When Critics Multiply, Tobacco Manufacturer/ Smuggler JTI Joins Them

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September 20, 2012

On Monday, the European parliament held a public hearing to discuss the financial consequences of cigarette smuggling. The practice has boomed during the economic crisis, and now costs EU member nations more than $10 billion per year in lost tax revenues, according to a June 2011 report by the European Commission.

So Parliament's hearing made plenty of sense. What didn't was its choice of speakers. When Stephen Payne from Japan Tobacco International took the floor to explain how smuggling damages the industry, he likely didn't mention the attention his company has received for allegedly engaging in its own black market operation.

Japan Tobacco International (JTI), the world's third largest tobacco company and owner of the Winston, Camel and Benson & Hedges brands, was found by its own investigators to have covered up evidence of illegal shipments in the tens of millions in 2009 and 2010. OCCRP made those findings public in November of 2011 in a report that included internal JTI documents provided by sourcees close to the company.

This year the European Commission's Anti-Fraud Office (OLAF) launched a probe into the company after a report it had shipped cigarettes to Syria despite EU sanctions.

So it's a bit ironic that JTI took the EU's hearing as an opportunity to slam the illegal tobacco trade. Then again, maybe they're just miffed about the boom in competition.