Marketing cigarettes and tobacco

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INTERNATIONAL MARKETING
2nd Case.

MARKETING CIGARETTES AND TOBACCO
Background
1964: The Surgeon General’s report documented the adverse health effects of smoking.

1951 – 1982: the cigarette tax was 8 cent per pack of twenty cigarettes.

1980:
• The Asian tigers ran huge trade surpluses with the United States.
• The U.S. government was in strong support of the tobacco industry. Itfounded 3 export promotion programs.

1981: Total U.S. cigarette consumption declined by nearly 25% and per capita consumption by 32%.

1983 – 1990: The cigarette tax was raised to 16 cent per pack of twenty cigarettes.

1984: The U.S. annual trade deficit reached a record high of $123 billion. For these reason, the Reagan administration turned to the office of the USTR, a federal agencyunder the executive office of the president.

1985: The Whitehouse filed a complaint with the USTR against Japan.

1986: Japan gave in and allowed imports to U.S. cigarettes.

1990: U.S tobacco manufacturers found new opportunities for expansion.

1992: The USTR negotiated an agreement under which China promised to eliminate tariffs and other barriers on U.S cigarette imports withintwo years.

1996:
• The U.S. tobacco industry produced 754 billion pieces of cigarettes.
• Cigarette exports totaled about 241 billion pieces.

2000: The commodity Credit Corporation made new loans to tobacco farmers of an estimated $395 billion.

2002: The federal cigarette excise tax was raised 5 cents to 39 cents per pack of twenty cigarettes.

2003:
• There were 350 millionsmokers in China.
• The Chinese government collected 191 billion Yuan in cigarette taxes.

2004: Tobacco production and related industries contributed $35 billion to government revenues in excise, sales, personal income and corporative taxes.

2005:
• Tobacco had a farm value of one billion, making in the United states’ sixth largest cash crop.
• U.S. cigarette consumption was less than 380billion cigarettes, accounting for over $80 billion in sales.
• Cigarette production declined to 482 billion pieces.
• Exports fell to $983 million.
• Cigarettes Imports shrank by 7% from the previous year to 653 million pieces.
• U.S. tobacco firms exported to over 100 countries.

Organizations Involved:
• World Health Organization (WHO): The WHO is the directing and coordinatingauthority for health within the United Nations system. It is responsible for providing leadership on global health matters, shaping the health research agenda, setting norms and standards, articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends.

• U.S. Department of agriculture (USDA).

• U.S. Trade Representative (USTR). Theynegotiate directly with foreign governments to create trade agreements, resolve disputes and participate in global trade policy organizations.

• General Agreement on Tariffs and Trade (GATT): The GATT covers international trade in goods.

• R.J Reynolds Company (R.J. Reynolds) they are the second-largest tobacco company in the United States, manufacturing about one of every three cigarettessold in the country

• Philip Morris: is the leading international tobacco company, with products sold in over 160 countries.

• Diplomat: Cigarettes brand name of Ghana.

• High Society: Cigarettes brand name of Nigeria.

• Sportsman: Cigarettes brand name of Kenya.

• Commodity credit Corporation.

• National Bureau of Economic Research. Institution that studies quantitative economictopics.

People involved
• Bill Clinton: served as the forty-second President of the United States from 1993 to 2001. In Clinton administration, the U.S. government discontinued all export promotion programs related to tobacco and tobacco manufacturers.

• George Bush: He is the forty-third and current President of the United States of America. He served as the forty-sixth Governor of...
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