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Tobacco brands slip into Myanmar without fanfare

Date: 27/08/2013
Source: Times Dispatch
Tobacco brands slip into Myanmar without fanfare

YANGON, Myanmar As some of the world’s biggest companies trumpet their arrival in Asia’s hottest frontier market, the tobacco industry has a different strategy: It’s slipping into Myanmar without fanfare.

The impoverished nation of 60 million people emerged from a half-century of isolation and brutal military rule two years ago. With most international sanctions against the country lifted or suspended, foreign businesses from Coca-Cola and Unilever to Suzuki Motors have scrambled to get in.

So, too, has Big Tobacco — but without the ribbon cuttings or grandly worded press announcements.

British American Tobacco, the world’s second-largest cigarette manufacturer, shepherded a select audience of government officials to a low-key ceremony last month where it formalized a $50 million investment over five years to produce, market and sell its brands in Myanmar. Its factory, to be built on the outskirts of Yangon, will create about 400 jobs.

Japan Tobacco, No. 3 globally, quietly inked a deal nearly a year ago with local partner tycoon Kyaw Win. Company spokesman Royhei Sugata said a factory was being built but refused to discuss details, from the project’s scale or brand name to the plant’s location.

China’s largest tobacco producer also is setting up a multimillion-dollar joint venture.

“They seem to think by entering the market stealthily, they can avoid public scrutiny,” said Tin Maung, a retired army major and Myanmar’s top anti-smoking campaigner.

In a country where roads in many places are almost unnavigable and power outages constant, the nominally civilian government is hopeful that foreign investment will create jobs and help speed development. But other priorities such as health, the environment and public welfare are sometimes swept aside.

Nang Naing Naing Shane, who heads the Ministry of Health’s National Tobacco Control Program, said the Health Ministry’s strong opposition to BAT, JT and others was overridden by the Myanmar Investment Commission. The commission’s director quit under a cloud of suspicions about graft, but tobacco investment approvals were not overturned.
For international tobacco companies, which face declining smoking rates in their former strongholds, Myanmar is an enticing prospect.
Awareness about the health hazards is low, tobacco controls are weakly enforced, and the anti-smoking lobby is effectively a one-man act.
A large proportion of the population smoke, but only a fraction of them reach for filtered cigarettes.

According to a 2007 World Health Organization survey, 45 percent of all men smoke or chew tobacco. The rates for women and teenage boys are 8 percent and 13 percent, respectively.

BAT’s chief executive, Nicandro Durante, said on the company’s website that BAT, returning to Myanmar 10 years after it was forced to leave because of controversial links to the abusive military, was “truly excited” to be back. It was also “keen to play an active part in the country’s economic and social advancement,” he wrote.

The tradition of smoking cigarlike “cheroots” — made from finely chopped up tobacco leaves, stems and wood chips, tamarin and other flavors — starts young in Myanmar, often a boy helping his father light up.

While many people know smoking is bad for health, few fully understand just how bad.

Topic: Investments
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