[Intl-tobacco] More on BAT-Vietnam Joint Venture (fwd)

[Robert Weissman]

BAT clinches Vietnam deal
The Guardian
Special report: BAT expos=E9

Mark Tran
Friday August 24, 2001

British American Tobacco today clinched the right to form a $40m (=A328m)
joint venture with the state-owned Vietnamese tobacco firm, Vinataba, two
months after Kenneth Clarke, the Tory leader hopeful and BAT deputy
chairman, visited Vietnam.
BAT, the world's second largest tobacco company, has denied any connection
between the two events. "It was purely coincidental. Mr Clarke was in
Vietnam for a regional audit in June," a BAT official said. "The meeting
happened to be held in Vietnam, but equally might have been held in any par=
t
of the region."

Previously, BAT said that Mr Clarke was "made aware" of the joint venture
proposals and attempts by BAT to win government support for the project. Bu=
t
BAT insisted the former chancellor, who has never hidden his enjoyment of
smoking, had no involvement in the project.

Mr Clarke, embroiled in an increasingly vicious battle for the Tory
leadership, caused a few raised eyebrows when he skipped the state opening
of parliament in June to attend a meeting of BAT's Asia regional audit
committee.

One Tory colleague said at the time: "Only Ken could run for the Tory
leadership while sitting in Hanoi peddling cigarettes to the Vietnamese. An=
y
of the rest of us selling ciggies to the third world would be torn apart by
the press." BAT and Mr Clarke have said little about any meetings Mr Clarke
held with Vietnamese government officials.

Vietnam has one of the highest rates of tobacco consumption among males in
the world. A report by the World Health Organisation claimed that as many a=
s
10% of Vietnam's 78m population would die young from smoking-related
illnesses.

Anti-smoking activists denounced BAT's latest Asian foray. "It's a sad day
for Vietnam. BAT's presence will undermine government attempts to reduce
appallingly high levels of smoking and will result inevitably in more
illnesses and deaths from smoking," said an Action on Smoking and Health
(Ash) official, who dismissed as laughable BAT's denial of any connection
between today's announcement and Mr Clarke's Vietnam trip.

Health officials in Vietnam have been trying hard to cut down smoking rates=
,
particularly among young boys. Campaigners fear that once BAT establishes a
presence, it would use its marketing and political clout to undermine
anti-smoking efforts. Ash foresees a major BAT marketing drive targeted at
Vietnamese women, few of whom smoke.

The deal announced today is the first such agreement between Vinataba and a
foreign partner. The company said the joint venture was aimed at "developin=
g
Vietnam's tobacco growing industry to international standards". Under the
agreement, the joint venture will build a tobacco processing plant in Dong
Nai, a province south of the capital, Ho Chi Minh City. Once completed, the
plant will be the most modern tobacco-processing factory in Vietnam. It wil=
l
not manufacture cigarettes.

BAT was granted a licence to operate a branch in Vietnam in 1994 to
distribute State Express 555, which are ubiquitous in the country, and
Dunhill brands manufactured by Vinataba. BAT's joint venture in Vietnam is
the company's latest move into Asia.

BAT, whose brands include Dunhill and Lucky Strike, said earlier this month
it would break into the South Korean tobacco manufacturing market with a
$1.1bn investment. The company already has a presence in Malaysia.

Earlier this week, the Department of Trade and Industry received new
documents unearthed by the Guardian following its report of new evidence
about the role of BAT in cigarette smuggling. The documents from the
whistleblower Alex Solagnier concern the role of BAT's little-known Swiss
subsidiary, BAT International, which is accused of being the hub of a globa=
l
trade in contraband cigarettes.