illegal in the UK. They advertise, they market to children,
they put their products in places where consumers are going to see
those brands. They try to make those products seem glamorous
and very western, so they make people want to engage in this smoking behaviour. So I’ve been exchanging a few emails with
Sarah Boseley, she’s the Guardian’s health editor. She’s done loads of work about big tobacco’s
shady tactics in the developing world. Definitely Africa has been targeted. When you started looking into it,
what did you find? There’s a lot of lobbying by the industry. A lot of it was quasi threats,
they were putting government ministers under pressure trying to persuade them not to pass the legislation. We actually got hold of various letters
from tobacco companies using legalistic language to government ministers
who simply don’t know as much about it as the companies do. So they are saying: ‘Look, you are going to be
in breach of international regulations, risks having damaging consequences on Togo’s economy and business environment.’ So you know, your country is going to go
down the pan if you bring in plain packaging. Obviously not true. Do you think that there is potential for
smoking rates in, for example, Kenya to be as high as they once were
in the UK? Unfortunately, I think, there is every possibility
that smoking could take off, but the World Health Organisation is doing all it can
to urge the governments on to impose restrictions, so there is a chance that this could be
nipped in the bud and I just really hope it is. So every year there’s 350 million miles of
cigarette smoke. That’s enough to make a continuous chain of cigarettes
from the Earth to the Sun and back with enough left over for several
round trips to Mars. It’s the most successful business enterprise
in the history of human civilisation, as well as being the most deadly. If you are a smoker or an ex-smoker, please let us know about your relationship with cigarettes and whether learning about big tobacco changes
how you think about smoking. Thank you for watching and, if you want to see more videos from the Guardian, don’t forget to like and subscribe.