European news bulletin - 13 September 1999 (fwd)

[Robert Weissman <rob@essential.org>]

EUROPEAN BULLETIN EU9933 – 13 September 1999 

Headlines

EUROPE

CROATIA: Court inhibits TDZ-BAT deal

DENMARK: Drop in turnover, post duty-free abolition, not as bad as predicted

FRANCE: Ground-breaking anti-tobacco suit opens in France
FRANCE: Seita records rise in first-half year profits
SPAIN: Spanish regional governments lobby Tabacalera to save plants
SPAIN: Call for tougher anti-smoking measures 

INTERNATIONAL

KENYA: British American Tobacco fears over new tobacco legislation
USA: Barmer versus cigarette industry

Full Text

CROATIA: Court inhibits TDZ-BAT deal

The commercial court in Split, Croatia has denied the registration of
BAT's DM 14.5mn capital increase, which would have raised its stake in
Croatian cigarette producer Tvornica Duhana Zadar (TDZ) to more than 80%.
The capital increase had been decided on the TDZ shareholders’ meeting in
May 1999. Since BAT held only 18.69% of TDZ at that time, it had no voting
right on the assembly, according to the court. BAT will appeal the court's
decision and rethink its strategy concerning further investments in
Croatia.

Source: The Gale Group, 19/8/99

DENMARK: Drop in turnover, post duty-free abolition, not as bad as
predicted

Copenhagen airport has predicted an annual drop in retail turnover of 30%
following the abolition of intra-EU duty free sales. However, the airport
centres manager, Alan Bork, described the fall as ‘satisfactory’ since 65%
of passengers were affected by the end of duty-free shopping. If his
prediction of a 30% fall is correct, it will be an improvement on
investment bank Goldman Sachs’ prediction in July which said 60% of
duty-free sales would be lost at Copenhagen, causing a DKr 200m pre-tax
loss.

Source: Tobacco Europe, September 1999




FRANCE: Ground-breaking anti-tobacco suit opens in France

A court has begun hearing a damages suit against national cigarette maker
Seita filed by the family of a heavy smoker who died of cancer nine months
ago. It is the first anti-tobacco case involving an individual in French
legal history. Richard Gourlain, who used to smoke three packets of
non-filter Gauloises cigarettes a day, lodged the complaint against Seita
in December 1996 after he was diagnosed as suffering from cancer.

His family decided to pursue the case after his death and are seeking 2.7
million francs ($436,900) in damages, accusing Seita of failing to warn
people soon enough about the dangers of smoking and for producing a
dangerous, addictive product.

French state health insurer, Caisse Primaire d’Assurance Maladie, has
joined forces with the plaintiffs and is demanding 977,396.07 francs in
damages to cover the costs of treating Gourlain, who was 50 when he died.

The trial is being held in the central French town of Montargis and it is
not yet clear how long it will last.

Seita, which was privatised in 1995 and produces the Gauloise brand, said
in a statement it was confident it would win the case. "The risks (of
smoking) have been known for several decades," the company said. "Seita
has never denied that tobacco is a risk factor for health."

Earlier this year a French health insurance fund filed a 51.33 million
franc lawsuit against four cigarette companies, including Seita, to cover
the estimated cost of the treatment of illnesses linked to cigarette
smoking. The suit also called for an annual fund of 23.6 million francs
from the four firms because "tobacco products do not offer the kind of
safety one could legitimately expect".

Source: Reuters, 8/9/99





FRANCE: Seita records rise in first-half year profits

French tobacco company Seita surprised analysts with soaring first-half
results but left them curious about any acquisition plans. The former
state-owned company, which has 33.2 percent of market share, posted a
first half operating profit of 154.9 million euros - steeply up from the
97.8 million registered in the same period last year. Company chairman
Jean-Dominique Comolli told a news conference the company would produce
strong full-year results though accounting changes would make the second
half "less spectacular" than the first.

With regard to new acquisitions, Comolli was less forthcoming, merely
saying that a number of possibilities were open to them. One analyst said
any purchase made in the short term was likely to be small scale. But she
thought any negotiation would likely be focused abroad.

Pressed on whether Seita was still in talks with Spain's Tabacalera -- the
two created a joint venture known as Global Tobacco in February 1998 to
strengthen their international business -- Comolli would only reiterate
that the fragmented European tobacco market needed to consolidate.


Source: Reuters 9/9/99




SPAIN: Spanish regional governments lobby Tabacalera to save plants

Various regional governments in Spain are trying to persuade Tabacalera SA
not to shut tobacco factories in their areas. However, the company said it
will push ahead with its plans. "Tabacalera rejects any form of political
pressure," a spokesman said, adding that the program of plant closures
will ensure the company’s market competitiveness.

Tabacalera plans to reduce the number of factories it operates in Spain to
eight from 14 by 2003, with the loss of 1,400 jobs. Production from five
plants will be concentrated in two new factories.

However, the regional governments of Cantabria, Asturias and Valencia are
lobbying for the company to keep production at its existing plants. "We’re
trying to keep the factories open," said a spokeswoman for the regional
government of Valencia.

A spokesman for Cantabria confirmed that the authorities have arranged
meetings with Tabacalera executives to discuss the plans. He added that
labor unions are also lobbying the company.

Source: The Wall Street Journal Interactive Edition, 7/9/99




SPAIN: Call for tougher anti-smoking measures

Speaking at the European Cardiology Congress, a representative of the
Spanish anti-tobacco group Comite Nacional de Prevencion del Tabaquismo
has called on the Spanish government to take a much tougher stance on
cigarette smoking and has said that without this it will be impossible to
stop the continual increase in smoking among younger women. Smoking causes
46,000 deaths per year in Spain, 40% of which are due to cardiovascular
problems. While smoking among men is on the decline the number of women
smokers in Spain is increasing by 2% per year, while the average number of
cigarettes smoked by women is also on the increase. The Committee is
specifically calling for increased cigarette prices, tougher controls on
cigarette advertising and more efforts in education and prevention.

Source: El Pais 31 Aug 1999 via The Gale Group.



INTERNATIONAL

KENYA: British American Tobacco fears over new tobacco legislation

British American Tobacco is calling for some involvement before planned
Tobacco control legislation is introduced in Kenya. The company says the
draft bill from the Ministry of Health may reflect the views of only the
anti-tobacco lobby and BAR wants to be consulted together with the medical
profession. If the anti-tobacco legislation is passed, the manufacturers
claim that the country will lose revenue. Last year BAR paid KSh 6.6bn in
taxes and the tobacco industry employs 1mn people. The bill is designed to
regulate the promotion and sale of tobacco products especially to young
people.

Source: AfricaNews Online, 27 Aug 1999 via The Gale Group Ltd.

Comment: No doubt the company’s call for consultation is a PR stunt. We
can assume that most of the heavy lobbying against the Bill will be behind
the scenes and not for public knowledge.



USA: Barmer versus cigarette industry

The German health insurance fund Barmer Ersatzkasse is considering taking
legal action against the cigarette industry in the US. The insurer wants
compensation for smokers’ treatment costs. Barmer is to wait until the
processes of two US health insurers are over in order to better estimate
the chances of success. There are no plans for a lawsuit in Germany since
the chances of success are slim due to the different legal system and the
fact that the damages would not cover the legal expenses.

Source: Handelsblatt (HT) 31 Aug 1999, via The Gale Group

Amanda Sandford
Research Manager
ASH
102 Clifton Street
LONDON  EC2A 4HW
tel: 0171 739 5902
fax: 0171 613 0531