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ASH Daily News

27 October 2003

HEADLINES

BAT defies court over 'confidential' files
Smoking bans work
Tobacco industry survey shows smoking ban unpopular
Tobacco companies start price war in Poland to offset tax rises

FULL TEXT

BAT defies court over 'confidential' files

Tobacco giant British American Tobacco, owner of Lucky Strike and Dunhill cigarettes, is in a bitter battle with the US Department of Justice over whether it should hand over confidential documents.

A judge ordered last Monday that BatCo, a US subsidiary of the FTSE 100 group, be fined $25,000 (£14,800) for every day it fails to hand over the documents; the total fine is now $125,000. The DoJ believe the documents, held by BAT's Australian subsidiary, might show the company had hidden the health risks associated with tobacco.

But BAT claims the documents are privileged and refuses to hand them over. A spokeswoman said: "They are privileged and confidential documents and we want to protect them." She declined to discuss what they contained but added: "BatCo definitely doesn't agree with the ruling and thinks it's flawed and erroneous. It is exploring all possibilities for appeal and BAT Australia is to instruct its lawyers to intervene."

BatCo intends to ask the judge to allow its lawyers to review the documents instead of handing them over to the DoJ. If that is not acceptable - and it is understood the DoJ will fight the suggestion - the case will go to the appeal court. BatCo will ask for the fines to be suspended while it appeals.

The DoJ is investigating the tobacco industry over fraud and racketeering claims. BAT's involvement stems from a lawsuit filed against its Australian subsidiary in 2001 by Rolah McCabe, who has since died of lung cancer. It lost and was ordered to pay A$700,000 (£250,000) in compensation, although the decision was overturned on appeal. However, during the trial it emerged BAT had shredded documents that were "were likely to be of importance" in litigation.

The tobacco industry is under increasing pressure in the US as smokers seek compensation for smoking-related illnesses. Companies have been accused of withholding information on the serious-ness of the health risk from tobacco, while individual states have sought compensation to help pay for the care of terminally ill smokers.

Source: Independent on Sunday, 26 October 2003



Smoking bans work

Writing for the Independent Stephen Pollard reports from New York, saying that the impact of the legislation that saw in a smoking ban has been wonderful, reclaiming the city from the smokers.

But not without the controversy, nor irking its detractors, which until recently included the Stephen Pollard himself. Having been to New York since the ban, Mr Pollard is now happy to concede that smoking bans do work, and that London should have one too. Here, here.

Full article:
http://argument.independent.co.uk/commentators/story.jsp?story=457576
Source: The Independent, 27 October 2003



Tobacco industry survey shows smoking ban unpopular

According to a BMRB survey commissioned by the tobacco companies, fewer than on in five Britons want a New York style smoking ban in public places.

The survey found that most of the 1,800 people polled put yobbish behaviour, litter and graffiti higher on their hate list.

Source: The Sun, 27 October 2003



Tobacco companies start price war in Poland to offset tax rises

The tobacco industry this week responded to the Polish government's attempts to raise taxes on cigarettes by slashing prices. Poland, like other countries joining the European Union, is required to increase its tobacco taxes to bring them into line with those of the EU.

In response to the tax hikes Gallaher and British American Tobacco introduced new cheap brands and Philip Morris dropped the price of its most popular cheap brand by 15%. Reemtsma, now owned by Imperial, is likely to follow, leaving other companies that cannot afford price reductions in an unenviable position.

The industry had already lobbied successfully for long delays to the deadline for these tax increases, and its latest move indicates how it is likely to respond to tax increases throughout the countries joining the EU.

Cigarette taxes have proved to be one of the most effective means of reducing the number of people who smoke and preventing young people taking up the habit. Any attempts to reduce prices could have major consequences in central and eastern Europe, which have some of the highest rates of cigarette consumption and tobacco related disease in the world.

EU expansion provides major opportunities to the tobacco industry. Ten countries are due to join the EU next year (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic, and Slovenia) and two more by 2007 (Romania and Bulgaria). If Turkey joins as well the EU will be the largest single market in the world.

This expansion offers the tobacco industry economies of scale for manufacturing and marketing, a more stable business environment in central and eastern Europe, and potentially greater demand for cigarettes as incomes rise.

"Accession [to the EU] will provide opportunities for the tobacco industry but will not contribute to people's health through effective tobacco control measures across Europe," said Tamsin Rose, general secretary of the European Public Health Alliance.

"The draft constitutional treaty does not permit legislation on the grounds of public health except on blood products and human tissues," she said. "Nor have the EU leaders at the intergovernmental conference shown a commitment to making health a priority for the union. Unless this position changes the negative impacts of accession on health will be difficult to mitigate."

Source: British Medical Journal, 25 October 2003




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