Tobacco stocks slide after RJ Reynolds hit with $23.6bn fine

21st Jul 2014 17:01

London-listed tobacco stocks slid after a US jury imposed punitive damages against RJ Reynolds Tobacco Company.America's second largest cigarette company was told by a Florida court to pay a punitive fine of $23.6bn and $16.8m in compensatory damages to the wife of a smoker who died of lung cancer.Cynthia Robinson filed the lawsuit against the firm in 2008, seeking compensation for her husband's death in 1996. Lawyers for Robinson argued that RJ Reynolds was negligent in informing consumers of the dangers of consuming tobacco."RJ Reynolds took a calculated risk by manufacturing cigarettes and selling them to consumers without properly informing them of the hazards," Robinson's lawyer Willie Gary said, according to the BBC."We hope that this verdict will send a message to RJ Reynolds and other big tobacco companies that will force them to stop putting the lives of innocent people in jeopardy."RJ Reynolds Vice President and Assistant General counsel Jeffery Raborn said the group plans to appeal against the court's decision.Raborn said the verdict went "far beyond the realm of reasonableness and fairness" and was "completely inconsistent with the evidence presented"."We plan to file post-trial motions with the trial court promptly, and are confident that the court will follow the law and not allow this runaway verdict to stand," he added.Shares in British American Tobacco and Imperial Tobacco declined on the FTSE 100 following the news, closing down 0.91% and 1.49% respectively.RD