British Government To Probe BAT
LONDON (AP) - The government announced Monday that it will launch an investigation into allegations that British American Tobacco, the world's second-largest publicy traded tobacco company, orchestrated the smuggling of cigarettes.
Cigarettes.Stephen Byers, secretary of the Department of Trade and Industry, said he had ordered the investigation in response to a Parliamentary committee report unanimously recommending the probe.
``I have decided to appoint investigators to look into this and to report back to me as soon as possible,'' Byers said. ``I will then decide what further steps I must take and whether the facts support a reference to other authorities.''
In a statement, British American Tobacco said it was ``naturally disappointed'' by the move. It makes Kent and Lucky Strike cigarettes.
``We will, of course, cooperate fully with the investigators but will be making no further comments during the course of their work,'' the statement said.
In February, BAT deputy chairman Kenneth Clarke had sought to counter accusations that the company was involved in large-scale cigarette smuggling.
The accusations stemmed from research conducted by the group Action on Smoking and Health and investigative material aired by Britain's Channel 4.
According to the allegations, BAT's own internal documentation showed the company was involved in arranging and controlling cigarette smuggling in Asia and Latin America in the early 1990s via intermediaries.
Smuggling would enable a company to avoid government taxes and import fees.
Clarke, a former Conservative Party treasury chief, acknowledged to the House of Commons Health Select Committee that cigarettes were smuggled into markets such as Colombia, but insisted BAT was not involved.
``There is no evidence I have ever seen that BAT is a participant in this smuggling. We seek to minimize it and avoid it,'' Clarke said, calling BAT ``a company of integrity and a good corporate citizen.''
BAT chairman Martin Broughton also denied strenuously to the committee that his company was involved in any smuggling activity.
Clive Bates, director of Action in Smoking and Health, on Monday applauded the decision to investigate the tobacco giant.
``We think the evidence that BAT has been controlling and facilitating tobacco smuggling is overwhelming,'' Bates said.
``I think this will be a turning point in the fight against tobacco smuggling because the authorities will have the evidence that the tobacco industry itself is a major player in global smuggling,'' he said. ``While not doing the smuggling themselves, they are doing everything necessary to make sure smuggling happens in their commercial interests and on a very large scale.''