BAT invests $11.90million in Mali to increase Dunhill production in West Africa
Reuters news agency reported on Saturday that British American Tobacco (BAT) has signed a $11.90 million deal with Malian state tobacco company, SONATAM for the production and distribution of BAT’s Dunhill in West Africa.
This deal which is expected to be completed by 2020 will be used by SONATAM to upgrade its production facilities. It is also set to create about 600 jobs including 200 permanent appointments. This announcement comes about four months after its bribery scandal in East Africa.
BAT controversies in Africa
According to reports, BAT is latching on the gullibility and weakness of African governments. It has created sneaky and illegal policies to outsmart restrictive laws, keeping Africa as one of its most lucrative markets while endangering millions of lives. According to Euromonitor data, BAT has the largest share of cigarette sales in the Middle East and Africa. According to Financial times, it flagged a number of African countries as offering “further opportunities” for sales growth.
Late last year, a BBC investigation uncovered evidence of bribery at British American Tobacco. BAT was accused for bribery scandal in Kenya and Uganda. This was made known by Paul Hopkins who worked for the BAT in Kenya for 13 years and claims to have facilitated bribes for several individuals. In order to prove this, he released emails to Panorama showing the company’s involvement in these deals, which detail him being told that paying bribes was the cost of doing business in Africa. The stock of the company fell 0.8 percent after the BBC website published a first version of the report.
In 2008, the company was the subject of a BBC documentary, in which Duncan Bannatyne investigated the marketing practices of the company in Africa and specifically the way the company targets younger Africans with branded music events, competitions and the sale of single cigarette sticks. Many of the practices uncovered were not in line with BAT’s own code of conduct and company standards. Bannatyne also interviewed Dr Chris Proctor, Head of Science and Regulation, who admitted that advertisements targeting children from three African countries were ‘disappointing’.
In 2007 the Nigerian government alleged that BAT marketing and advert campaigns were targeting the youth amongst other things. Several states in the country followed suit, taking legal action and seeking payment for future damages in anticipation of tobacco related diseases.
What you didn’t know about SONATAM
The National Tobacco and Matches Company of Mali (SONATAM) is the exclusive importer and manufacturer of cigarettes in Mali for a market estimated at 2300 Mu / year. SONATAM imports cigarettes such as the British American Tobacco (BAT) Dunhill. It also imports the Imperial Tobacco Group cigarettes (ITG), and Davidoff Classic Davidoff Lights.
SONATAM was founded in 1965. In 1990, it achieved a profit of over a billion CFA francs with a turnover of over 15 billion and it employed 8000 workers. In 2000, it then sold 35 percent stake in the company to LAAICIO and was also privatized in 2002. It is worthy to note that since its privatization the company has been experiencing difficulty. The ownership structure of the company is as follows: Malian State: 35 percent, Private Malians: 14 percent, LAAICO: 25 percent and Coralma International (TGI): 25.5 percent.
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