The State and Tobacco: When the Promoter Is Also the Regulatory Authority

An investigation by the media outlet The Examination[1] reveals that twenty-one countries, including China, Egypt, Laos, and Japan, hold stakes in tobacco companies. These companies, often majority-controlled by governments, alone produce more than half of the cigarettes sold worldwide. This situation highlights a major contradiction in public health, since governments profit from the sale of tobacco while also being responsible for protecting their citizens from its harmful effects. The existence of this dual role, both promoter and regulator, illustrates a worrying institutional conflict of interest.

More than half of the world market under state control

Many states around the world continue to hold direct or indirect stakes in the tobacco industry, a situation that illustrates a structural conflict of interest and undermines the effectiveness and credibility of their public health policies. In China, the China National Tobacco Corporation remains a state monopoly and is the world's largest cigarette producer. Public monopolies also persist in Vietnam with Vinataba, in Thailand with the Tobacco Authority of Thailand, as well as in Lebanon, Egypt, Iran, Iraq, Jordan, Libya, Syria, Tunisia, and Yemen. In other countries, the state retains significant stakes in national or regional companies: in Japan, it holds about a third of the capital of Japan Tobacco, the world's second-largest producer; in Laos, it is a shareholder in Lao Tobacco Limited, alongside multinationals; in North Macedonia, the state holds more than 40 % of the Prilep Tobacco Combine; In India, nearly 28 billion of ITC's capital remains in the hands of public institutions; and in Bangladesh, the government owns about 11 billion of BAT Bangladesh. Beyond these direct stakes, countries such as Jamaica, Korea, and Zambia also invest in the sector through public funds or pension schemes. Together, these states account for more than half of global cigarette production.

A conflict of interest with national and international implications

The direct ownership of tobacco companies by governments creates a profound contradiction that undermines public health policies. By deriving significant profits from cigarette sales, states place themselves in a position where their economic interests collide with their responsibility to protect the health of their citizens. This situation is not theoretical: it concretely influences the ability of governments to make ambitious decisions, for example, when it comes to increasing taxes, imposing advertising restrictions, or strengthening health warnings. Every tobacco control measure adopted risks reducing the profitability of companies in which the state is a shareholder, creating a structural bias in favor of the status quo or minimal and ultimately ineffective reforms.

This contradiction takes on an even more worrying dimension at the international level. The majority of these countries have ratified the WHO Framework Convention on Tobacco Control (FCTC), which requires its signatories to protect health policies from tobacco industry interference. Article 5.3 of this treaty, considered one of its pillars, explicitly requires states to prevent and limit the influence of manufacturers on the development of laws and regulations. The guidelines for implementing this general obligation, adopted unanimously in 2008, explicitly state that it is appropriate to "treat the state-owned tobacco industry like any other tobacco industry." However, when the government itself is a shareholder in a manufacturer, this separation becomes virtually impossible to guarantee. States find themselves both judge and jury, blurring the line between protecting the public interest and defending commercial revenue.

This situation also weakens the credibility of international commitments. It exposes the governments concerned to accusations of inconsistency, or even non-compliance with their legal obligations. It also fuels mistrust among civil society actors and multilateral institutions, which expect states to give absolute priority to public health. This mistrust is all the more well-founded since these countries most often turn out to be opponents of the tobacco control measures discussed at the sessions of the Conferences of the Parties to the FCTC treaty. In the long term, this duality can compromise the effectiveness of international cooperation in tobacco control by blocking decisions and leaving gray areas where economic interests continue to prevail over health protection.

A neglected theme despite the lessons of history

Despite the magnitude of the issue, the issue of state ownership in tobacco companies remains largely unaddressed, both in academic research and in public debate. The scientific literature has focused primarily on the direct influence of large private multinationals, leaving the responsibility of governments, which continue to control a significant portion of the global market, in the shadows. This media and academic invisibility contributes to underestimating the impact of state conflicts of interest on the implementation of public health policies. It also allows some governments to maintain this situation without any real critical examination, even though their dual roles directly influence decisions on regulation, taxation, and prevention.

Recent history, however, provides useful analytical insights. In the 1990s, the privatization of public tobacco monopolies in several former Soviet bloc countries profoundly transformed the market. The withdrawal of public capital, without sufficient health oversight, paved the way for the massive arrival of multinationals, whose aggressive business strategies led to a rapid increase in consumption. Far from improving public health, these privatizations contributed to a worsening of the tobacco epidemic in countries such as Russia and Ukraine. These examples serve as a reminder that the withdrawal of state ownership from tobacco companies alone does not guarantee an improvement in the health situation. Without a robust legislative framework and strong political will, transfer to the private sector can, on the contrary, increase the dependency of new populations and hamper prevention efforts.

On the other hand, the case of France highlights how the privatization of the former public company SEITA in 1995, which became Altadis and was then bought by Imperial Brands, and the departure of the French State from the Board of Directors in 2000, was favorable to public health. However, the maintenance of a monopoly on the retail distribution of tobacco products, with sellers closely linked to the public authorities and close to tobacco manufacturers, remains the major obstacle to any effective anti-smoking policy in the country.

Necessary reforms in the face of a societal choice

Resolving this paradox requires structural reforms that clearly separate the protection of public health from the economic interests of tobacco. Experts suggest several options: establishing a legal separation between regulatory and control functions and any involvement in the industry, increasing transparency on conflicts of interest, and strictly implementing Article 5.3 of the WHO Framework Convention on Tobacco Control, which requires protecting public policies from any influence from the industry. These measures aim to ensure that decisions on prevention, taxation, and regulation are made solely in the service of public health, without interference from commercial interests.

©Generation Without Tobacco

AE

[1] Jason McLure, When governments own tobacco companies, who watches out for your health?, The Examination, published August 28, 2025, accessed August 29, 2025