FTC Urged to Consider Allegations of British American Tobacco Corruption Before Approving Proposed Merger with Reynolds American

Feb. 3 2017

WASHINGTON, D.C. – The Campaign for Tobacco-Free Kids is calling on the Federal Trade Commission to oppose a proposed merger between British American Tobacco (BAT) and Reynolds American (RAI)  until allegations of corrupt and anti-competitive conduct by BAT in Africa are fully investigated.

In a letter to the FTC, Tobacco-Free Kids detailed allegations made during 2014-2015 by four BAT insiders – two former BAT employees and two former insiders working on behalf of BAT in South Africa – that included bribery of government officials and corporate espionage against competitors in Africa. The allegations have been reported by the media and are reportedly supported by leaked documents, secret recordings and court documents.

“It is alarming that a company that may have acted with blatant disregard for the law outside U.S. borders may be entering the U.S. market as the largest tobacco company in the world. Therefore, we urge the FTC to oppose the proposed merger until BAT’s alleged anti-competitive behavior has been fully investigated and resolved by all appropriate authorities, in the U.S. and abroad,” the letter states.

On January 17, BAT reached a $49 billion deal to take over the share of RAI it did not already own. If approved, the deal would create the world’s largest publicly traded tobacco company and give BAT full ownership of a U.S. tobacco company for the first time since 2004.

In addition to urging the FTC to consider the recent allegations of foreign corrupt anti-competitive conduct by BAT, Tobacco-Free Kids also called on the FTC to closely scrutinize the proposed merger “because of the leading role played by both BAT and RAI in perpetrating the decades-long conspiracy that has made tobacco the leading preventable cause of death in the United States.”

A lengthy attachment to the letter summarizes additional domestic and foreign misconduct by these companies, including findings by a U.S. federal court of their unlawful conspiracy with other U.S. tobacco companies to defraud the American people about their deadly products.

Tobacco use claims nearly 500,000 American lives every year. Smoking kills more Americans than alcohol, AIDS, car accidents, illegal drugs, murders and suicides combined.

 

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