UPDATE: EU,BAT Sign Accord To Fight Illegal Tobacco Trade

15th Jul 2010 15:56

(Adds details) By Alessandro Torello and David Tidmarsh Of DOW JONES NEWSWIRES BRUSSELS (Dow Jones)--The European Commission and British American Tobacco PLC (BTI) signed an agreement Thursday aimed at tackling the illegal tobacco trade, which costs the European Union an estimated EUR10 billion annually in unpaid taxes. The deal includes a $200 million payment from the U.K. company over the next 20 years to finance the fight against counterfeit cigarette smuggling. EU law enforcement officials will deepen EU-wide cooperation and share intelligence with BAT in order improve success rates in intercepting counterfeiters. BAT, for its part, will scrutinize its customers more closely, cutting off supplies to any knowingly involved in the trade, and adding barcodes to master cases of 10,000 cigarettes as well as source and destination information to improve tracking techniques. The EU has previously concluded similar agreements with Japan Tobacco International (2914.TO) and Philip Morris International (PM). Some 75 billion cigarettes are smuggled within Europe every year, more than are sold annually in countries such as Spain and the U.K., according to BAT executive Jack Bowles. It is the largest fraud on the continent, Bowles adds. -By Alessandro Torello and David Tidmarsh, Dow Jones Newswires; +32 2 741 14 88; [email protected] (END) Dow Jones Newswires July 15, 2010 10:56 ET (14:56 GMT)