‘Crisis problem’: Economist’s unease about parent group’s tobacco links
SSince its founding 181 years ago, The Economist has built a reputation for integrity based on the independence of its editorial content. But now the respected weekly news magazine and website is facing a growing backlash over the editorial and commercial ties a division of its parent company has with three of the world’s largest tobacco companies.
Economist Impact, a unit that organized 136 events in the year to the end of March, was forced earlier this month to cancel a world cancer conference due to take place in Brussels at the last minute, following protests from speakers and attendees over its links to big tobacco.
The Economist Group said on Friday that its embattled events division will no longer take on “new work” from tobacco companies.
However, two other upcoming health-focused events in London are now being hit by an exodus, with the Guardian revealing this week that more than a dozen speakers from organisations, including the NHS, had pulled out in protest at the division’s bedfellows.
Economist Impact, which describes itself as combining the creativity of a media brand with the rigor of a think tank, has signed extensive event, sponsorship and paid editorial content agreements with Philip Morris International (PMI), Japan Tobacco International (JTI) and British -American Tobacco (BAT).
The three tobacco multinationals, which own many of the world’s most popular cigarette brands including Marlboro, Benson & Hedges, Dunhill and Pall Mall, bring in millions of dollars annually for the division, according to one source.
This is evident from the latest annual report of parent company The Economist Group (TEG). higher annual profit up 12% in the year to the end of March, said its “success is based on The Economist’s reputation for honesty, integrity and independence – so its journalism must remain free from the group’s commercial pressures”.
However, the paid editorial content published online by Economist Impact, which includes “advertising features” and articles featuring big tobacco sponsorships, is often “close to customer areas of interest,” as one source put it.
One piece, written by a JTI senior PR, suggests that’s what governments should do Beware of reducing the affordability of cigarettes through taxes, as this encourages smokers to turn to the sale of contraband, costing the state valuable excise taxes that could “limit budget deficits.”
In another piece, “backed by Philip Morris International,” the tobacco giant is portrayed sympathetically and the switch to selling smokeless nicotine products is compared to car manufacturers who historically developed polluting combustion engines but are now switching to cleaner technologies, such as electric and hybrid vehicles.
Other relationships include BAT as the highest level platinum sponsor of Economist Impact’s Sustainability Week conference in London next March. PMI sponsored this year’s diamond level conference.
The latter is said to have the deepest ties with the division. That included a partnership with PMI Connects, which the tobacco company describes as its “thought leadership and networking platform created to connect curious minds.” It has hosted events with Economist Impact, including one three-day conference in Bahrain including car racing for those in attendance.
“This is a significant and growing crisis problem within the group,” the source said. “There is great concern among many employees – especially in healthcare – about the amount of sponsorship coming from big tobacco.”
There are also ties to big tobacco among TEG’s owners and management.
In 2015, Exor, the investment company of the Italian Agnelli familybecame the largest individual shareholder, taking a 43.4% stake in only the second major change of control in The Economist’s history.
Exor also controls 36.5% of the special voting shares in Ferrari, which has a 51-year history with PMI and carried the Marlboro brand on its Formula 1 cars before the sport completely banned tobacco advertising in 2006.
Rupert Pennant-Rea, former editor of The Economist from the mid-1980s to 1993, later became non-executive director of TEG in 2006 and held the role of chairman from 2009 to 2018, when the Exor deal was closed. . From 1998 to 2007 he was a non-executive director on the board of directors of BAT.
The reporting of links to big tobacco products is likely to make uncomfortable reading for TEG’s current board, and in particular for non-executive director Vindi Banga, who has chaired the board of trustees of cancer charity Marie Curie since 2018.
“Neither Economist Impact clients nor The Economist Group board have any influence over editorial decisions and reporting,” a TEG spokesperson said.
Each year, TEG publishes in its annual report a reminder of the “guiding principles” established by the board. These include that it operates in a “clear and ethical context” with a commitment to “independence, integrity and quality”. The group’s unique governance structure means that The Economist’s editorial values are overseen by four independent trustees.
Economist Impact was founded following the arrival in 2019 of group director Lara Boro, a former senior executive at Informa, who received £2.14m in remuneration in the year to the end of March.
The latest results show the division’s turnover fell by 16% in the past financial yeardue to a decline in advertising and research revenues, while the workforce has been reduced from 419 in 2022 to 348 as of March 31 this year.
As commercial pressure mounts on the struggling unit, one source says Economist Impact has become increasingly reliant on high-paying big tobacco projects, noting there aren’t many clients who can generate the size of revenue for the business they do.
In response to the growing crisis, TEG said in a statement issued shortly before publication that its Economist Impact division will no longer take on “new work” from tobacco companies.
“Healthcare is a strategic priority for Economist Impact as we grow the scale and reach of our business and tackle the key issues of the future,” a TEG spokesperson said. “To continue to realize the full ambition of our work in healthcare, Economist Impact will no longer accept sponsorship or undertake new work with tobacco companies. This extends a long-standing policy of not accepting sponsorship from tobacco companies for Economist Impact’s healthcare-related work or events.”
TEG emphasized that the Economist newspaper operates completely independently of The Economist Impact division.