Table of Contents
- ITCAN said: “Today an important step is taken towards a possible solution”
- Like other nicotine sellers, BAT is expanding its offering of “new categories”
A subsidiary of British American Tobacco (BAT) is close to settling a long-running tobacco litigation case in Canada.
Imperial Tobacco Canada (ITCAN) has been in talks with creditors since losing an appeal in March 2019 against a ruling that ordered the company and two other cigarette sellers, Philip Morris and Japan Tobacco, to pay C$15.6 billion in damages. and damages.
The appeal concerned a landmark court ruling four years earlier that found the three companies had not sufficiently warned customers about the health problems associated with smoking.
Legal issues: A subsidiary of British American Tobacco (BAT) is close to settling a long-running tobacco litigation case in Canada
It is believed to be one of the largest class-action lawsuits ever filed in Canada, affecting more than one million smokers in Quebec who have failed to quit smoking or suffered serious illnesses from smoking.
After losing the appeal, ITCAN filed for bankruptcy protection under the Canadian Business Creditors Arrangement Act while it worked to resolve all tobacco-related litigation in Canada.
According to Philip Morris, a court-appointed mediator has now proposed that the companies pay a compensation bill of C$32.5 billion ($23.6 billion), although the exact amount each company will pay is not yet known.
ITCAN said: ‘Today marks an important step towards a possible agreement.
“Since applying for CCAA protection in 2019, ITCAN has been working in good faith under the direction of the mediator to resolve all tobacco-related disputes in Canada.”
He added: ‘ITCAN supports the framework and structure of the agreement in the mediator and monitor settlement plan and the progress that has been made, and we remain hopeful that a comprehensive agreement can be quickly achieved.
“We look forward to working toward a final agreement that is in the best interests of all interested parties, including plaintiffs, and bringing this process to a successful conclusion.”
Like other nicotine sellers, BAT is gradually expanding its offering of “new categories” in response to increased public awareness about the harms of tobacco.
By 2030, it wants 50 million people to use its non-combustible products, such as e-cigarettes, heated tobacco brands and modern oral products.
In the first six months of 2024, the company’s adjusted revenue from new categories increased 3.1 percent to £1.7 billion, driven by strong demand among US customers for its Velo nicotine pouches.
However, its total adjusted sales fell 3.7 percent to £12.3 billion, while reported revenue fell 8.2 percent due to foreign exchange headwinds and the sale of its divisions in Russia and Belarus.
British American Tobacco Shares They fell 3.1 per cent to £26.43 in early Friday afternoon, making them the biggest faller on the FTSE 100.
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