New research shows that smoking bans are not only shrinking tobacco firm’s market at home but also limiting their ability to invest in markets abroad.
More than 170 countries such as Ireland, the UK, Greece, Bulgaria, Malta, Spain and Hungary have now imposed various bans on smoking in public areas and buildings, which has naturally led to a decline in smoking in those countries.
It was thought when the bans were introduced that tobacco companies would instead target those countries without bans, usually those in the developing world. However according to research by Nigel Driffield, of Warwick Business School, Jo Crotty, of Aberystwyth University, and Chris Jones, of Aston Business School, has found this has not happened.
In a study of 141 companies across 20 countries over a 10-year period, the researchers found that smoking bans in the country where the firm was based reduced the likelihood of them investing abroad.
Professor Driffield stated, “Not only did bans affect the tobacco firm’s cash flow, and therefore reduce their funds for international expansion, there is also evidence that they are sensitive to home public opinion when investing abroad.”
He continued, “China, for example, has a smoking ban but it has numerous exemptions, including restaurants, bars, hotels and airports. Historically, it has seen growth in domestic sales of more than four per cent a year, along with increased internationalization of its tobacco industry, particularly in Asia and Africa.”
“Equally, tobacco companies from EU countries with only limited bans, or where bans have less impact due to weather, such as France and Italy, continue to see their tobacco firms invest abroad.”
The World Health Organisation estimates more than six million people die every year from smoking related illnesses. These figures are falling in the developed world, but continue to rise in developing countries. The study highlights the role that smoking bans in developed countries can play in seeking to reduce these figures.
– Cover Image: dw.com