Tobacco deal in the US – the beginning of the end for Big Tobacco?



print
Saturday 21 June 1997
ASH News Release – 21 June 1997

ASH welcomed the $368.5 billion settlement as the beginning of the end for Big Tobacco.

“The tobacco lobby boasted for many years that they had not paid a penny in damages, and this settlement changes all that. There should be no doubt now that cigarettes are a lethal addictive drug and that the tobacco business will never be the same again.” said Clive Bates, Director of ASH – Action on Smoking and Health.

The agreement runs to seventy pages (ASH has a summary ). It involves:

  • payments to States to compensate for Medicaid ($308 billion over 25 years),
  • a sum in lieu of punitive damages for past misconduct ($60 billion)
  • funding includes $25 billion trust and $1.5 billion/year for public health programmes.
  • regulation of nicotine as an addictive drug with a possibility of a nicotine ban after 2009
  • settlement of all State Medicaid cases and no future punitive damages for past misconduct.
  • no restrictions on the right of individuals to sue for compensatory damages, but costs to tobacco companies to be limited to $5 billion per year
  • agreement tobacco control policy that severely limits marketing activities, reduces access to tobacco, adds new stronger health warnings, bans vending machines, monitors corporate behaviour, sets targets for reducing youth smoking and penalises

But ASH stressed the difference between the US and UK. In the UK many of the positive aspects of the settlement can be realised by a committed Government without any deal. The Labour Government has said it will ban tobacco advertising and promotion and introduce a tough tobacco policy. In the UK we already raise large sums from tobacco taxation – the settlement amounts to about $15 billion per year this compares with total tobacco taxation receipts for the UK of just over £10 billion. The Government could also regulate nicotine under the Medicines Act and phase it out. However, the litigation side of the settlement is relevant. There are cases against tobacco companies in the UK (47 victims begin action on 1st July). For these and many other sufferers, the companies must now consider a UK settlement.

“The UK Government doesn’t need a deal to clamp down on tobacco. But for UK victims of tobacco-related disease and their families, the tobacco settlement offers new hope. People or organisations that have been harmed by cigarettes should consider coming forward – the tobacco companies should now expect repeated failures in court and get ready to pay for a big UK settlement.” said Clive Bates.

A summary of the US settlement is available.

ENDS

 


For more information contact:

Clive Bates, Director (020) 7739 5902
Amanda Sandford, Communications Director (020) 7739 5902
ASH News Release – 21 June 1997

ASH welcomed the $368.5 billion settlement as the beginning of the end for Big Tobacco.

“The tobacco lobby boasted for many years that they had not paid a penny in damages, and this settlement changes all that. There should be no doubt now that cigarettes are a lethal addictive drug and that the tobacco business will never be the same again.” said Clive Bates, Director of ASH – Action on Smoking and Health.

The agreement runs to seventy pages (ASH has a summary ). It involves:

  • payments to States to compensate for Medicaid ($308 billion over 25 years),
  • a sum in lieu of punitive damages for past misconduct ($60 billion)
  • funding includes $25 billion trust and $1.5 billion/year for public health programmes.
  • regulation of nicotine as an addictive drug with a possibility of a nicotine ban after 2009
  • settlement of all State Medicaid cases and no future punitive damages for past misconduct.
  • no restrictions on the right of individuals to sue for compensatory damages, but costs to tobacco companies to be limited to $5 billion per year
  • agreement tobacco control policy that severely limits marketing activities, reduces access to tobacco, adds new stronger health warnings, bans vending machines, monitors corporate behaviour, sets targets for reducing youth smoking and penalises

But ASH stressed the difference between the US and UK. In the UK many of the positive aspects of the settlement can be realised by a committed Government without any deal. The Labour Government has said it will ban tobacco advertising and promotion and introduce a tough tobacco policy. In the UK we already raise large sums from tobacco taxation – the settlement amounts to about $15 billion per year this compares with total tobacco taxation receipts for the UK of just over £10 billion. The Government could also regulate nicotine under the Medicines Act and phase it out. However, the litigation side of the settlement is relevant. There are cases against tobacco companies in the UK (47 victims begin action on 1st July). For these and many other sufferers, the companies must now consider a UK settlement.

“The UK Government doesn’t need a deal to clamp down on tobacco. But for UK victims of tobacco-related disease and their families, the tobacco settlement offers new hope. People or organisations that have been harmed by cigarettes should consider coming forward – the tobacco companies should now expect repeated failures in court and get ready to pay for a big UK settlement.” said Clive Bates.

A summary of the US settlement is available.

ENDS

 


For more information contact:

Clive Bates, Director (020) 7739 5902
Amanda Sandford, Communications Director (020) 7739 5902