International Expansion

Cigarette smoking has been declining in the United States, Canada, and Western Europe. Since the 1960s, however, the biggest cigarette manufacturers (BAT, Philip Morris, RJR/Nabisco, and, recently, Japan Tobacco Incorporated) have steadily increased their business in international markets (Taylor, 1984). This expansion has been accompanied by the weakening and dissolution of both national private and state-owned tobacco companies. The process got under way in Latin America in the 1960s, spread to eastern Asia in the late 1980s, and developed into a frenzy of deal making in Eastern Europe and the republics of the former Soviet Union in the early 1990s (Shepherd, 1985; Sesser, 1993).

Shepherd has described the process whereby a transnational corporation moves toward domi nating a formerly self-contained market through product innovation, smuggling, aggressive advertising, and pricing policies. The result is a larger market for tobacco products than existed previously and a corporate management that is better able to oppose public-health efforts at regulation and control. Although cigarette consumption is down in the United States, Canada, and Western Europe, it is rapidly growing in most of the world— especially the so-called third world. The transnational companies have positioned themselves to both fuel and profit from this trend.

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