British American Tobacco's failure in Turkey

Area of Science:

• Public Health
• Tobacco Control
• International Business

Background:

• Turkey represented a significant market for transnational tobacco companies (TTCs) due to high consumption and domestic tobacco production.
• The Turkish government's tobacco monopoly, TEKEL, was a key target for foreign investment during market liberalization.
• British American Tobacco (BAT) strategically aimed to partner with TEKEL, anticipating privatization and tender opportunities.

Purpose of the Study:

• To analyze British American Tobacco's (BAT) strategy for market entry into Turkey.
• To investigate BAT's attempts to form a joint venture with the state-owned tobacco monopoly, TEKEL.
• To understand the factors influencing BAT's market success or failure in Turkey.

Main Methods:

• Analysis of declassified tobacco industry documents.
• Review of historical records from the Guildford Depository.
• Examination of online tobacco industry document archives.

Main Results:

• Despite multiple attempts from the mid-1980s onwards, BAT did not achieve significant market share in Turkey until after 2000.
• BAT's primary strategy revolved around securing a joint venture with TEKEL, which proved unsuccessful.
• Philip Morris achieved success in the Turkish market during the same period.

Conclusions:

• BAT's investment strategy in Turkey was misguided, overemphasizing the acquisition of TEKEL.
• The competitive landscape and market dynamics, including Philip Morris's alternative approach, contributed to BAT's failure.
• Navigating Turkey's unstable and potentially corrupt investment climate presented challenges for TTCs, yet differing strategies yielded varied outcomes.