Kenya Insights

Tag: British American Tobacco (BAT)

  • How British American Tobacco Blackmailed Kenyan Government To Weaken Health Warnings On Nicotine Pouches

    How British American Tobacco Blackmailed Kenyan Government To Weaken Health Warnings On Nicotine Pouches

    An investigation by The Guardian has uncovered British American Tobacco (BAT) pressured Kenya to reduce health warnings on Lyft nicotine pouches, threatening investment withdrawal. BAT threatened it would pull investment from a Nairobi factory if its request for smaller labelling was not met.

    Letters between British American Tobacco (BAT) and the Ministry of Health show the government yielded to the tobacco giant’s demand to sell Velo – one of the biggest-selling nicotine pouch brands globally – with significantly smaller health warnings and without mentioning potentially cancer-causing toxicants present in the products.

    The letters are among documents shared with the Guardian and Africa Uncensored, and obtained by the investigative news outlet the Examination, which reveal the industry’s influence over policy in the east African country.

    Existing tobacco regulations in Kenya stipulate that such labels must cover a third of the package and include information about the health hazards of the product. BAT lobbied to reduce the size of the warning, the letters show. The Ministry of Health agreed that Velo could be sold with a small warning saying: “This product contains nicotine and is addictive.”

    In the UK, warning labels also inform consumers that nicotine pouches are “not risk-free” because they contain traces of tobacco-specific nitrosamines (TSNAs), cancer-causing compounds that are also present in cigarettes.

    Velo pouches have gained global popularity, including among Kenya’s youth. TikTok videos of young Kenyans using Velo have amassed millions of views, and academic research shows the product being is sold in schools.

    A draft report by a government taskforce, which was then leaked to the Examination, accuses tobacco companies of targeting young people. Fearing a new generation will become addicted to nicotine and that the pouches could be a gateway to smoking, the taskforce is calling for strict regulation of the products. Other politicians are demanding an outright ban.

    The revelations about BAT’s role in shaping health warnings in Kenya come amid an industry-wide drive to sell more “smoke-free” – yet still addictive – nicotine products across the globe.

    The global market for nicotine pouches, one of many “smoke-free” products, was $3bn (£2.36bn) in 2021. BAT views Kenya as one of its key “test markets” in low and middle-income countries, according to its financial presentations, and plans to make the country its base of operations for a rollout of the product across southern and eastern Africa.

    However, it isn’t clear how nicotine pouches affect human health over the long term.

    In September 2021, BAT’s managing director wrote to the Kenyan health ministry asking for permission for Lyft (as Velo was called when it first entered the market) to be sold with a warning covering just 10% of the pack. It said the “resumption of factory operations” hinged on this smaller warning being approved. “Your positive consideration of this request will allow us to operationalise our factory,” the letter said. The Ministry of Health agreed to allow warnings covering 15% of the front of the pack.

    A successful lobbying campaign

    BAT first launched its nicotine pouches into the Kenyan market in 2019.

    The company obtained its licence to sell the products through Kenya’s Pharmacy and Poisons Board, a health ministry department that regulates drugs and medicines. Under that licence, the pouches, then sold under the brand name Lyft, were only to be sold in drug stores.

    But BAT and its vendors sold the pouches online and in shops. They advertised the pouches through social media influencers and giveaways at universities. Their popularity soared with young people, including children.

    A Kenyan DJ and a TV presenter were among the influencers hosted by BAT at the 2019 Formula One Grand Prix in Abu Dhabi, as part of the company’s sponsorship of the McLaren F1 team. BAT paid the social media team to post hashtags such as #GetLyfted, #LyftxMcLaren and #LyftKenya to followers.

    In September 2020, the Kenyan health ministry wrote to the Pharmacy and Poisons Board challenging its decision to license Lyft, which it said was also being sold in vending machines, in violation of the law. BAT said it has never sold its products in vending machines.

    The ministry asked for a comprehensive report on the circumstances that led to the Pharmacy and Poisons Board granting BAT a licence to sell its pouches in the first place. The Pharmacy and Poisons Board wrote to BAT Kenya in October 2020, saying Lyft should be sold only by pharmacies and must be withdrawn from retail stores and online marketplaces. It said the product must not be advertised.

    In response, BAT temporarily suspended Lyft sales. It told investors it would “continue to engage with the local authorities”.

    In January 2021, the health ministry wrote to BAT saying the pouches would now be subject to Kenya’s existing tobacco regulations, which require health warnings that cover about a third of the front of the packaging and half of the back. Before BAT suspended sales of Lyft they were being sold with significantly smaller warnings.

    “This is when heavy lobbying now started, letters were written and many meetings held in Afya House [the headquarters for the Kenyan health ministry],” a government public health official told the Examination on condition of anonymity.

    The key breakthrough came for BAT shortly after it wrote to the health ministry in September 2021 and threatened to pull investment from a new nicotine pouch factory it had pledged to build in Nairobi, which would serve east and south Africa.

    In the letter, Crispin Achola, BAT Kenya’s managing director, told the cabinet health secretary Mutahi Kagwe that “our resumption of factory operations and the sale of Lyft in Kenya hinges on the provision of appropriate text health warnings”.

    Achola drew Kagwe’s attention to a subclause in Kenya’s Tobacco Control Act of 2007 that allows the cabinet secretary discretion to alter the health warnings on products via a special directive.

    Initially, BAT had pledged more than $15m to build a new factory for the nicotine pouches.

    Velo, nicotine pouches.

    Less than a month after BAT made its threat about the investment, Kagwe permitted BAT to cut the size of the health warnings on the nicotine pouch packaging in half and said the only health warning it had to include was the words: “This product contains nicotine and is addictive”, with no mention of the presence of the cancer-causing toxicants.

    As a result, the products were given the green light to re-enter the Kenyan market in June 2022. This is when the pouches, rebranded to Velo, flooded back.

    BAT was given special dispensation to sell nicotine pouches without standard-sized health warnings until July 2023. After that permission expired, the tobacco giant wrote to the health ministry in August asking for an indefinite exemption, “pending the development of specific regulations on this product and related categories”.

    The health ministry has not yet responded to BAT. Velo is still on sale although there are shortages in shops. In October and November 2023, multiple shipments of nicotine pouches were impounded at Jomo Kenyatta International Airport. It is unclear why but in total, almost 20 tonnes of the product have been seized.

    BAT Corruption Allegations

    In a different scenario but similar hands, allegations of top level bribery, use of questionable dealings to market illness-causing tobacco-related illness, death and economic harm across Africa, the Cigarette maker has been accused of using financial inducements to undermine tobacco control efforts in Africa.

    According to global tobacco industry watchdog, STOP, BAT gave cash (per diems, campaign donations) and cars to dozens of politicians, civil servants, journalists as well as people working at competitor companies to help influence and secure health policies that favour their business activities in key African countries.

    Two new analyses of whistleblower documents and court records by the Tobacco Control Research Group at the University of Bath and published by STOP, suggest that BAT allegedly used payments to dozens of individuals and potentially unlawful surveillance to tighten its market grip on Africa.

    The reports—one on the company’s activities in several East and Central African countries, another on its aggressive tactics in South Africa — reveal that BAT appeared to be operating “as if it were above the law,” according to the report on South Africa, to sell cigarettes — products known to cause tobacco-related illness, death and economic harm — across the region.

    The whistleblower documents connected to BAT’s questionable dealings in East and Central Africa revealed evidence of payments made in Kenya, Tanzania, Uganda, Rwanda, Burundi, Sudan, Comoros, DR Congo, Malawi and Zambia. Researchers identified 236 payments made between 2008 and 2013 totalling $601,502 allegedly used to influence policy and sabotage competitors.

    The researchers categorised payments into two: Those “raising questions under the United Kingdom Bribery Act (UKBA)” and another less serious but still suspicious group of payments “warranting further investigation under UKBA.”

    The payments included more than $28,500 to sources within the Kenya Revenue Authority and more than $38,500 to a minister in Kenya, allegedly in exchange for intelligence and to the award of a tender to offer tracking services.

    Corporate espionage

    In Kenya, roughly $56,000 was paid to a private contractor, allegedly to covertly establish a trade union and orchestrate labour unrest at a competitor, Mastermind Tobacco Kenya. The effort was dubbed “Operation Snake.”

    In Uganda, the investigators say some $20,000 was found to have been sent to the chair of a Ugandan parliamentary committee to allegedly “amend” a report related to an investigation into Continental Tobacco Uganda.

    Another $110,000 was found to have been paid to an executive of Leaf Tobacco and Commodities Ltd of Uganda, allegedly in exchange for evidence of potentially illegal activities by the firm. A document of the proposal appears to include an offer to arrange an “immunity from prosecution agreement.”

    Documents show BAT often routed the payments through third-party companies referred to as “service providers.”

    They also show that BAT staff in London appear to have been involved in requesting and authorising payments, processing invoices and approving service-provider contracts.

    In another case, an employee of a Kenyan PR agency working for British American Tobacco (BAT) offered a bribe to a journalist to leak details of the Bureau’s investigation into how the company has targeted young non-smokers.

    Edwin Okoth was investigating BAT’s activities in Kenya on behalf of the Bureau when last monthhe was offered a bribe by an Engage employee in exchange for details of the investigation.

    In text messages, the employee asked Okoth, “what is your price?” for leaking the information and subsequently confirmed he was “serious”. They went on to say that the offer was part of a “media intelligence” gathering operation that would help them “manage the client”, meaning BAT.

    Just days earlier the UK’s Serious Fraud Office had announced that it was closing an investigation launched in 2017 over allegations BAT had bribed officials in Kenya. It said there was insufficient evidence to bring a prosecution.

    Additional reporting by he Guardian

  • Whistleblower Report Reveals How BAT Has Been Corruptly Influencing To Undermine Tobacco Control Efforts

    Whistleblower Report Reveals How BAT Has Been Corruptly Influencing To Undermine Tobacco Control Efforts

    Summary

    • Watchdog says BAT gave cash and cars to dozens of politicians, civil servants, journalists as well as people working at competitor companies to help influence and secure health policies that favour their business activities in key African countries.
    • The whistleblower documents connected to BAT’s questionable dealings in East and Central Africa revealed evidence of payments made in Kenya, Tanzania, Uganda, Rwanda, Burundi, Sudan, Comoros, DR Congo, Malawi and Zambia.

    Allegations of top level bribery, use of questionable dealings to market illness-causing tobacco-related illness, death and economic harm across Africa

    Cigarette maker British American Tobacco (BAT) is being accused of using financial inducements to undermine tobacco control efforts in Africa.

    According to global tobacco industry watchdog, STOP, BAT gave cash (per diems, campaign donations) and cars to dozens of politicians, civil servants, journalists as well as people working at competitor companies to help influence and secure health policies that favour their business activities in key African countries.

    Two new analyses of whistleblower documents and court records by the Tobacco Control Research Group at the University of Bath and published by STOP, suggest that BAT allegedly used payments to dozens of individuals and potentially unlawful surveillance to tighten its market grip on Africa.

    The reports—one on the company’s activities in several East and Central African countries, another on its aggressive tactics in South Africa — reveal that BAT appeared to be operating “as if it were above the law,” according to the report on South Africa, to sell cigarettes — products known to cause tobacco-related illness, death and economic harm — across the region.

    The whistleblower documents connected to BAT’s questionable dealings in East and Central Africa revealed evidence of payments made in Kenya, Tanzania, Uganda, Rwanda, Burundi, Sudan, Comoros, DR Congo, Malawi and Zambia. Researchers identified 236 payments made between 2008 and 2013 totalling $601,502 allegedly used to influence policy and sabotage competitors.

    The researchers categorised payments into two: Those “raising questions under the United Kingdom Bribery Act (UKBA)” and another less serious but still suspicious group of payments “warranting further investigation under UKBA.”

    The payments included more than $28,500 to sources within the Kenya Revenue Authority and more than $38,500 to a minister in Kenya, allegedly in exchange for intelligence and to the award of a tender to offer tracking services.

    Corporate espionage

    In Kenya, roughly $56,000 was paid to a private contractor, allegedly to covertly establish a trade union and orchestrate labour unrest at a competitor, Mastermind Tobacco Kenya. The effort was dubbed “Operation Snake.”

    In Uganda, the investigators say some $20,000 was found to have been sent to the chair of a Ugandan parliamentary committee to allegedly “amend” a report related to an investigation into Continental Tobacco Uganda.

    Another $110,000 was found to have been paid to an executive of Leaf Tobacco and Commodities Ltd of Uganda, allegedly in exchange for evidence of potentially illegal activities by the firm. A document of the proposal appears to include an offer to arrange an “immunity from prosecution agreement.”

    Documents show BAT often routed the payments through third-party companies referred to as “service providers.”

    They also show that BAT staff in London appear to have been involved in requesting and authorising payments, processing invoices and approving service-provider contracts.

    Some employees seemed to know they were involved in questionable activities as they used aliases and private email accounts when communicating.

    Investigations on BAT in South Africa found that BAT oversaw two networks of paid informants that operated under the guise of anti-illicit trade monitoring, but the researchers say their analysis suggests the strategy was anti-competitive, not anti-smuggling, with a goal of disrupting the illegal and legal operations of its competitors.

    BAT appears to have influenced state agency activities, including law enforcement, to help it carry out its espionage.

    While BAT gained access to state agencies, ostensibly to help fight illicit trade, and issued public statements to say that it supported government efforts to eradicate the problem, BAT cigarettes produced in South Africa were allegedly being smuggled into West Africa, fuelling conflict, organised crime and political instability.

    “The involvement of head office staff and executives in activities highlighted in these reports raises questions about its business practices beyond Africa,” said Director of Tobacco Control at The Union, a partner in STOP, Gan Quan.

  • How British American Tobacco Conducted Extensive And Potentially Illegal Activity To Undermine Health Policy, Sabotage Competitors And Secure Profits In Kenya And Africa

    How British American Tobacco Conducted Extensive And Potentially Illegal Activity To Undermine Health Policy, Sabotage Competitors And Secure Profits In Kenya And Africa

    Contributor,

    New York, USA, Sept 15  – Two new analyses of whistleblower documents and court records by the Tobacco Control Research Group at the University of Bath and published by STOP, a global tobacco industry watchdog, suggest that British American Tobacco PLC (BAT) allegedly used payments to dozens of individuals and potentially unlawful surveillance to tighten its already crushing market grip on Africa.

    The reports—one on the company’s activities in several East and Central African countries, another on its aggressive tactics in South Africa—reveal that BAT appeared to be operating “as if it were above the law,” according to the report on South Africa, to sell cigarettes to Africans—products known to cause tobacco-related illness, death and economic harm—across the region.

    Evidence appears to connect BAT to hand-delivered cash, cars, per diems and campaign donations to dozens of politicians, civil servants, journalists as well as people working at competitor companies.

    The payments may have helped secure influence on health policies in key African countries. Documents also provide evidence that suggests, in South Africa, BAT hired private contractors, under the pretense of anti-smuggling efforts, to carry out military-style surveillance and operations to disrupt its competitors.

    Commenting on the reports’ findings, Akinbode Oluwafemi, President of the African Tobacco Control Alliance, said: “BAT’s behavior is a reminder of the tobacco industry’s deep colonialist roots, showing contempt for African laws, business and trade and the health and well-being of Africans. Then and now, the tobacco industry seeks to exploit Africans for its own profit with no consideration for the harm it causes.”

    “Our analysis shows that BAT’s potentially corrupt practices in Africa were not just the work of a few bad apples,” said Andrew Rowell, Senior Researcher, Tobacco Control Research Group at the University of Bath, a partner in STOP.

    “The geographic spread of the activity, the infrastructure used and the number of senior staff involved suggest that BAT’s payments were routine, with the evidence trail frequently leading back to BAT’s London headquarters. This is not the kind of company any government should leave unregulated or fail to investigate.”

    “Buying Influence and Advantage in Africa: An Analysis of British American Tobacco’s Questionable Payments” is based on leaked documents—including internal emails and invoices—and court affidavits from two former employees-turned-whistleblowers. It details BAT’s activities between 2008 and 2013 across 10 Central and East African countries. ““British American Tobacco in South Africa: Any Means Necessary” is based on leaked company documents, whistleblower testimony and court documents from litigation in South Africa.

    Buying Influence and Advantage in Africa: Evidence from 10 Countries;

    In January 2021 the U.K. Serious Fraud Office (SFO) concluded its five-year investigation into alleged bribery by the company and its employees, citing that there was not enough evidence to support prosecution as defined under the U.K. Code for Crown Prosecutors, while further stating that: “The SFO will continue to offer assistance to the ongoing investigations of other law enforcement partners.”

    Analysis of whistleblower documents connected to BAT’s work in East and Central Africa revealed evidence of questionable payments made in Burundi, Comoros, the Democratic Republic of Congo, Kenya, Malawi, Rwanda, Sudan, Tanzania, Uganda and Zambia. Researchers identified 236 payments made between 2008 and 2013 totaling US $601,502 that were allegedly used to try to influence policy and sabotage competitors.

    Researchers categorized payments into two categories: those “raising questions under the United Kingdom Bribery Act (UKBA)” and another less serious but still suspicious group of payments “warranting further investigation under the UKBA.”

    The payments included:

    • More than $28,500 to sources within the Kenya Revenue Authority and more than $38,500 to a former Justice Minister, allegedly in exchange for intelligence and for assistance with BAT’s efforts to prevent SICPA from winning the tender over Codentify.
    • $20,000 to the chair of a Ugandan parliamentary committee to allegedly “amend” a report related to an investigation into Continental Tobacco Uganda.
    • An offer of $110,000 to an executive of Leaf Tobacco and Commodities Ltd. of Uganda, allegedly in exchange for evidence of potentially illegal activities by the company. A document detailing the proposal appears to include an offer to arrange an “immunity from prosecution agreement.”
    • Roughly $56,000 to a private contractor, allegedly to covertly establish a trade union and orchestrate labor unrest at a competitor, Mastermind Tobacco Kenya. The effort was dubbed “Operation Snake.”
    • Support for “Operation Deep Jungle,” allegedly to establish a permanent informant at a rival company, Japan Tobacco International.

    The documents suggest that BAT often routed payments through third-party companies referred to as “service providers.” They also show that BAT staff in London appear to have been involved in requesting and authorizing payments, processing invoices and approving service-provider contracts. Some employees seemed to know they were involved in questionable activities as they used aliases and private email accounts when communicating.

    –BAT in South Africa: Crossing the Line and Covering its Tracks–

    Analysis finds that to solidify BAT’s tobacco monopoly in South Africa, BAT and a private contractor may have repeatedly crossed the line of legality to undermine competitors and disrupt operations. It further alleges that:

    • BAT oversaw two networks of paid informants that operated under the guise of anti-illicit trade monitoring. Analysis suggests the strategy was anti-competitive, not anti-smuggling, with a goal of disrupting the illegal and legal operations of BAT South Africa (BATSA)’s competitors.
    • BAT appeared to try to distance itself by hiring a private contractor to run its disruption campaign, and both tried to cover their tracks by paying informants via shell companies and untraceable Travelex cash cards. The informant operations were approved at BAT’s head office and run by London-based operatives.
    • BAT appears to have influenced the activities of state agencies (“state capture”), including law enforcement, to help it carry out its espionage.

    –Working with state agencies while allegedly complicit in smuggling–

    While BAT gained access to state agencies, ostensibly to help fight illicit trade, and issued public statements to say that it supported government efforts to eradicate the problem, BAT cigarettes produced in South Africa were allegedly being smuggled into West Africa, fueling conflict, organized crime and political instability.

    “BAT operates in more than 170 countries and the involvement of head office staff and executives in the activities highlighted in these reports raises questions about its business practices beyond Africa,” said Gan Quan, Director of Tobacco Control at The Union, a partner in STOP.

    “We urge anyone with information about potentially illegal activities to come forward and for regulators to take a hard look at this company and how it behaves. Governments and consumers have every reason to be suspicious.”