BAT leads attack on anti-smoking laws

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Reynolds American, the cigarette maker part-owned by British American Tobacco, is contributing tens of millions of dollars to fight anti-smoking proposals in tomorrow's US elections.

In total, the tobacco industry is estimated to have ploughed more than $84m (£44m) into campaigns in six major states, including California, where voters are being asked to sharply raise cigarette taxes.

Plans to ban smoking in bars and restaurants are on the ballot in three states, piling yet more pressure on an industry which is fighting to find new customers in emerging markets to offset the decline of smoking numbers in the West.

Reynolds, in which BAT is the largest shareholder with a 42 per cent stake, has set aside almost $50m to fight the latest US measures, according to an analysis of publicly available campaign finance records. But Peter Fisher, vice-president of the Campaign for Tobacco-free Kids, said he believed most of the proposed measures would be passed, despite the anti-smoking lobby being heavily outspent on advertising and other campaign efforts.

"We have the truth on our side," he said, "and we have found that people want and like smoke-free environments everywhere from Florida to the west coast."

The most swingeing anti-tobacco measure on the ballot in tomorrow's mid-term elections is in California, which has had a state-wide smoking ban for more than a decade. Its Proposition 86 would raise tobacco taxes by $2.60 per pack of cigarettes, harvesting another $2bn annually from smokers to fund new and expanded health services, health insurance for children, and expanded tobacco use prevention programs. Backers, led by hospital corporations and anti-tobacco advocates, have raised $14m, while the industry has raised more than $60m to fund opposition campaigns.

Reynolds, through sponsorship of an organisation called the Californians Against Unaccountable Taxes, had spent more than $24m by the end of last month. A group led by Altria, the owner of Philip Morris, the world's largest cigarette maker, had spent $34m. The pair say Proposition 86 is "a money grab by huge hospital corporations" and their advertising spending is vital to prevent another unfair tax rise.

The industry is fighting to prevent tomorrow's ballots producing another series of milestones in the campaign to discourage smoking in the US, which has achieved smoking bans in a majority of states and significant increases in duty over the past decade. Tax increases are also on the ballot in Missouri and South Dakota, and there are smoke-free workplace referendums in Ohio, Arizona and Nevada. In each state, the industry has contributed millions of dollars to oppose the plans. In Arizona, Reynolds is spending more than $1.40 for every man, woman and child in the state.

In Arizona and Ohio, the industry is proposing an alternative to the smoking ban which would allow bar and restaurant owners to decide whether or not their patrons may smoke.

The tobacco industry could emerge as one of the big losers from the elections if these state-level initiatives go against it. The oil industry, too, is nervously awaiting the outcome of windfall tax proposals in California and the overall size of the shift from Republican to Democrat in Congress, where some Democrat politicians are arguing for new tax rises on the industry. If the Democrats win control of the House of Representatives, they have pledged an assault on the pharmaceuticals industry, to drive down drug prices by centralising purchasing of federally funded medicines for senior citizens.