Problems
China National Tobacco faces a number of serious problems: namely, the counterfeiting of premium and foreign cigarettes, as well as a growing public awareness of the health risks inherent in smoking. The counterfeiting problem has grown to the extent that many customers, who would otherwise buy premium cigarettes, now purchase mid-range products to avoid "junk" counterfeits so pervasive in premium brands.
Advertising in print, radio, and television has been banned in China, and even outdoor ads require prior approval provided they are not in one of nearly 100 local jurisdictions where outdoor tobacco ads are banned. These restrictions have forced China National into a strategy that harkens back to the 60's and 70's in the United States; with "cigarette girls", attractive women dressed in brand logos, handing out samples, lighters, and promotional material in front of clubs and bars. Another form of circumvention is printing outdoor advertisements in the name of another entity, the latter's name being clearly printed on the material. For example, the Hongtashan brand mentioned above has recently published their new climbing-themed advertisements through a Hongtashan Climbing Club.
China National can also look forward to an anti-smoking lobby that is currently small but growing. In recent years, legislation from politicians have increased, banning smoking in many enclosed public areas. The press in China has not been silent either; numerous editorials criticizing smoking on everything from health to pollution have become more and more common place.
China National and more specifically the STMA also deal with constant attack from the World Trade Organization to loosen their monopoly. Rather than loosen it however the STMA has taken steps, in the name of anti-counterfeiting, to strengthen the monopoly. However, since 2001 increasing access has been granted to foreign companies. Yet this access is still fairly limited and does not show signs of further liberalization in the near future.
Read more about this topic: China National Tobacco Corp
Famous quotes containing the word problems:
“If combat means living in a ditch, females have biological problems staying in a ditch for 30 days because they get infections.... Males are biologically driven to go out and hunt giraffes.”
—Newt Gingrich (b. 1943)
“The man who is forever disturbed about the condition of humanity either has no problems of his own or has refused to face them.”
—Henry Miller (1891–1980)
“We are all adult learners. Most of us have learned a good deal more out of school than in it. We have learned from our families, our work, our friends. We have learned from problems resolved and tasks achieved but also from mistakes confronted and illusions unmasked. . . . Some of what we have learned is trivial: some has changed our lives forever.”
—Laurent A. Daloz (20th century)