Cigarette smuggling: EU takes legal action against Big Tobacco

Thursday 20 July 2000


Press release

For immediate release, 20 July 2000


Cigarette smuggling: EU takes legal action against Big Tobacco

Responding to news that the European Commission has decided to sue a number of tobacco companies over tobacco smuggling, Clive Bates, Director of ASH said:

“This puts the theory that the tobacco companies control and facilitate cigarette smuggling firmly into the mainstream. They profit from smuggling by having cheap cigarettes on the market to keep smokers hooked, undermining tobacco tax policies and launching new brands at rock bottom prices.”

“About one third of internationally traded cigarettes – 350 billion cigarette – are diverted into the hands of smugglers each year. It’s such a massive racket, it’s impossible to believe the tobacco companies themselves are not orchestrating at the wholesale level. Having seen thousands of their internal documents we now have powerful evidence of the tobacco companies complicity in cigarette smuggling.

“Tax and fraud officials around the world are starting to ask if they can recover the billions in lost revenue caused by tobacco smuggling from the tobacco companies that have orchestrated it.”

Implications for the UK – ASH has been calling for a DTI investigation into BAT and tobacco smuggling since January this year after releasing comprehensive evidence of BAT’s controlling involvement in smuggling [1]. This was echoed on 14 June by the Health Select Committee which called for the DTI to investigate the claims. The Secretary of State, Stephen Byers, has indicated his willingness to consider an investigation – a final decision will be made when the Government responds to the Health Select Committee in August. BAT may not be involved in the EU action because its US subsidiary does not sell much to the EU – that is a mainstream UK-based BAT activity. There is no jurisdiction in the UK to take similar actions against BAT even though the evidence is compelling – the relevant Act, the Criminal Justice (Terrorism and Conspiracy) Act 1998 came in to force in 1999 and all the evidence we have pre-dates this.

“The EU action strengthens the case for the DTI to investigate British American Tobacco under the investigative powers of the Companies Act. Just because there is no obvious way to take BAT through the English courts, it doesn’t mean they haven’t been doing exactly what the American companies are accused of by the European Commission.” said Bates.

Bates added: “The DTI should have them on the rack for that.”

[1] See for more information on smuggling

Contact: Clive Bates, 020 7739 5902(w) — 07786 791237 (m) 020 8800 1336(h)