China Mulls Cigarette Ad Ban As Imperial Tobacco Invests £50m

19 November 2003

The People's Republic of China -- the globe's largest tobacco market -- is likely to implement a nationwide ban on the advertising and promotion of smoking materials as soon as its government ratifies the United Nations' Framework Convention on Tobacco Control.

Following the nation's signing of the convention in New York last week, the move must be endorsed by the annual session of China's legislature, the National People's Congress, which convenes next March. A ban could follow ninety days after ratification.

According to the Shanghai Daily, the Chinese government "fully supports" the convention and the health ministry is negotiating with other government bodies on how best to implement it.

Which, on the face of it, is bad news for British cigarette giant Imperial Tobacco, which on Monday announced a £50 million ($85.15m; €71.40m) investment in the People's Republic.

Excited by the prospect of accessing a proportion of China's 350 million smokers -- around one-third of the global total -- Imperial inked a ten-year agreement with the local Yuxi Hongta group to produce and distribute its West brand of cigarettes in two southern Chinese cities, believed to be Shanghai and Kunming.

Although Imperial minimized the deal's immediate commercial importance, with chief executive Gareth Davis claiming only "modest volumes" of some 500 million cigarettes annually, he described its potential as "huge". Imperial plans to spend about £5m a year on the venture.

Data sourced from: The Washington Post Online and Financial Times; additional content by WARC staff