18 May 2010

The Art of Bribing- Million Dollar Cigarettes

I was reading and article in the China Daily about an anti-smoking campaign aimed at stopping the ritual of giving cigarettes as gifts.  But I think it failed to mention an off-shoot of this ritual that has caused many to gravitate towards it instead of away.
"We want to remind people not to choose cigarettes as gifts, because smoking can cause diseases and health hazards," she said.
"But using a carton of cigarettes as a gift is a customary Chinese way of improving relations," Wu Yiqun, director of the Beijing-based nonprofit group Research Center for Health Development.
"Cigarettes are the medium for person-to-person exchanges, providing a faster, more convenient communication tool," Wu said.
More than 10 percent of the respondents in a recent survey by the Chinese Academy of Social Sciences said the cigarettes they smoke were gifts to them.
Those polled also said that the pricier the cigarettes they received, the more important they felt.
Shrewd tobacco producers in the country have also developed 90 kinds of high-end cigarettes in the past two decades to meet the need, Wu said.
The most expensive cigarettes sell at 2,300 yuan ($356) a carton, while many others among the 90 kinds are between 1,000 yuan and 1,500 yuan. Prices of expensive cigarettes are between 45 to 120 times that of low-end cigarettes, with the cheapest type selling for only 18 yuan a carton, she said.
Chinese tobacco producers also control their output to make the cigarettes more "high-end", Wu said."
There are 2000- 4000 tobacco shops in a one square mile area in Beijing, Shenzhen and Guangzhou providing providing over 400 non-counterfeit local brands.

But, some of those stores provide an "added value" service.  That value is based on supplying certain cigarettes  solely intended for gift giving. They are well known enough that when received the recipient knows that they are not meant to be smoked. Bribes-in-a-Box.
So no one's heath in harmed, just their wallets inflated.

The basic process is this: The packs or cartons prices range from $500-$100,000 and up.  The gift giver buys a carton for say $20,000. The recipient thanks him/her kindly then returns that carton to the store where it were purchased. The store refunds the money...minus a 10-20% transferring fee.  From the cartons I've seen, they are color coded indicating price and have a logo showing info about the vendor.  To make it easier some shops work as a franchise or western union of sorts. Rather efficient, I think. 

But this practice has flourished over the past decade. Those unable to buy the cartons are buying the next best thing... high priced smoke-able cancer sticks. 
To break this habit, the "big players" need change their choice of gift. Until then, the low-middle class business community willing be smoking more than ever.

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