[lbo-talk] Re: socially irresponsible investment

John Bizwas bizwas at lycos.com
Wed Apr 13 22:51:32 PDT 2005



>> My question would be whose tobacco are they smoking not who owns the brand per se.Travis

For the major brands, it's the same thing: JT and BAT. They will invest in the local and regional producers and distributors if there are profits in doing so and it helps them control their profitable brands. For example, one of the best ways to advertise a brand of cigarettes is the sign at the top of the vending machine placed on the corner or in the lobby of a hotel in Tokyo or Seoul or Taipei.

Controlling a brand is the key to extracting profits. For example, Marlboro's might be made of the same ingredients as a brand without the American image of Marlboro (they might even be made in the same local, regional or global-exporting factory in the US, China or Indonesia), but the less successfully branded cigarette would sell for 25-30 cents less a pack. A small fraction of that 25-30 cents per pack goes to advertising to maintain the Marlboro image and to keep the actual producers and distributors happy, and the rest goes into the pocket of the successful nicotine capitalists who invested into the global company that owns the brand.

I'm over my limit, so see you all tomorrow.

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