[Intl-tobacco] Clarke admits BAT link to smuggling (fwd)

[Robert Weissman]

Clarke admits BAT link to smuggling
by Kevin Maguire
Source: The Guardian/The Observer, Thursday, 2/3/00

		Thursday  February  3, 2000

	 Kenneth Clarke, the former Tory chancellor who is now deputy
chairman of British American Tobacco, today admits that the multinational
company supplies cigarettes knowing they are likely to end up on the black
market.

Mr Clarke publicly defends the world's second largest tobacco company for
the first time after the Guardian disclosed how it profits from smuggling.

Writing in today's paper, Mr Clarke says it is "faced with a dilemma"
because smokers switch to other brands or counterfeiters cash in if it
restricts supplies.

"Where any government is unwilling to act or their efforts are
unsuccessful, we act, completely within the law, on the basis that our
brands will be available alongside those of our competitors in the
smuggled as well as the legitimate market," says Mr Clarke.

Internal BAT documents analysed by the Guardian were dated up to 1995 but
the non-executive director makes no attempt to deny that the exploitation
of smuggling is continuing.

The all-party Commons health committee will today consider recalling
Martin Broughton, BAT's chairman, as part of an investigation into the
tobacco industry.

Audrey Wise, a Labour member of the committee, said: "If there was ever a
case of being within the letter of the law but clearly outside the spirit
of the law then this is a gem. Smuggled goods are illegal goods, so if
you're deliberately making your goods available for smuggling knowingly
and deliberately you are an accessory to the fact."

Clive Bates, head of the anti-smoking group Ash, said: "It is now
absolutely clear that vicious competition for cigarette sales in
developing countries has led BAT into the manipulation of illegal markets
through intermediaries.

"However they try to distance themselves from it, Clarke's incredible and
candid admission does mean that they are treating smuggling as a normal
part of tobacco business.

"Once they started down this route, they were inevitably led into the
kinds of controlling actions we see described in the memos released in the
Guardian."

The documents obtained from the firm's Guildford depository revealed
widespread exploitation of smuggling around the world.

BAT had previously claimed it merely turned a blind eye to smuggling but
the papers show it is central to the company's operation.

Mr Clarke went public after pressure from MPs for a statement. He said it
was "not in our wider commercial interests" but blamed governments
levelling high taxes on cigarettes for the trade.