Since its foundation 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 that a division of its parent company has with three of the world’s biggest tobacco companies.
Economist Impact, a unit that ran 136 events in the year to the end of March, was earlier this month forced to cancel at the last minute a world cancer conference due to be held in Brussels, after an outcry from speakers and attendees about its links with big tobacco.
The Economist Group said on Friday that its embattled events division will no longer be taking on any “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 rigour of a thinktank, has extensive event, sponsorship and paid-for editorial content deals in place 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.
The latest annual report for the parent company, The Economist Group (TEG), which showed it increased annual profits by 12% in the year to the end of March, said its “success is based on the reputation of the Economist for honesty, integrity and independence – so its journalism must remain free from the commercial pressures of the group”.
However, the paid-for editorial content published online by Economist Impact, including “advertisement features” and articles that feature big tobacco sponsorship, is often “close to the client’s area of vested interest”, as a source put it.
One piece, penned by a senior PR from JTI, suggests that governments should beware reducing the affordability of cigarettes through taxes, as this encourages smokers to turn to contraband sales, costing the state valuable excise duties that could “limit budget deficits”.
Within another piece, “supported by Philip Morris International”, the tobacco giant is portrayed sympathetically and its switch towards selling smoke-free nicotine products is likened to car manufacturers who developed polluting combustion engines in the past but are now moving towards cleaner technologies, such as electric and hybrid vehicles.
Other relationships include BAT as a top-level platinum sponsor of Economist Impact’s Sustainability Week conference in London next March. PMI was a “diamond level” sponsor of this year’s conference.
The latter is understood to have the deepest ties with the division. That has included a partnership with PMI Connects, which is described by the tobacco company as its “thought leadership and network platform created to connect curious minds”. It has run events with Economist Impact including a three-day conference in Bahrain that included automotive racing for attendees.
“This is a significant and growing crisis issue within the group,” said one source. “There is deep unease among many of the staff – particularly those in healthcare – about the amount of sponsorship coming from big tobacco.”
There are also ties with big tobacco among the ownership and management of TEG.
In 2015, Exor, the investment company of the Italian Agnelli family, became the largest single shareholder, taking a 43.4% stake in only the second significant 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 used to carry its Marlboro brand on its Formula One cars before the sport fully banned tobacco advertising in 2006.
Rupert Pennant-Rea, a former editor of the Economist from the mid-1980s to 1993, later became a non-executive director of TEG in 2006 and held the role of chair from 2009 to 2018, the period when the deal was done with Exor. He was a non-executive director on the board of BAT from 1998 to 2007.
The coverage of links to big tobacco is likely to make uncomfortable reading for TEG’s current board, and in particular non-executive director Vindi Banga, who has chaired the board of trustees at the cancer charity Marie Curie since 2018.
“Neither Economist Impact clients, or The Economist Group board, have any influence over editorial decisions and coverage,” said a spokesperson for TEG.
Each year, in its annual report TEG publishes a reminder of its “guiding principles” set by the board. These include that it operates in a “clear and ethical context” with a commitment to “independence, integrity and quality”. The unique governance structure of the group involves the editorial values of the Economist being overseen by four independent trustees.
Economist Impact was formed following the arrival in 2019 of the group chief executive 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 revenues at the division declined 16% in the last financial year, due to a decline in advertising and research sales income, while staff numbers have been cut from 419 in 2022 to 348 by 31 March this year.
As commercial pressure increases on the struggling unit, one source said Economist Impact had become increasingly reliant on well-paying big tobacco projects, noting there are not many clients who can bring the scale of revenue to the business that they do.
Responding to growing crisis, TEG said in a statement issued shortly prior to publication that its Economist Impact division will no longer take “new work” from tobacco companies.
“Healthcare is a strategic priority for Economist Impact as we grow the scale and reach of our business and address the most important issues of the future,” said a spokesperson for TEG. “To continue to realise the full ambition of our work in health, Economist Impact will no longer accept sponsorship or undertake any new work with tobacco companies. This extends a longstanding policy not to accept sponsorship from tobacco companies for Economist Impact’s healthcare related work or events.”
TEG stressed that the Economist paper operates totally independently from The Economist Impact division.
