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The BBC's Rory Cellan-Jones
"Tobacco smuggling has become a lucrative business"
 real 56k

Monday, 30 October, 2000, 14:28 GMT
Tobacco giant in smuggling inquiry
Cigarettes
British American Tobacco is "disappointed"
The Department of Trade and Industry is to launch an investigation into smuggling allegations against British American Tobacco.

Secretary of State Stephen Byers said on Monday he had appointed investigators to look into the allegations.


The tobacco industry will no longer be seen as friends but somebody working hand in glove with organised crime

Action on Smoking and Health
The move was made in response to a Health Select Committee report on the tobacco industry.

BAT has issued a statement expressing its disappointment with the move but has said it will co-operate fully with any investigation.

But anti-tobacco lobbyists have said the investigation should be widened to include Imperial Tobacco and Gallaher.

Smuggling loses Treasury billions

Tobacco "bootlegging" costs the Treasury an estimated 2.5bn a year in lost duty.

It is alleged that some companies were "complicit" in organised tobacco smuggling which BAT's accusers say drives up its profits.

Tobacco companies are alleged to be prepared to supply large quantities of cigarettes to sources in continental Europe used by bootlegging operations.

BAT has been accused of orchestrating, managing and controlling cigarette smuggling in Latin America and Asia, but has strenuously denied the claims.

Co-operation

Mr Byers said: "I have given careful consideration to the unanimous recommendation of the select committee that the DTI should investigate the allegations of BAT's involvement in smuggling.

"I have decided to appoint investigators to look into this and to report back to me as soon as possible.

"I will then decide what further steps I must take and whether the facts support a reference to other authorities."

The campaign group Action on Smoking and Health (Ash) has greeted the news with delight.

Director Clive Bates said he was delighted the DTI was going to hold BAT to account.

Suspicions had to be aroused, he said, when large numbers of cigarettes were exported to countries with too small a market to buy them all.

The former Conservative chancellor and health secretary Ken Clarke is a deputy chairman of the company but has declined to comment on the investigation.

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See also:

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