£6m of local pensions invested in Gallaher parent

The pension contributions of hundreds of public sector workers and local politicians are invested in the parent firm of Japan Tobacco International (JTI), the owner of the under-threat Gallaher plant, a Ballymena-based cigarette-maker, which began its life in County Londonderry around 160 years ago.

Yesterday (Tuesday, October 7) JTI announced it was restructuring its manufacturing facilities as a result of “significant and sustained changes impacting its global business.”

Under the proposals JTI’s facilities in Lisnafillan, where over 800 people are employed, and Wervik, Belgium, will cease to operate, with production moving to other facilities, potentially in Poland and Romania.

Gallaher’s tobacco was founded in Londonderry in 1857 by the teenage Tom Gallaher who sold hand rolled cigarettes around the city from a hand cart. By 1896, his Belfast tobacco factory was the largest in the world.

The company was taken over in 2007 by JTI.

Thousands of public sector pensions including those of local council workers, staff at Ilex, WELB, NIHE, Magee, City of Derry Airport, NWRC, Ulsterbus, some local schools and local councillors across Northern Ireland are invested in Japan Tobacco, which is JTI’s parent.

The Northern Ireland Local Government Officers’ Superannuation Committee (NILGOSC) pension fund holding in the firm stood at 358,500 units at the end of March, representing a total investment of £6,761,099.

Announcing the proposed closure of Gallahers by 2016, JTI said the challenging economic environment, excise tax pressure coupled with illegal trade has triggered industry volume contraction in a number of key European countries.

“This is compounded by the need to comply with legislation, including the revised EU Tobacco Products Directive (TPD2), which will significantly reduce the number of pack formats to be produced for various markets. This inevitably has led to the need to review JTI’s manufacturing operations,” the firm said.

This provoked yet another war of words between the DUP and Sinn Féin.

North Antrim DUP MP Ian Paisley said: “In Northern Ireland, two of our MEPs recognised the risks to employment in Ballymena, but Martina Anderson not only supported this directive, but was one of its champions.

“Whilst other elected representatives stood on the factory floor to hear of its impact, Martina Anderson pointedly refused to accept an invitation to visit the company.

“The Sinn Féin MEPs claims that employment would not be affected will be ringing in the ears of workers given such devastating news yesterday.”

But Ms Anderson responded: “Obviously this is devastating news for the workers involved and their families and my thoughts are with them.

“However, We need to be very clear about the reasons for the relocation of JTI at the cost of 900 jobs.

“The EU tobacco directive does not take effect until 2016. JTI have also stated they are locating to other EU member states. These too will be equally affected by the directive.

“The reason for JTI Gallaher’s closing their plant in Ballymena is to increase its profit margins and save money on labour costs by moving to a country with lower wages.”