A review of the impacts of tobacco industry privatisation: Implications for policy

A.B. Gilmore, G. Fooks, M. Mckee

Research output: Contribution to journalArticle

Abstract

State-owned tobacco companies, which still account for 40% of global cigarette production, face continued pressure from, among others, the International Monetary Fund (IMF), to be privatised. This review of available literature on tobacco industry privatisation suggests that any economic benefits of privatisation may be lower than supposed, because private owners avoid competitive tenders (thus underpaying for assets), negotiate lengthy tax holidays and are complicit in the smuggling of cigarettes to avoid import and excise duties. It outlines how privatisation leads to increased marketing, more effective distribution and lower prices, creating additional demand for cigarettes among new and existing smokers, leading to increased cigarette consumption, higher smoking prevalence and lower age of smoking initiation. Privatisation also weakens tobacco control because private owners, in their drive for profits, lobby aggressively against effective policies and ignore or overturn existing policies.

This evidence suggests that further tobacco industry privatisation is likely to increase smoking and that instead of transferring assets from state to private ownership, alternative models of supply should be explored.
Original languageEnglish
Pages (from-to)621-642
JournalGlobal Public Health
Volume6
Issue number6
DOIs
Publication statusPublished - 2011

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis Group in Global Public Health on 27 July 2011, available online at: http://www.tandfonline.com/10.1080/17441692.2011.595727

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