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“We Think Globally”: The Rise of Paraguay’s Tabacalera Del Este as a Threat to Global Tobacco Control

Resource type
Date created
2018-11-19
Authors/Contributors
Abstract
Background Leading transnational tobacco companies (TTCs) began to expand their operations in Latin America in the 1960s. This included legally exporting their cigarettes to Paraguay during the 1960s which, in turn, were illegally re-exported to Argentina and Brazil. By the 1990s, competition between BAT and PMI for this lucrative illicit market, focusing on low-priced brands, prompted manufacturing in Paraguay. Paraguayan manufacturing rapidly grew after the introduction of a new cigarette export tax in Brazil in 1999.Methods We systematically searched Truth Tobacco Industry Documents (TTID) to understand the activities and strategies of leading TTCs in Paraguay and subregion over time. We applied the analytical framework of Lee and Eckhardt (2017) to understand Tabesa’s global business strategy. We searched the websites of TTCs and Tabesa for activities since the mid 2000s to understand how the companies publicly describe these strategies. We used the United Nations Commodity Trade Statistics Database (UN Comtrade) as an independent source to crosscheck statements by Tabesa executives about export markets. We contextualized and triangulated our findings with 42 key informant interviews.Results Tabesa became the largest cigarette manufacturer in Paraguay, and one of the largest companies in the country, through complicity in the illicit trade. Enabled by market conditions created by leading TTCs, and a permissive regulatory environment in Paraguay, evidence suggests Tabesa had become a major source of illicit cigarettes across Latin America and beyond by the late 2000s. Although Brazil continues to account for the bulk of Tabesa’s revenues, findings suggest that the company is aspiring to compete with TTCs in markets worldwide through legal and illegal sales.Conclusion There is a need for fuller understanding of the risks to global tobacco control from local companies aspiring to compete with TTCs. The rise of Tabesa is part of the changing nature of the illicit trade in tobacco products which must be taken into account in implementing the Framework Convention on Tobacco Control (FCTC) and its Protocol to Eliminate Illicit Trade in Tobacco Products. Potential conflicts of interest concerning Tabesa illustrate the importance of FCTC Article 5.3 on industry interference. There is also an urgent need to address the lack of independent and rigorous data on the illicit tobacco trade in the region.
Document
Published as
Gomis, B., Lee, K., Carrillo Botero, N. et al. “We think globally”: the rise of Paraguay’s Tabacalera del Este as a threat to global tobacco control. Global Health 14, 110 (2018). DOI: 10.1186/s12992-018-0412-3.
Publication title
Global Health
Document title
“We Think Globally”: The Rise of Paraguay’s Tabacalera Del Este as a Threat to Global Tobacco Control
Date
2018
Volume
14
Issue
110
Publisher DOI
10.1186/s12992-018-0412-3
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Copyright is held by the author(s).
Scholarly level
Peer reviewed?
Yes
Language
English
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s12992-018-0412-3.pdf 880.82 KB

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