Hanson sheds light today on demerged tobacco division

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The Independent Online
Hanson will announce details of the planned demerger of Imperial Tobacco to shareholders later today, pressing ahead with the cigarette maker's return to the stock market in the face of increasing turbulence in the sector.

Details of the company, which are expected to include a notional dividend for the year to September, will try to soothe investor concerns following the support of President Bill Clinton at the end of last week for a shift in the regulation of the tobacco industry to the Food and Drug Administration.

The industry is already under attack from a series of law suits and shares in companies with large US operations, including BAT, have fallen sharply in recent weeks. The Clinton ruling threatens to impose strict limits on advertising, a curb on the sale of cigarettes through vending machines and a drive to stamp out under-age smoking to be funded by the tobacco companies themselves.

Some of those companies spoke out yesterday, criticising President Clinton's move. BAT, which operates in the US largely through its Brown & Williamson subsidiary, said it would "vigorously oppose" moves to place it under the FDA's regulatory control.

"Congress makes the laws. It has spoken on tobacco and has repeatedly not granted FDA authority to regulate cigarettes."

RJ Reynolds, part of RJR Nabisco, also criticised the government's move: "While it is appropriate for the federal government to provide direction on the issue of under-age smoking, the [individual] states should be responsible for implementation," it said.

In New York, Philip Morris criticised what it called the FDA's "specious and arbitrary" interpretation of federal law. The company said it shared President Clinton's goal of reducing under-age tobacco use.

"Our position on this issue is clear: kids should not smoke, nor should they have access to tobacco products. We remain committed and willing to work with the President, the Congress and others for the swift enactment of comprehensive federal legislation to address the issue of youth smoking."

But it added that the FDA rule on regulatory control "opens a Pandora's box of regulation that tramples on the Constitution and the rights of millions of adult Americans ... We will stand by those adults who choose to smoke."

Hanson will also issue a demerger document for Millennium, its chemicals arm, today. It and Imperial are expected to start trading in October.