UK: British American Tobacco Involved in Smuggling

An extremely important investigative story on British American Tobacco's
involvement in cigarette smuggling was published today by the Guardian (UK)
and the Center for Public Integrity. The product of a six month
investigation during which thousands of pages of internal industry documents
were analyzed, the report shows that smuggled cigarettes are an integral
part of the company's business operations.

The report is significant for a number of reasons:

a) Since 1997, three BAT managers have either pled guilty to or been
convicted of charges related to tobacco smuggling. The company has
consistently claimed that these were "rogue" operations that did not have
the approval of management.

b) It comes on the heels of a lawsuit filed by the Canadian government
against another cigarette company -- R.J. Reynolds -- alleging that the
company directed a smuggling operation on the U.S.-Canadian border. An RJR
executive who recently pled guilty of involvement in the scheme recently
appeared on 60 Minutes II (a popular news show in the United States) and
pointed the finger directly at senior management. He is now assisting the
Canadian government and consulting with US Department of Justice officials
who also are looking into the possibility of filing suit against the
company.

c) BAT, Philip Morris and other cigarette companies have always raised the
specter of widespread cigarette smuggling should the price of cigarettes
rise dramatically as a result of a tax increase. Given these recent
revelations, it seems as if the companies have been using this as a threat
rather than a warning.

The story and a host of related links can be found at:

http://www.newsunlimited.co.uk/bat/

The full report can be found on the Center for Public Integrity's website:

http://www.public-i.org/story_01_013100.htm

Additional links can be found at ASH UK's website, including extensive links
to a number of the industry documents:

http://www.ash.org.uk/smuggling/

• 109 Tobacco