British American Tobacco is to sell its cigarette
making operation in Burma, bowing to pressure to cut
ties with a country that is widely criticised for
human rights abuses.
BAT, the world's second-largest maker of cigarettes,
agreed to offload its 60% stake in Rothmans of Pall
Mall Myanmar to a Singapore-based partner in the
UK Prime Minister Tony Blair criticised BAT for
continuing to work with the military leadership that
has ruled Burma since the 1960s after it placed
opposition leader and Nobel Peace Prize winner Aung
San Suu Kyi in protective custody in May.
According to the UK Government, BAT's Burma operation
worked closely with the business arm of the ruling
"The sale agreement follows the exceptional formal
request by the British Government in July for us to
reconsider our investment,'' said Michael Prideaux,
BAT's director of corporate and regulatory affairs.
"The solution is a balanced outcome to a difficult
Making it clear
Earlier this year, Premier Oil withdrew from Burma,
leaving BAT as the country's biggest British investor.
"I appreciate that this was a difficult process, but I
am in no doubt that the decision was the right one,''
said Mike O'Brien, foreign office minister.
The sale to Distinction Investment Holdings will be
finalised during the next 12 months, BAT said.
The new owner will continue to produce London and
State Express Brand 555 cigarettes in Burma under
licence from BAT.
The company's Burma operation employs about 500 people
locally. It is not a significant part of BAT's annual
revenue and the company will continue to receive money
under the licensing agreement, analysts said.
Campaigners said they are optimistic that today's
decision may help prompt other corporations to sever
ties with Burma.
"They had to be dragged out kicking and screaming but
at least they are out," said John Jackson, director of
the Burma Campaign UK, a London-based pressure group.
BAT shares closed two pence lower at 710p.