Features - Firm Guidance
AUGUST 28, 2000
BY JOE SAWARD
West Cigarettes are the major sponsor of the McLaren Formula 1 team. The West brand is owned by the German tobacco company Reemtsma, which is based in Hamburg.
The company was founded in 1910 in Erfurt by Johann Reemtsma after he took control of the Dixi cigarette factory. The firm stayed in Erfurt until 1923 when it moved to Hamburg. Two years later Reemstma died and the business was taken over by his two sons Philipp and Hermann and aggressive policy of marketing different brand names each with its own individual identity resulted in rapid growth and by the end of the 1930s the company controlled around 75% of the German domestic market.
A World War I flyer, Philipp Reemtsma was a friend of Hermann Goering and paid "donations" to him throughout the Nazi era. This helped to protect the business but World War II hit the Reemtsma Family hard. Two of Philipp's sons were killed in the fighting while a third died of polio. After the war the company was in ruins.
In 1949 Philipp established Reemtsma Cigarettenfabriken GmbH and began to rebuild the business. In order to avoid a jail sentence for his payments to Goering, he was forced to pay fines totalling DM10m but by 1950 he had been cleared of all charges and was able to rebuild the company with a new range of brands includingÊWest, Peter Stuyvesant and Davidoff.
The rebuilding process continued until his death in 1959 after which the firm was run by management which was under the control of Philipp's widow Gertrud. Philipp's surviving son Jan Philipp was more interested in being an academic than in running the business and he eventually became a professor at Hamburg University. In 1980 he convinced his mother to sell the majority of the family's shares in the business to the Tchibo coffee company, an offshoot of Beiersdorf AG, the holding company of the Hamburg-based Herz Family. Beiersdorf's other holdings include Nivea skin cream, Labello lipsalve, Atrix handcream, Hansaplast medical dressings and Tesa adhesive tape.
Under Tchibo management Reemtsma continued to grow. The company sponsored the Zakspeed F1 team between 1985 and 1989 to support that growth but without much success. The opening up of Eastern Europe after the collapse of the Soviet Bloc enabled the company to expand rapidly in the east and in 1997 Reemtsma agreed to become the major sponsor of the McLaren F1 team.
Jan Philipp Reemtsma uses the family money to fund a variety of institutes and foundations including the Hamburg Institute of Social Research, which is dedicated to ensure that Germans do not forget what happened in the past. In 1996 he was kidnapped and held hostage for 33 days and was only released when the family paid a ransom of $20m.