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Canada: Tobacco giants hit by $15bn ruling for smokers 'who didn't know health risks'

Date: 2 Jun 2015

Stubbed out cigarettes

British American Tobacco, Philip Morris International and Japan Tobacco International have been hit by a ruling on two class action lawsuits on behalf of a million Canadian smokers who claimed they weren't aware of the health risks. The companies were ordered to pay CAD$15.6 billion. All three companies have said that they will appeal the damages award.

The ruling is just the latest in a series of blows against the companies. Last year, a Florida jury ordered RJ Reynolds to pay $23 billion to one claimant - the widow of a chain smoker. That award was eventually reduced on appeal to $17 million. Other similar class actions are ongoing.

Such actions are likely to add impetus to the continuing growth of e-cigarettes as an alternative that has many fewer health impacts. However, at the same time as such alternatives are a major source of growth in developed markets, tobacco companies continue to invest heavily in markets where health concerns have not yet come to the fore. For instance, British American Tobacco has just bought the number one tobacco firm in Croatia.


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