Tobacco Industry Manipulation of Tobacco Excise and Tobacco Advertising Policies in the Czech Republic: An Analysis of Tobacco Industry Documents

Risako Shirane and colleagues examined the the Legacy Tobacco Documents Library and found evidence of transnational tobacco company influence over tobacco advertising and excise policy in the Czech Republic, a country with one of the poorest tobacco control records in Europe. Background: The Czech Republic has one of the poorest tobacco control records in Europe. This paper examines transnational tobacco companies' (TTCs') efforts to influence policy there, paying particular attention to excise policies, as high taxes are one of the most effective means of reducing tobacco consumption, and tax structures are an important aspect of TTC competitiveness. Methods and Findings: TTC documents dating from 1989 to 2004/5 were retrieved from the Legacy Tobacco Documents Library website, analysed using a socio-historical approach, and triangulated with key informant interviews and secondary data. The documents demonstrate significant industry influence over tobacco control policy. Philip Morris (PM) ignored, overturned, and weakened various attempts to restrict tobacco advertising, promoting voluntary approaches as an alternative to binding legislation. PM and British American Tobacco (BAT) lobbied separately on tobacco tax structures, each seeking to implement the structure that benefitted its own brand portfolio over that of its competitors, and enjoying success in turn. On excise levels, the different companies took a far more collaborative approach, seeking to keep tobacco taxes low and specifically to prevent any large tax increases. Collective lobbying, using a variety of arguments, was successful in delaying the tax increases required via European Union accession. Contrary to industry arguments, data show that cigarettes became more affordable post-accession and that TTCs have taken advantage of low excise duties by raising prices. Interview data suggest that TTCs enjoy high-level political support and continue to actively attempt to influence policy. Conclusion: There is clear evidence of past and ongoing TTC influence over tobacco advertising and excise policy. We conclude that this helps explain the country's weak tobacco control record. The findings suggest there is significant scope for tobacco tax increases in the Czech Republic and that large (rather than small, incremental) increases are most effective in reducing smoking. : Please see later in the article for the Editors' Summary Background: Every year, about 5 million people die from tobacco-related diseases and, if current trends continue, annual tobacco-related deaths will increase to 10 million by 2030. Faced with this global tobacco epidemic, national and international bodies have drawn up conventions and directives designed to control tobacco. For example, European Union (EU) Directives on tobacco control call for member states to ban tobacco advertising, promotion, and sponsorship and to adopt taxation policies (for example, high levels of tobacco excise tax) aimed at reducing tobacco consumption. Within the EU, implementation of tobacco control policies varies widely but the Czech Republic, which was formed in 1993 when Czechoslovakia split following the 1989 collapse of communism, has a particularly poor record. The Czech Republic, which joined the EU in 2004, is the only EU Member State not to have ratified the World Health Organization's Framework Convention on Tobacco Control, which entered into force in 2005, and its tobacco control policies were the fourth least effective in Europe in 2010. Why Was This Study Done?: During the communist era, state-run tobacco monopolies controlled the supply of cigarettes and other tobacco products in Czechoslovakia. Privatization of these monopolies began in 1991 and several transnational tobacco companies (TTCs)—in particular, Philip Morris and British American Tobacco—entered the tobacco market in what was to become the Czech Republic. In this socio-historical study, which aims to improve understanding of both effective tobacco excise policy and the ways in which TTCs seek to influence policy in emerging markets, the researchers analyze publically available internal TTC documents and interview key informants to examine efforts made by TTCs to influence tobacco advertising and tobacco excise tax policies in the Czech Republic. A socio-historical study examines the interactions between individuals and groups in a historical context. What Did the Researchers Do and Find?: The researchers analyzed 511 documents (dated 1989 onwards) in the Legacy Tobacco Documents Library website (a collection of internal tobacco industry documents released through US litigation cases) that mentioned tobacco control policies in the Czech Republic. They also analyzed information obtained from sources such as tobacco industry journals and data obtained in 2010 in interviews with key Czech informants (including a tobacco industry representative and a politician). The researchers' analysis of the industry documents indicates that Philip Morris ignored, overturned, and weakened attempts to restrict tobacco advertising and promoted voluntary approaches as an alternative to binding legislation. Importantly, while the internal documents show that Philip Morris lobbied for a specific excise tax (a fixed amount of tax per cigarette, a tax structure that favors the expensive brands that Philip Morris mainly markets), the European strategy employed at that time by British American Tobacco was to lobby for a mixed excise structure that combined an “ad valorem” tax (a tax levied as a proportion of price) and a specific tax, an approach that favors a mixed portfolio of tobacco brands. By contrast, the documents show that TTCs collaborated in trying to keep tobacco taxes low and in trying to prevent any large tax increases. This collective lobbying successfully delayed the tobacco tax increases required as a condition of the Czech Republic's accession to the EU. Finally, the interview data suggest that TTCs had high-level political support in the Czech Republic and continue actively to attempt to influence policy. What Do These Findings Mean?: These findings provide clear evidence that Philip Morris and British American Tobacco (the two TTCs that have dominated the Czech market since privatization of the tobacco industry) have significantly influenced tobacco advertising and excise policy in the Czech Republic since 1989. The findings, which also suggest that this influence is ongoing, help to explain the Czech Republic's poor tobacco control record, which was reflected in a fall in the real price of cigarettes between 1990 and 2000. More generally, this study provides valuable insight into how TTCs might try to influence policy in other emerging markets. Improvements in global tobacco control, the researchers conclude, will be possible only if efforts are made to protect tobacco control policies from the vested interests of the tobacco industry, a principle enshrined in the WHO Framework Convention on Tobacco control, and if public and political attitudes to the industry shift. Additional Information: Please access these Web sites via the online version of this summary at http://dx.doi.org/10.1371/journal.pmed.1001248.