Big Profits for Bitter Harvest of Disease and Death
China’s state-run tobacco company profits may outpace Wal-Mart, HSBC
Posted by: Editor | Mar 27, 2012
The global tobacco industry has long put profits before public health. Now China National Tobacco Corporation has taken this cynical formula to a new level: It appears to be the world's 30th largest company by sales, with profits that may rival those of the giant retailer Wal-Mart and the international financial conglomerate HSBC.
A rare release of the company's financial data, made public as part of the tobacco giant’s effort to acquire a stake in another corporation, allowed Bloomberg News to assess just how much money the state-owned company rakes in by selling tobacco in the world’s most populous nation. Bloomberg found that China National Tobacco Corporation’s profits in fiscal year 2010 were $18.7 billion. That's more than the 2011 profits for Wal-Mart ($15.7 billion) and HSBC ($16.8 billion).
Based on the 2010 figures, Bloomberg estimated that China National Tobacco Corporation is the world's 18th largest company by profit — ranking just behind financial giant JPMorgan Chase.
China is the world’s largest producer and consumer of tobacco, and China National Tobacco Corporation, the government monopoly, holds 98 percent of the Chinese market. As both owner and regulator of the tobacco industry, the Chinese government plays conflicting roles. As a result, the Chinese government has been slow in implementing tobacco control measures.
About one million Chinese smokers die each year from tobacco-caused diseases, and 100,000 people die each year from exposure to secondhand smoke. If current trends continue, China's death toll from tobacco will climb to 2 million a year by 2020.
Besides addicting and killing its own people, China National Tobacco Corporation increasingly is exporting its deadly products: Exports leaped by nearly 22 percent between 2009 and 2010.
The Chinese government must fulfill its obligation under the Framework Convention on Tobacco Control to protect public health policies from the vested interest of the tobacco industry.