Mitt worked the lawless Russian privatization period in the 90's to bring Western-style marketing to the cigarette market there. Shady deals, cash transactions, cozy government relationships, and market research yielded Bain millions and led to one of the highest youth and woman tobacco rates in the world. Fascinating story, made even more amazing in light of Mitt's supposed anti-tobacco faith.
The article ran today on Huff Post.
Some excerpts:
Bain's Russian business wasn’t about family-friendly products. Those deals were about cigarettes. And that work sent Bain into the shadows of the post-Soviet economy -– including helping to orchestrate anonymous, convoluted cash transactions to keep major deals hidden from regulators and competitors. It was part of a free-for-all that involved wholesale looting of major industries, as Western technocrats helped facilitate the transfer of Russia's wealth into the hands of a few oligarchs.
Bain's (Romney-led) comeback would not have been complete without Big Tobacco. According to a Boston Globe story, Romney took over the consulting firm in October 1990. A little more than a month later, the company secured a six-month contract with the Marlboro Man’s progenitor, Philip Morris, estimated to be worth $1 million. It would be just one of many Bain deals with the cigarette giant over the years.
Philip Morris actively promoted Bain's work in the tobacco giant's PowerPoint presentations, and in sales pushes to retailers. The company paid particular notice to Bain's cigarette display research. In Bains' hands, where stores placed packages of cigarettes became a science. "From industry research done by Bain & Co, the optimum number of displays for peak profitability is six," reads one Philip Morris guide to convenience store owners.
Bain's top analysts viewed (Russia) as the ultimate prize for Western cigarette manufacturers: a market that had been underserved by harsh cigarettes and antiquated factories. And most importantly, Russia did not face civic watchdogging, or, as the consultants would note, enforceable regulatory rules. To Bain and the tobacco industry, it was like selling American cigarettes in 1950.
It's a long read, but fascinating.