British American Tobacco Zimbabwe Holdings Ltd (BATZ) is allegedly spying on its competitors and had adopted an industrial espionage strategy a few years ago, an internal document seen by businessdigest reveals.
Report by Chris Muronzi
The document titled: Competitor Strategy Document, authored by a K. Zvaita, outlines BATZ’s key objective as to have a formalised market intelligence strategy. BATZ has denied this is the case.
The allegations against BATZ come after it emerged this week its competitors — Kingdom, Savanna Tobacco, Breco (Fodya), Cutrag, Trednet and Chelsea – had lost cigarettes valued at R100 million to armed hijackers in just over a year. The cigarettes were mostly destined for South Africa.
None of BATZ’s products have been hijacked, prompting its competitors to believe the largest cigarette manufacturer in the country was involved in industrial espionage and possible sabotage, a charge BATZ refutes.
“Based on the allegations put to us, and without having access to any further detail, British American Tobacco Zimbabwe (Holdings) Limited (BAT Zimbabwe) strongly denies allegations of its involvement in any possible industrial espionage or illegal activity. We reserve the right to base our competitive strategies on legitimate market information but firmly deny pointing to illegal tactics in this regard. BAT Zimbabwe and its employees are committed to strict compliance with the various laws and regulations that govern the sale of its products and to open and fair competition,” a BATZ spokeperson said on Wednesday.
According to the document seen by businessdigest, BATZ devised an espionage strategy as far back as March 2006.
“The thrust of this document is to enable BATZ as an organisation to have a formalised espionage strategy which enables the organisation to be proactive and not to be reactive to competitor movements, activities and strategies and not to be caught unaware,” the document reads.
As part of its strategy, BATZ set out to identify the company’s key contacts, people who could divulge strategic information and get sound marketing intelligence.
“This requires the design, implementation and management of an effective Marketing Intelligence System (MkIS). An MkIS ensures an ongoing information flow that enables the business to be reactive to competitor strategies and not to be following competitor tails,” it adds.
According to the document, BATZ indentified service providers — advertising and ISF (Importer Security Filing) agencies, transport companies (eg SWIFT, CLAN), what was only described as NPD teams, key contacts, competitor contract workers, mock interviews targeted at competitor employees, customer surveys, key contacts through-out the supply chain and buyers — as possible sources of information. The document does not, however, list hijacking as a possible strategy to beat competition.
Local tobacco industry players say the Tobacco Institute of South Africa contracted a security firm, Forensic Security Services, to monitor Zimbabwean cigarette manufacturers, whose brands are giving that country’s products stiff competition.
The security firm, owned by former apartheid military operative Stephen Botha, is said to have recruited spies within the workforce of Zimbabwean cigarette manufacturers. The spies, according to sources, supply consignment export details, enabling the cartel to track, intercept and highjack Zimbabwean cigarette consignments.
FSS is said to have engaged an unnamed business tycoon who owns one of the largest courier service companies to co-ordinate the spies and their payments. The tycoon’s trucks have also been highjacked in what are feared to be inside jobs.
The BATZ spokesperson was aware of reports that illicit trade in cigarettes had become an increasingly alarming problem throughout the Southern African Region, in particular South Africa, with seizures by law enforcement authorities widely documented. However, BATZ was not involved in contraband, she said.
“Our stringent Product Integrity and Traceability standards as well as Standards of Business Conduct have become entrenched in the way we operate, and we endeavour to uphold these at all times and this requires us to know our suppliers, customers and where our products go to,” the BAT spokesperson said.