BAT Chief: "WHO is Super-Nanny" (fwd)

[Robert Weissman <rob@essential.org>]

April 29, 1999

Dow Jones Newswires

BAT Chairman Labels WHO Super-Nanny Hijacked By Zealots

By PANAGIOTIS PYLAS
Dow Jones Newswires

LONDON -- Martin Broughton, the non-smoking chairman of British American
Tobacco PLC (BTI), labeled the World Health Organization a "super-nanny" as
it attempts to introduce the world's first public health treaty by the year
2003. Speaking to shareholders at Thursday's annual general meeting in
London, Broughton said the WHO's "Tobacco-Free Initiative" had been
"hijacked by zealots". The WHO is seeking for a worldwide ban on cigarette
advertising and possibly banning smoking in public across the world. "The
WHO has to realize we live in a free society," Broughton said. However, the
company was not averse to helping the WHO, Broughton said, in restricting
access to cigarettes for underage children, which in BAT's case is anyone
under the age of 18. "We can help at the point of sale," he said. "An
international convention will not make any difference on access rates."

His claim that the company does not target children was challenged by the
World Development Movement, which argues that the company "has taken full
advantage of lower marketing standards to aggressively market cigarettes in
ways that are no longer permissible in Europe and other traditional
markets." BAT has identified emerging markets, such as Brazil and China, in
its attempt to be the biggest cigarette maker in the world. With a 16% world
market share, after the completion of its merger with Rothmans, BAT will be
1% behind Marlboro maker Philip Morris Cos. (MO). The suggestion from the
World Development Movement is that BAT is resorting to unscrupulous methods
in its attempt to build market share.

Broughton denied the charge and said any unscrupulous goings-on,
particularly in developing countries like China and Malaysia, had no
relation with the company. People are "piggy-backing" on the company, he
said. "Counterfeiters are a real headache for us." 

"We have in place a number of programs to prevent access to children,"
Broughton said. "We have been developing these in recent years and been
having some success." The chairman also confirmed a report in Thursday's
Wall Street Journal that its U.S. subsidiary Brown & Williamson is seeking
to introduce a safer cigarette, but failed to commit the company to putting
1% of its total turnover, or around GBP200 million, into research and
development for this product.

Broughton did, however, deny that nicotine addiction is necessary to enjoy
smoking. One angry shareholder disagreed. "One of life's great pleasures is
to scratch your back but only if you're itching," he said. BAT, the
shareholder said, is being deceptive when linking smoking and pleasure.
Earlier, BAT delivered a better-than-expected first quarter result. Pretax
profit in the three months to end-March were down to GBP309 million from
GBP311 million last time, but way ahead of analysts' expectations of between
GBP280 million and GBP295 million. A one-off gain in net interest and the
absence of any demerger and restructuring benefits offset the first
quarter impact of economic and currency difficulties in a number of markets.
Broughton is also optimistic that the group's full-year result will be
broadly similar to last year's and the merger with Rothmans will be
completed sometime during the second quarter. He also thinks current concern
on litigation is "now considerably overstated."

At 1245 GMT, BAT shares were trading 26 pence, or 5.2%, higher at 531 pence. 

-By Panagiotis Pylas: 44 171 842 9291; panagiotis.pylas@dowjones.com

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