US tobacco talks stall as BAT voices concerns

The high-stakes negotiations for a truce in the tobacco litigation wars in the United States may have become snagged on fears expressed by British American Tobacco on the long-term consequences of a deal for its world- wide business.

The marathon talks between the attorneys general of some 36 states suing the industry to recoup the costs of treating smoking-relating diseases and representatives of the companies themselves broke up unexpectedly late on Tuesday. It is unclear when they might resume.

Under way since early April, the negotiations are aimed at reaching an agreement under which the companies would be protected from unlimited numbers of lawsuits in return for paying out as much as $300bn (pounds 183bn) for the establishment of a standing smokers' compensation fund.

Sources said that worries have mounted inside the industry camp over a critical element to the deal that would recognise the right of the Food and Drug Administration to regulate the levels of nicotine in tobacco products. The logical conclusion could be a ban on nicotine as an ingredient altogether.

Most unnerved, reportedly, is BAT, which is the parent company of Brown & Williamson, the third-largest cigarette manufacturer in the US after Philip Morris and RJ Reynolds. BAT was cited has having backed out of the talks for the time being while it reassesses its position.

Part of BAT's calculation appears to be the possible consequences beyond the US of the precedent of nicotine-level controls. While a relatively small player in the US, with 17 per cent of the market, BAT is the second- largest cigarette manufacturer world-wide. A ripple effect in other world markets could be highly damaging.

As both sides strain to see whether the talks can be salvaged, the chief executive of BAT, Martin Broughton, was believed to be scheduled to fly to Washington on Friday to confront the issue himself.

There are also strains inside the anti-tobacco camp, however. Yesterday a coalition of health advocates, which includes David Kessler, the former FDA commissioner, wrote to President Bill Clinton urging him to pause before endorsing any deal that does not sufficiently tame the tobacco giants.

Any final agreement will need to be endorsed by the White House and translated into legislation on Capitol Hill. If any sense emerges of the tobacco giants having been granted concessions, the package may become politically hard for Congress to swallow.

A second issue is the breadth of immunity that may be granted to the manufacturers. Many health advocates not involved in the talks are anxious that the industry should not be granted blanket immunity in perpetuity.