Africa: Disguising BAT’s involvement in cigarette smuggling
Letters discovered in BAT’s archives in Guildford, England, are some of the most explicit pieces of evidence of the company’s involvement in cigarette smuggling, in this case in central Africa.
In March 1988, BAT (U.K. & Export) director R. Howe spent three days in Cannes, France, visiting Marcel Binst at his Villa Magali. It was, as Howe later phrased it in a letter to Binst, an "enjoyable and productive" time. Binst was the aging but wealthy co-owner of a large wholesale distribution company called Sorepex NV, which specialized in selling goods into Africa. BATUKE had enjoyed a lengthy and highly successful relationship with Sorepex and now wanted to take a more active role in the distribution of its own products. This was fine with Binst. He was old and wanted to withdraw from active participation in Sorepex's complex business affairs. The visit was spent primarily hammering out an agreement whereby Sorepex would continue to act as BAT's wholesaler/middleman in central Africa but would allow BAT to begin managing its distribution channels. As Howe phrased it in a letter of intent to Binst, dated April 28, 1988, "Our objective now is to preserve the 'facade' that Sorepex represents between us and the sensitive markets of Togo, Benin, Niger (Unit I), and Equatorial Africa (Unit II) but at the same time, enable the BAT field force to take over the management of this important business."
That important business included smuggling. The letter, found in BAT archives in Guildford, England, one of two corporate document depositories created under a U.S. court order that settled health litigations in the United States, is one of the most explicit examples of a major cigarette manufacturer's intention to use a front man to distance itself from smuggling while at the same time managing the smuggling. Previous correspondence between BAT and Sorepex is equally graphic about smuggling and indicates a longstanding relationship. In February 1987, Michel Chevaly of Sorepex wrote to BAT about sales into Cameroon. "First, Bogno will buy loads of 300 cartons: That's the capacity of his truck given the fact that there is other merchandise which will hide the cigarettes." On July 1, 1987, at a meeting at BATUKE headquarters outside London, BATUKE and Sorepex executives discussed Africa sales and had this to say about smuggling into Nigeria: "Discussion was held concerning direct imports to Nigeria through Mr. Adji who . . . would disguise the cigarette importation by calling the shipment something else, e.g. matches." In 1990, BAT claimed its brands dominated in Cameroon, where "there are no legal imports." For this reason, they could not advertise. However, the company dodged the problem by financing a "major campaign on the Africa No 1 Radio programs transmitted from Gabon. . . . This station has a high audience in Cameroon and is used by all major competitors including local manufacturers."
Even BAT chairman Sir Patrick Sheehy was brought into the picture on Africa sales and condoned and encouraged it, according to the documents. A Nov. 1, 1991, memo describes a meeting with Sheehy and a discussion about a so-called umbrella agreement, a system by which a manufacturer uses a small legal market as a cover for massive advertising of cigarettes it is selling primarily on the black market. "When the issue of Unit II [Equatorial Africa] was discussed where BATUKE wish to appoint a domestic importer enabling us to provide cover for advertising and GT business, Sir Patrick felt that it was perfectly acceptable for BAT Cameroon to recommend a domestic importer for BHS." GT is one of the company euphemisms for smuggling. The same memo also discusses various business assumptions for Equatorial Africa. One claims that "GT movements to this end market will remain a priority throughout the period." It then goes on to describe "Scenario 1: No official imports." Under this title it states that the "import of BHSF [Benson & Hedges Special Filter] legally is not an available option." Scenario Two is titled: "Legal imports is feasible" [sic]. In this section, however, BAT states that "GT shipments will remain the mainstay of our activity."
Another memo dated 1990 talks about how it is "practically impossible to develop a pure GT brand" without having some sort of legal base in the target country, in this case Nigeria. "It would therefore seem logical to import 'legally' some quantity, allowing also for an advertising campaign." Yet another 1990 BAT memo delineates the difference between General Trade and legal markets. "The objective would be to legalise 'profitable' imports thus providing the Nigerian Government with revenue currently lost by the proliferation of GT. At the same time, it could limit the scope of further articles in the international press on the lines of the Sunday Times Insight feature." The memo referred to two articles in the Sunday Times published May 13 and May 20, 1990, describing how BAT had orchestrated a campaign to sell cheap, high tar and nicotine cigarettes in Africa. Apparently BAT was concerned that the "scope" of future articles might widen to include smuggling.