SUNS  4327 Thursday 19 November 1998

New York, Nov 17 (IPS/Farhan Haq) -- A $206 billion settlement unveiled by major U.S. tobacco companies will go towards paying for the health costs of smokers in the United States, but critics argue it will not help the new pool of smokers worldwide.

Analysts of international tobacco sales contend that the settlement announced Monday between four tobacco giants - R.J.R. Nabisco, Philip Morris, Brown and Williamson and Lorillard - and eight U.S. states does little to deal with the main problem: the huge expansion by those companies in overseas cigarette sales.

"There is not a single international tobacco-control measure in this deal," says Robert Weissman, co-director of Essential Action, a Washington-based group which opposes the big tobacco firms. "The attorneys-general who are backing this are making a mistake."

"It is irresponsible of the attorneys-general to let big tobacco (firms) off the hook," adds Karen Licavoli, associate executive director of the American Lung Association of San Francisco. "Any
settlement must protect public health both in the United States and abroad."

The deal's defenders contend that the settlement will provide $206 billion to states - the largest amount given in a civil suit ever - to help those states recoup money spent on health care for people
suffering from lung cancer, emphysema and other smoking-related ailments. More than 12 billion dollars, as well as two billion spent to build awareness about the dangers of smoking, will be
given in an initial lump payment, with the rest being distributed between now and 2025.

U.S. President Bill Clinton, who has criticised recent tobacco dealings with state attorneys-general as insufficient, nevertheless hailed the deal Monday as "an important step forward" and urged
Congress to legislate federal regulation of tobacco.

Attorney-General Christine Gregoire of Washington commented: "It's time to stop the legal bickering and move the tobacco fight out of the courthouse and into the streets." Her state is one of the eight
that accept Monday's settlement, the others being New York, California, North Carolina, Colorado, Oklahoma, North Dakota and Pennsylvania.

Yet although the money may help make up for the cost of providing health care to afflicted smokers in the United States in years to come, the new generation of smokers have no recourse, analysts say.

"The deal is a setback for international tobacco control," argues Ross Hammond, an economist who is the author of 'Addicted to Profit: Big Tobacco's Expanding Global Reach'. Says Hammond,
"Public health groups completely ignored this issue - it's the elephant in the room that nobody sees."

The United Nations predicts that annual deaths from tobacco-related disease will rise from 3.5 million today to 10 million by the year 2025, Hammond notes, with much of the current increase occurring overseas. Big firms like R.J.R. Nabisco and Philip Morris are expanding operations and joint ventures heavily in China, India, former Soviet republics, Thailand, Tanzania and Brazil, Hammonds says - although, he adds, no corner of the globe is immune.

"One of the key reasons the industry settled the case is to get peace at home while it can expand massively abroad," argues Weissman. Already, overseas smoking accounts for a little over R.J.R. Nabisco's and Philip Morris's total tobacco sales, he adds, with newly-prosperous Asian countries like China a particular target.

"The problem is that many of their old consumers die, so they have to keep searching for new consumers," Weissman says.

In the United States, that has meant targeting teenagers through catchy advertisements and promotional gimmicks, some anti-smoking groups - and President Clinton - have argued.

Although tobacco firms deny trying to recruit smokers among the young, the Monday settlement promises to prohibit some of the companies' attention-grabbing manoeuvres, including billboard
advertisements and T-shirts bearing company logos.

Yet even in the United States, the effects of the deal may be limited. The Financial Times notes that the cost of the settlement "will be passed on to smokers in the form of a surcharge - a tax in all but name - on the price of cigarettes". As a result of the settlement, U.S. cigarette prices are expected to rise from an average of 2.05 dollars a pack to 2.60 dollars.

That price increase may discourage some U.S. youths from picking up the smoking habit. But the tobacco firms have been aware for years that their fortunes in the U.S. market are in decline, says
Hammond. "The trend is that overseas is where the future lies," he contends.

Balanced against that threat is the growing awareness by developing nations that the long-term health costs of smoking might outweigh any benefits of taxing cigarette sales, Hammond argues. More countries are trying to restrict cigarette sales now than a few years ago, he says.

Similarly, the World Health Organisation and U.N. Children's Fund are beginning to move aggressively against smoking, Hammond adds. "We can only hope that the pro-tobacco forces in the United States won't try to hamstring the United Nations from doing the important work that needs to get done (in tobacco control)," he says.

The eight states that signed up for the settlement Monday may just be the tip of the iceberg among states wanting to join in the lucrative deal. Thirty-eight other states may also accept the
settlement this week, which would entitle them to share in the pot of money as long as they agree to drop any future civil lawsuits against the tobacco firms. Four states - Mississippi, Minnesota,
Florida and Texas - already agreed to an earlier, $40 billion settlement this year.