The problem with selling a lethal product: you just can’t get the staff

12 July 2016

Tobacco causes six million deaths a year, and big tobacco was recently described in a British high court judgment as an industry “which facilitates and furthers, quite deliberately, a health epidemic”.

But it’s a great place to work. Just look at the company tweets.

Imperial Tobacco:

imperial tweet

Imperial Brand PLC:

imperial brand plc

British American Tobacco Peru and BAT Central America and Caribbean are “recognised … amongst top employers in LatAm 2016” while BAT South Africa “unlocks leadership potential of their talent”. BAT Mexico has been recognised as the “#One Employer in Mexico in 2016” and BAT West Africa “wins awards foroutstanding employee engagement strategies”.

Meanwhile, at Japan Tobacco International:

jti tweet

And Philip Morris International “actually has proof” that it is one of the best employers around.

So it goes. Great employers doing great things for their employees.

But what do these lethal companies say about their employees when they report on the risks their industry faces? Reports to the United States Securities and Exchange Commission seem to tell a different story about the calibre of people in the tobacco industry.

Altria (Philip Morris USA’s parent company) recently reported that, “Altria Group, Inc. may be unable to attract and retain the best talent due to the impact of decreasing social acceptance of tobacco usage and tobacco control actions … our strategy of attracting and retaining the best talent may be impaired by the impact of decreasing social acceptance of tobacco usage … ”

The Lorillard Tobacco Company reported that, “As a tobacco company, we may experience difficulty in identifying and hiring qualified executives and other personnel in some areas of our business. This difficulty is primarily attributable to the health and social issues associated with the tobacco industry”.

Philip Morris International report “… We may be unable to attract and retain the best global talent”.

Reynolds American report “… Recruiting and retaining qualified personnel may be difficult given the health and social issues associated with the tobacco industry”.

And it affects the bottom line.According to Lorillard, these risks “could have a material adverse effect on our results of operations and financial condition”, or, as RJ Reynoldsput it, “could have an adverse effect on the results of operations cash flows and financial position of these companies”.

These concerns are of course global. The UK-based British American Tobacco reported in 2015 to its shareholders that, “the Board has considered the risks associated with the inability to recruit required talent and the loss of existing talent. The impact of the risks has increased to reflect the challenge posed by negative perceptions of the sustainability and corporate reputation of a tobacco business and is now listed as a principal risk facing the business.”

The evidence that smoking kills has been overwhelming since 1950. It is understandable that tobacco company leaders were slow to accept the magnitude of the problem. But six decades on, any executives working for tobacco companies have come into this industry knowing that they are selling and promoting a product that is lethal when used precisely as intended.

Even the once-supportive alcohol industry wants to distance itself from big tobacco. According to the UK Scotch Whisky Association’s chief executive, David Frost, “there is a fundamental difference between tobacco and alcohol, which is that alcohol, when consumed responsibly and in moderation, can be part of a normal healthy lifestyle”, while the sales director for Australia’s Carlton United Breweries, Peter Filipovic put it even more starkly: “Tobacco kills you when you use tobacco as it is intended and beer doesn’t”.

Small wonder that, as Philip Morris delicately note, “We tend to reward our employees more than other companies do”.

Small wonder that the industry’s leaders stay out of the spotlight, and are reduced to deceitful PR, lobbying, political donations, legal threats and processes and working through front groups.

Small wonder, too, that tobacco companies are finding new names – Philip Morris changed to Altria, Imperial Tobacco is now Imperial Brands, while British American Tobacco has established“consumer healthcare” and “consumer focused” companies under the names of Nicoventures and Nicovations.

Money still talks, and the tobacco companies have a lot of it. But the global campaign to reduce tobacco’s massive death toll is gaining momentum, and the industry is losing crucial battles in both the law courts and the court of public opinion.

It must be good news that fewer than ever executives with good intellects and decent values want to sell their souls for the glistening salary packages at big tobacco – and that those who work for big tobacco know their own employers worry that they are second-rate.

Maybe the recruitment tweets should read, “we know you’re not very good, but we’re getting desperate”.