British American Tobacco fined $110 million in Nigeria

British American Tobacco Nigeria (BATN) has been fined a record amount for abuse of a dominant position and health regulation violations. However, an agreement has been reached with competition authorities, in which the tobacco company is required to demonstrate good conduct and implement corporate social responsibility actions.

Alerted to various violations, the Federal Competition and Consumer Protection Commission (FCCPC) of Nigeria opened an investigation against British American Tobacco Nigeria (BATN) and its subsidiaries on August 28, 2020. This resulted in a series of searches on January 25, 2021, at the premises of its companies, during which numerous paper and electronic documents were seized.

Analysis of these documents, together with the affidavits of BATN executives and other evidence, allowed the FCCPC to confirm numerous violations of competition and health regulations. The facts alleged included abuse of a dominant position, obstruction of competition, pressure on retailers, placing products on the market outside the regulatory framework, and other violations of tobacco product regulations.[1].

A record fine and several restrictive measures

This extensive investigation led to a settlement between BATN and the FCCPC, under the FCCPC’s Cooperation and Assistance Rules and Procedures (CARP). The settlement reduced BATN’s fine to $110 million (€99 million), which is still the largest fine ever imposed by the FCCPC.[2].

BATN now has 24 months to comply with the trade regulations. The tobacco company is also required to commit to public health and support anti-smoking campaigns as part of its corporate social responsibility (CSR) activities. A written commitment to comply with these provisions and the regulations in force has also allowed BATN’s directors and one of its employees to escape criminal sanctions for obstructing investigations and failing to cooperate during the investigation. Nigerian authorities say they hope the fine and sanctions will act as a deterrent to other companies attempting to circumvent Nigeria’s consumer protection regulations.[3].

An agreement not in accordance with the country's obligations

The very existence of an agreement between the FCCPC and BATN is, however, considered a violation of the country's obligations with regard to its commitments under the WHO treaty, the Framework Convention on Tobacco Control (FCTC), ratified by Nigeria in 2005. Indeed, this text and its implementing guidelines, in particular those relating to Article 5.3 on the protection of public policies, state of a "fundamental and irreconcilable conflict between the interests of the tobacco industry and those of public health"They specify that interactions with the tobacco industry should not “give the impression of actual or potential collaboration or partnership”, which is not the case with the agreement concluded with the FCCPC.

Furthermore, calling on the CSR framework and inviting BATN to engage in public health also goes directly against the provisions of the treaty, which classify these types of initiatives as forms of promotional actions and public relations operations. In 2021, a report by Corporate Accountability and Public Participation Africa (CAPPA) was already alarmed by the use of CSR by tobacco manufacturers to improve their image[4]He called for stricter enforcement of the National Tobacco Control Act of 2015 and the National Tobacco Control Regulations adopted in 2019.

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[1] Okpale F, FCCPC fines British American Tobacco Nigeria $110m for violations, Business Day, published December 27, 2023, accessed December 28, 2023.

[2] Dzirutwe M, Nigerian competition watchdog fines British American Tobacco $110 mln, Reuters, published December 27, 2023, accessed December 28, 2023.

[3] British American Tobacco Nigeria fined $110 million, Investing, published December 27, 2023, accessed December 28, 2023.

[4] Abade E, Industry interference major challenge to effective tobacco control, says CAPPA, The Guardian, published on 1^er February 2021, accessed December 28, 2023.