British American Tobacco

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This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

The British American Tobacco Company (BAT or BATCO) is the second largest listed tobacco company in the world, with a market capitalization of over £30 billion (U.S. $44 billion). It is based in London in the United Kingdom. In1999 they acquired Rothmans International.

It began operating in 1902 as a joint venture of the Imperial Tobacco Company and James Duke's American Tobacco Company (a tobacco trade cartel), and grew to be the major cigarette company in many countries -- but not in the USA or in the UK, where each of the partner organizations had agreed not to compete with the other.

During the trust-busting era of President Theodore Roosevelt, the American Tobacco Company was forced to divest its interest, and in the years that followed. Imperial Tobacco also reduced its shareholdings. Eventually BAT became a relatively independent organization, that out-grew its parent.

BAT Industries

The international remnants of the original company were reorganized into a holding company called BAT Industries in 1976, and it acquired what was left of the American Tobacco Co. after the anti-trust split-up. The main assets of the US company were the brands Lucky Strike and Pall Mall. BAT later acquired Brown & Williamson (B&W) which, at that time, was the largest cigarette company in the USA. BAT's US subsidiary retained a degree of independence from the UK, although clearly it must report to the London office -- and occasionally they exerted their own pressure.

BAT is based in London and has subsidiaries in the UK, Europe, Asia and the old British colonies. In 1999 it acquired the South African-based company of Rothmans International after a long battle with Philip Morris for control. It has also since acquired Italy's state tobacco company, Ente Tabacchi Italian (ETI). The company has also diversified into many other industries -- owning, for instance, a major life insurance company, food and beverage companies, etc. The acronym BATCO is often used when referring to this larger conglomerate.

With tobacco, the holding company in the USA is known as BATUS (headquartered in Louisville, Kentucky) while Brown & Williamson maintained its own name. In many documents in the tobacco archives it is known simply as B&W.

More recently, following the revelations of tobacco industry subterfuges and illegal activities, B&W was split off from BAT and sold to R.J. Reynolds Tobacco Company.

Recent manipulative activities

Under the Master Settlement Agreement signed in the USA in 1998, all U.S. tobacco companies (including BAT and its then-subsidiary B&W), agreed not to become involved in science manipulation and underhanded public and lobbying activities. It appears the company has failed to abide by these rules.

In 2004, it was revealed that that BAT has spent millions of pounds funding university research to back the controversial theory of "genetic predisposition," which argues that some people are more susceptible to lung cancer than others because they have "bad genes." The environmental group Gene Watch has obtained internal memos from BAT showing that research into "bad genes" was by far BAT's largest area of university funding in the early 1990s. A 1996 memo from the public relations company Burson-Marsteller to BAT's rival, Philip Morris, suggested a test kit would allow "the non-susceptible population to smoke with a clear conscience."[1]

In 2004, even after being ordered at least three times by the U.S. District Court in the District of Columbia to release a 1990 memorandum, BAT refused, claiming attorney-client privilege. The so-called "Foyle memorandum" was written by British lawyer Andrew Foyle and concerns the company's "document retention policy." U.S. government lawyers contend that the memo contains evidence that BAT and other tobacco companies "took steps to destroy, suppress or otherwise shield from discovery its internal research documents concerning smoking and health."[2]

The U.S. government wanted to use the document in its federal lawsuit against the tobacco industry, as "key evidence of the government's central claim ... that the tobacco companies defrauded the public by concealing the health risks of smoking for more than five decades." The lawsuit was scheduled to go to court September 21, 2004. However, in the words of U.S. District Judge Gladys Kessler, BAT's "dilatoriness and delay" and its "inexcusable effort to subvert the discovery process" by stonewalling and legal challenges, delayed any potential release of the Foyle memo until after the U.S. lawsuit. After 6 years of litigation, 9 months of trial, hundreds of depositions and thousands of exhibits, on August 17, 2006, Judge Gladys Kessler ruled that the Government had proven its case and found that the tobacco company defendants have violated the Racketeer Influenced Corrupt Organizations Act (RICO).[3][4]

BAT's secret plant in North Korea

"British American Tobacco, the world's second largest cigarette company, has secretly been operating a factory in North Korea for the past four years," reports the Guardian, though "BAT has never mentioned the factory in its annual accounts."[5]

When asked about North Korea's human rights record -- Amnesty International has reported on the torture and execution of detainees, and a "basic lack of political freedom" there -- a BAT spokesperson said, "It is not for us to interfere with the way governments run countries." Moreover, she said, BAT could "lead by example" by promoting international business standards and corporate social responsibility.

The revelation further complicated British politician Kenneth Clarke's candidacy to head the Conservative Party. Clarke has worked for BAT since 1998, chairing their corporate social responsibility committee. BAT confirmed that Clarke knew about its North Korean factory, since he reviews "human rights reports on all countries where we operate."

BAT Australia butting in to butt out campaign

According to a report in the Sydney Morning Herald, an organization called the Butt Littering Trust, (funded mainly by BAT), has been running a series of educational campaigns to clean up cigarette butts in partnership with some local councils. [1]

"The trust maintains it is independent of BAT Australia, its main sponsor, even though Valerie Ritchie, head of public relations at BAT Australia, sits on its board of trustees.

"North Sydney Council started an anti-littering campaign partly funded by BAT Australia via the trust yesterday. People wearing costumes representing marine animals threatened by cigarette butt pollution approached smokers in the street. They were asked to fill in questionnaires and given portable ashtrays," according to the Herald.

The chief executive of Action on Smoking and Health Australia, Anne Jones, said North Sydney and other councils had been advised by letter of the Butt Littering Trust's connections to BAT Australia.

"Tobacco companies want to be seen to be involved in stopping the littering. .. They can say 'Look, we are doing something about it' when they're actually the source of the problem."

Tobacco industry documents

CLAIM 1: Smoking has been proven to cause disease.

RESPONSE: There is still a controversy about smoking and health. Although there is a 'statistical association' between smoking and certain diseases, which means that smokers are more likely to develop lung cancer than non-smokers, smoking has not be proven to actually cause the diseases. The cause could equally be one of the many other things that smokers do that makes them different from non-smokers. Smokers have been reported to have quite different lifestyles from non-smokers. For example, smokers have poorer, high-fat diets than non-smokers. It has also been suggested that this may explain the elevated risk of heart disease in smokers.

CLAIM 2: It is not credible simply to state that smoking does not cause these diseases.

RESPONSE: We are not saying that smoking does or does not cause these diseases; we are saying we do not know. (See also previous response.)

"All this implies that nicotine is our ultimate product. People must regard nicotine as an ideal "coping" substance. Comparing a few common drugs:

*alcohol: the disadvantages of alcohol are that it can be socially disruptive and can kill others as well as ourselves.

*caffeine: this controls only certain aspects of mood; it can only lift.

*nicotine: can either boost people, or calm them down. It has a short half life in the body (2 hours). It is a unique drug and provides the user with immediate help, which no other drug can. It is not associated with any adverse ill effects. Although very high doses can kill, in smoke it provides its own safety valve. It is a "coping" aid needed by a proportion of the population. We must reduce the amount of tar associated with nicotine; we need to do research on the safety of nicotine and convince the public of its safety and desirability ...

  • Defense on Cigarette Smoking -- A Review Report No RD 1532 Report by A. Kay Comer, British-American Tobacco. Reveals BAT's knowledge of the close relationship between nicotine-taking and other drug-taking behaviors (both legal and illegal). An important conclusion reached by BAT is that "... there is a higher proportion of smokers amongst drug addicts and alcoholics than in the general population ..." The paper also helps explain why it is so much easier for large numbers of people to become addicted to nicotine than almost any other drug: Often other drugs (barbiturates, morphine, etc.) are taken as a response to difficulties, like loneliness or other negative stressors. By contrast, nicotine is freely self-administered in response to more widely varied stimuli, e.g., concerts, parties, while driving or simply talking over coffee. There are also far more opportunities to use nicotine than any other drug of abuse. Also, most other drugs require a method of administration that is seen as less acceptable in social settings (e.g. pill taking, intravenous injection) while smoking has long been considered acceptable, and even appropriate at concerts, parties, dinners etc. Also, while other drugs of abuse impair the user to some extent, nicotine users can still function socially after (or even while they are) using.
  • Untitled BAT planning document, estimated date June, 1959. States that smokers need an "adequate dose of nicotine" to maintain the smoking habit, and says BAT needs to devise "means of making smaller amounts of nicotine work harder."

In 2003, it was reported that in past years BAT had been so concerned that it would lose market share to hard drugs such as cocaine and heroin that it had examined a series of strategies aimed at giving its products a more "rebellious" image in a bid to make them more attractive to youngsters. A 1985 internal presentation made to BAT employees shows that during the 1980s the company became concerned that the burgeoning illegal drugs market could eat into its profits and considered ways to slow the progression of the damage. The document, called Structured Creativity Group Presentation, was written by senior BAT adviser David Creighton, and predicted that cigarettes would face "competition with cannabis, glue-sniffing and possibly hard drugs - heroin and cocaine."

Case Studies

Subsidiaries

Key Personnel

References

  1. ↑ Jamie Doward, Social Affairs Editor [http://observer.guardian.co.uk/uk_news/story/0,6903,1227918,00.html Tobacco giant funds 'bad gene' hunt: Secret memos show BAT has spent millions on studies playing down cigarette link to cancer] News/Society, UK Guardian. May 30, 2004
  2. ↑ Wall Street Journal Secret Memo Sought by U.S. In Tobacco Suit September 13, 2004
  3. ↑ Wall Street Journal Secret Memo Sought by U.S. In Tobacco Suit September 13, 2004
  4. ↑ William McQuillen and Susan Decker Cigarette Makers Lose in U.S. Racketeering Lawsuit (Update6), Bloomberg news, August 17, 2006
  5. ↑ Ian Cobain and David Leigh Tobacco firm has secret North Korea plant UK Guardian, UK News, October 17, 2005

Other SourceWatch resources

External resources

British American Tobacco Documents Archive Searchable database of approximately 7 million pages of BAT documents

External links

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