Tobacco could face a deluge of demages claims in Brazil after a judge
ruled against the cigarrette giant in a class action lawsuit.
The Sao Paulo ccurt has found in favour of the Association for the
Defence of the Health of Smokers, which first lauched the case nearly
nine years ago. It was suing both Souza Cruz, BAT´s Brazilian
operation, and Philip Morris, the US per cent.
the judge said the two companies should compensate people who
sustained any damage resulting from the consumption of cigarretes and
the lack of information about addiction. He did not estabilish an
The lawsuit claimed cigarette advertising was misleading and thejudge
also ruled that the manufacturers had 60 days to change their packs.
He said they must ensure packs carried more information, including the
chemical composition of cigarettes and the "risk or harmfulnrss of the
However, a BAT spokesman countered that this was not the manufacturer´s
responsability and that the company had always obeyed government
guidelines on pack warnings.
He also played down the significance of the ruling: "Is it a threat?
No. Even after eight and half years, it´s still early days." He added
that of the 377 cases brought against tobacco firms in Brazil since
1995, the manufacturers had lost only eight. "It´s a minority and we
would hope to win on appeal.
It is currently not clear how much how money BAT would have to pay out
in compensation if it lost its appeal, as the number of plaintiffs
within the lawsuit has not been verified.
Tobacco litigation has brighted cigarette companies over recent years,
particularly in the US. Smokers, many of whom have contracted
smoking-related diseasessuch as lung cancer, have claimed that the
manufacturers did not warn them of the dangers of smoking.
In some cases, the companies have also been accused of deliberately
withholding evidence about the dangers. US courts have awarded bilions
of dollars in compensation, though the manufacturers continue to
BAT, with a market value of £16.9bn, sells more than 300 brands
worldwide including Benson & Hedges, Lucky Strike and Kent. Full-year
results from the company, due out later this week, are expected to
show an increase in cigarette volumes and a 3.6 per cent rise in
operating profits to £2,78bn.