BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Tuesday, 31 October, 2000, 19:04 GMT
Tobacco firm hits back at politicians
British American Tobacco sold 599 billion cigarettes in the first nine months of 2000
British American Tobacco, facing a smuggling probe and anti-smoking legislation, hit back at policymakers on Tuesday, urging European politicans to drop control laws and accusing state finance chiefs of 'harrassment'.

The increase in counterfeit goods illustrates the consequences of harassing the major tobacco companies

Martin Broughton, chairman, BAT

BAT, announcing sales of 599 billion cigarettes between January and September, called on the World Health Organisation and European Union to drop campaigns for international controls on tobacco sales.

And company chairman Martin Broughton said attempts to discourage smoking by raising tobacco taxes were playing into the hands of bootleggers.

"The increase in counterfeit goods around the world illustrates the consequences of harassing the major tobacco companies, who actually represent the responsible part of the business," Mr Broughton said.

He urged governments to work with tobacco companies in the fight against "disorderly markets", rather than please "single issue pressure groups" by continuing a fight against the industry.

Smuggling probe

But Mr Broughton declined to comment in detail on allegations by anti-smoking campaigners that BAT has itself been involved in tobacco smuggling. The charges, made to the UK's health select committee, prompted the government on Monday to launch an investigation into the company.

Martin Broughton, chairman, British American Tobacco
Martin Broughton: "We will co-operate fully with the investigators"

"We are naturally disappointed [by the launch of the probe]," Mr Broughton said.

"We will, of course, co-operate fully with the investigators."

Politicians involved in tobacco policy should see cigarette firms as "part of the solution, rather than part of the problem", he said.

He invited EU politicians to open discussions with BAT on proposals to cap the strength of cigarettes which can be sold and made in the EU.

Jobs threat

The plans, being considered by the European Parliament, threaten to drive business abroad by imposing tar, nicotine and carbon monoxide limits on EU-made cigarettes even when produced for foreign markets, BAT believes.

The company has warned that the directive threatens 1,800 jobs at factories in Southampton and Darlington.

While welcoming the WHO's invitation to BAT to address a hearing in Geneva on 12 October, he warned the organisation against supporting the drawing up of international anti-smoking laws.

"The WHO has a natural role to play in supporting national governments... but attempts to impose supra-national legislation and universal levels of taxation are invariably unworkable."

Controls are best addressed at a national level, he said.

'Promote citizens' health"

But the campaign group Action on Smoking Health (Ash) on Tuesday that the tobacco industry, as an international sector, warranted global regulation.

Governments have to decide what is more important - the health of the tobacco industry of the health of their citizens

Amanda Sandford, Action on Smoking Health

"If we are going to tackle smoking related issues, we need action at an international level," ASH spokeswoman Amanda Sandford said.

While manufacturing limits may threaten jobs, the industry had survived previous clampdowns, she said.

"And governments have to decide what is more important - the health of the tobacco industry of the health of their citizens."

US profits slump

BAT issued its protestations in its results statement for the first nine months of 2000, which showed pre-tax profits flat at 1.2bn despite 9% growth in the number of cigarettes sold.

BAT cigarette sales
America-Pacific: 81.7bn
Asia-Pacific: 65.6bn
Latin America: 122.1bn
Europe: 153.6bn
Africa/India: 175.5

Data for Jan-Sept 2000

Last year's merger with Rothmans helped BAT report "impressive" profits growth in Europe, where 154 billion cigarettes were sold between January September, 27 billion up on the first nine months of 1999.

But volumes for the America-Pacific region declined 7%, with low sales, raised taxes and costs involved in fighting Federal lawsuits against the tobacco industry depressing operating profits from the US market by one sixth to 363m.

Unforeseen factors

In Africa, the fallout from February's floods depressed sales in Mozambique, while a shortage of foreign currency limited production and demand in Uzbekistan.

BAT owns brands including Benson & Hedges, du Maurier, Dunhill, John Player, Lucky Strike, Rothmans and Winfield.

BAT shares closed 13p lower at 483p in London on Tuesday.

Search BBC News Online

Advanced search options
Launch console
See also:

14 Jun 00 | Health
Tobacco industry under attack
01 Feb 00 | Americas
Tobacco giant denies smuggling links
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories