[Intl-tobacco] Litigation woes hit European tobacco stocks (fwd)

[Robert Weissman]

Note this is prior to the Engle decision:

Litigation woes hit European tobacco stocks
Source: Reuters, Monday, 4/3/00
Monday April 3, 12:59 pm Eastern Time

LONDON, April 3 (Reuters) - European tobacco stocks lost ground on Monday
as new litigation risks emerged in Spain and doubts spread about a
landmark smoking case in Florida.

At 1615 BST, with European equities broadly lower, the Eurotop 300 tobacco
index was down 5.4 percent, giving back most of the gains it made last
week off a 17-month low.

Cigarette giant British American Tobacco (quote from Yahoo! UK & Ireland:
BATS.L) was off 5.9 percent in London at 325 pence per share.

In addition to profit-taking, industry analysts said BAT was down on new
doubts about the introduction of a proposed measure in the Florida
legislature that could blunt the impact of potentially damaging U.S.
anti-smoking litigation.

Last week it was reported that Florida State Attorney General Robert
Butterworth was considering introducing legislation to effectively put off
fixing punitive damages in the pivotal Engle sick-smokers case.

The three-year-old case, a focus of intense concern in the tobacco
industry, has reached a key phase in Miami. Speaking during closing
arguments, smokers' attorney Stanley Rosenblatt denounced the Butterworth
proposal as ``outrageous.''

Tobacco stocks worldwide moved up on reports of the proposal, but analysts
said Monday it had yet to be seen, raising new doubts about whether it
will be introduced at all.

``In an election year, I can't quite see the typical Florida assemblyman
being willing to stick his head into this particular hornet's nest,'' said
HSBC Securities tobacco analyst Nick Bunker.

Despite BAT's weakness, U.S. tobacco giant Philip Morris (NYSE:MO - news)
was up 3.8 percent in early New York trading.

Actions such as the Engle case, expected to go to a jury this week, have
clouded the outlook for tobacco stocks for years and a new one may have
emerged in Spain on Sunday.

Lawyers representing 2,000 victims of cancer of the larynx are preparing
to file the first collective lawsuit against the Spanish tobacco industry,
the newspaper El Pais reported.

If the case proceeds, it could open a new litigation front for European
tobacco companies, which have so far avoided the massive legal problems
hammering their U.S. competitors.

Franco-Spanish cigarette group Altadis was down 3.8 percent in Madrid and
3.3 percent in Paris.

British cigarette group Imperial Tobacco (quote from Yahoo! UK & Ireland:
IMT.L) was also down, by 6.6 percent, although analysts were hard-pressed
to explain the decrease on thin volume.