Parent Company Liability
PROPOSED TOBACCO DEAL: ISSUES
The multistate agreement requires only the tobacco-selling affiliates
of the tobacco companies to make the required industry payments.
Payment obligations do not extend to food, beverage or other affiliates.
Payment obligations specifically do not extend to the international
affiliates of RJR and Brown and Williamson.
Earnings from those entities will accrue outside of the framework of
the multistate agreement.
There have been numerous reports suggesting that RJR and perhaps Philip
Morris will divest food and beverage operations after a deal. RJR is also
reportedly considering selling off its international subsidiary.
Issue of Concern:
The tobacco companies have invested earnings from domestically sold
tobacco in their international businesses and to acquire food and beverage
operations. Why should these laundered tobacco earnings be shielded from
the companies' payment obligations?
For more information, contact: Robert Weissman, Essential Action, 202-387-8030.