Press Release: 31st January 2000

ASH today challenges British American Tobacco (BAT) over its involvement in cigarette smuggling in developing countries by publishing 150 of BAT's internal and confidential documents on the ASH website here[1]. The Guardian and Washington-based Center for Public Integrity also publish major investigative research today. The evidence presented from these sources clearly suggests that smuggling is integral to the operation of the international cigarette market and driven by the ferocious competition between the tobacco multinationals for new markets.

Clive Bates, Director of ASH acknowledged that BAT does not actually do the smuggling itself, but said, "We are making these documents available so that public can decide for themselves whether they believe the tobacco companies' rhetoric on smuggling. The tobacco industry says that there is nothing they can do about it; we say the documents show that while BAT doesn't actually drive the trucks and sneak through customs itself, they are a Mr. Big in the manipulation of international cigarette smuggling."

"The documents show that BAT sought to control markets through cigarette smuggling in the early 90s in ways that went well beyond any acceptable standard of corporate behaviour. It wasn't all happening outside the control of the tobacco industry. They were trying to manage smuggling routes, control price and availability in illegal markets and were treating smuggling almost like anyother distribution channel." said Bates

ASH will be calling on Stephen Byers to launch a DTI investigation and demanding that the Deputy Chairman of BAT, former Chancellor Kenneth Clarke, undertakes an internal inquiry into his company's involvement in smuggling. As the most senior non-executive director, Clarke is responsible for ensuring high standards of corporate conduct and governance.

"We have written to Mr. Clarke asking him take his responsibilities for BAT corporate governance seriously and present an interim report to the BAT AGM on April 27th. It is about time Clarke did the job that BAT shareholders, at least in theory, pay him for." said Bates[2]

Emma Must, International Campaign Manager at ASH said: "Cigarette smuggling is not a victimless crime: the latest projections suggest that one billion people will be killed by tobacco in the 21st Century, the vast majority in developing countries. As the tobacco multinationals turn their marketing firepower on developing countries, tobacco taxation is an vital counter-measure, but this is undermined by large scale smuggling."

[1] The documents have been found by researchers working in the BAT litigation depository in Guildford, England, which contains over 8 million pages of internal documents from the 1950s to 1994. This archive was made public as part of a major litigation settlement in the US State of Minnesota in 1998.

[2] As Deputy Chairman of BAT, Clarke was paid UKP(£)67,820 in 1998, according to BAT's 1998 Annual Report.

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