BAT denies smoking claims

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BAT Industries, the beleaguered tobacco and financial services group, yesterday launched a searing attack on a magazine article that claimed to have finally demonstrated a direct causal link between smoking and lung cancer. Martin Broughton, chief executive, told City analysts and journalists "we have not concealed, we do not conceal and we will never conceal" in a last-ditch attempt to put a floor under BAT's tumbling share price.

He said: "We have no internal research which proves that smoking causes lung cancer or other diseases or, indeed, that smoking is addictive."

He said BAT supported independent research, with no restrictions on the publication of its results, and he warned that "there is still a lack of understanding of the mechanisms of diseases attributed to smoking".

Mr Broughton said: "We recognise that smoking has become a controversial subject, but I wish to stress that we are a responsible company and there is plenty of evidence to support that claim."

Analysts were surprised that Mr Broughton had gone so far in his claims about the lack of link between cigarettes and disease. They were especially surprised that he should deny that smoking cigarettes was addictive.

BAT's most vigorous defence to date of its position follows an escalation this year of the anti-smoking lobby's attacks on the tobacco giants. The company's US subsidiary, Brown & Williamson, is appealing against a $750,000 compensation order in favour of the widow of a Florida smoker, a judgement which has encouraged many other individuals to file cases against tobacco companies.

That, together with the prospect of the re-election of fervent anti-smoker Bill Clinton, has caused a slump in the value of BAT's shares since they peaked in January at 579p. After a further 7p fall yesterday, they closed at 429p, at which level the value of the group has fallen from almost pounds 18bn to just over pounds 13bn. The fall yesterday came despite a 9 per cent rise in group pre-tax profits for the nine months to September from pounds 1.87bn to pounds 2.04bn.

Investment column, page 22