New York state sues tobacco companies

Shares in BAT fell 11.5p to 484p after New York yesterday joined the rush by individual American states to launch high-profile lawsuits against the tobacco industry for allegedly covering up the addictive and medically hazardous nature of cigarettes.

After hesitating on the issue for months, New York Attorney General Dennis Vacco filed suit in the Manhattan State Supreme Court against six tobacco firms, including Brown & Williamson, which is owned by BAT Industries, Philip Morris, RJR Nabisco Holdings and the Liggett Group.

New York is the 20th US state, but also one of the biggest, to climb on board the lawsuits bandwagon. Each lawsuit accuses the tobacco companies of lying about the health risks of smoking and seeks to recoup public money spent on treating tobacco-related diseases.

Mr Vacco was reported to have made an attempt to negotiate an out- of-court settlement with the companies. While a figure of $395m was apparently floated, no agreement was reached.

A similar, though much more advanced, case involving Florida meanwhile took an unexpected turn after Philip Morris submitted records purportedly showing that in the 1970s the state manufactured its own, high-nicotine and filterless cigarettes within its prison system and distributed them free to inmates.