China ups its tobacco monopoly

Jocelyn Ford May 31, 2006


SCOTT JAGOW: Today is World No Tobacco day. While smoking’s on the decline in the U.S., China is still puffing away madly. But as Jocelyn Ford reports, that doesn’t mean foreign tobacco companies are making a fortune there.

JOCELYN FORD: China is home to about one out of three smokers worldwide, but it’s been a tough market for multinationals. They account for only three percent of cigarettes sold here.

That’s not because the government is eager to protect its citizens from the hazards of smoking. It’s because China is eager to protect its own tobacco industry which is a state monopoly.

China’s tobacco industry accounts for about 10 percent of total government revenue. Anti-monopoly researcher Zhou Yangming.

[ Zhou Yangming commenting in Chinese ]

Zhou says in some places the local authorities require government institutions to buy local cigarettes, for example for entertaining visitors.

China announced earlier this year it won’t allow foreign companies to build new cigarette factories or enter joint ventures.

In Beijing, I’m Jocelyn Ford for Marketplace.

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