ONE of the world’s largest tobacco producers deliberately encouraged cigarette smuggling in developing countries to offset its dwindling profits in Europe, according to research.

Studies by experts from the London School of Hygiene and Tropical Medicine claim that British American Tobacco used smuggling as part of its corporate strategy to expand into lucrative markets in Asia.

Confidential documents from BAT’s depository in Guildford, suggest that the company used the illicit trade in cigarettes to lure new smokers, undermine health initiatives and help it to capture key markets.

The studies, published today in the journal Tobacco Control, come in the wake of a four-year confidential inquiry by the Government that cleared BAT of allegations that it colluded in cigarette smuggling.

More than eight million documents relating to BAT’s affairs had to be made available to researchers for a period of ten years as part of the settlement of a US health suit.

Public health experts and anti-smoking campaigners have claimed that BAT, which makes Lucky Strike cigarettes, condoned tax evasion and colluded in the smuggling of billions of cigarettes in a global drive to increase sales.

The allegations do not suggest that BAT employees carried out the smuggling themselves. But it has been alleged that executives in Britain and abroad controlled the brands, marketing campaigns and timing, and sought to manage volumes and price levels of smuggling markets.

The researchers said that the articles raised serious questions about corporate conduct and how smuggling had become a business strategy rather than the enterprise of rogue traders.

Examples of collusion in smuggling cited by the authors include repeated reference to “general trade” — a euphemism for contraband — that was allegedly shipped in to target countries by third parties linked to BAT.

One study describes how BAT allegedly exploited contraband in China, where the Government maintains a firm grip over foreign investment and trade, to get around import quotas. Cigarettes were often brought into China illegally via Hong Kong, it concludes.

Other documents revealed how BAT gained privileged access to Tony Blair and Stephen Byers, the former Trade Secretary, shortly before the smuggling allegations inquiry.

A spokeswoman for BAT said that suggestions that the company was targeting Asia because of declining fortunes in Europe was ignorantly rewriting the company’s history. “The DTI concluded its investigation into similar allegations and stated there was no evidence to support claims that we have been involved in illegal activity,” she said.

A DTI spokeswoman said that the Government was satisfied with its scrutiny of BAT’s operations.

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