Additional AGM Statement

British American Tobacco PLC
26 April 2007

                   The criminals costing taxpayers billions -
                            not modern 'Robin Hoods'

Smuggled or counterfeit cigarettes sold in pubs, clubs and on the street are
costing taxpayers billions of pounds, British American Tobacco said today.

The illicit tobacco trade has lost the UK Government over £19 billion in tax
revenue over five years to 2005 - enough to build 800 new secondary schools,
said Chairman Jan du Plessis at the company's Annual General Meeting.

And this is just the tip of the iceberg.  Globally, the black market is
estimated to have cost governments worldwide £12 billion in lost taxes last year
alone.

Mr du Plessis said some 320 billion cigarettes smoked worldwide last year were
illicit - over six per cent of world volumes and more than the combined volumes
of Imperial Tobacco and Altadis - and the criminals behind this trade are now
the world's fourth biggest tobacco player.

He said British American Tobacco's losses to the criminals' pockets are now
estimated at over £500 million a year, while legitimate tobacco companies as a
whole lose over £2 billion.

Mr du Plessis said excessive tobacco tax increases give a lucrative opportunity
to the traffickers:  "The issue is not taxes in themselves.  It is very large
tax increases, sometimes suddenly imposed, that push prices higher than
consumers are prepared to pay and create big tax differences, and thus big price
differences, across borders."

He revealed that a so-called 'amateur' smuggler of 15,000 cigarettes in two
suitcases, bought tax-paid for £1.60 a pack in Spain, can net an illegal profit
of over £1,000 at UK street value.  A transit van-load smuggled from Ukraine can
net a £50,000 illegal profit and a large truck-load can net £1 million.

Mr du Plessis warned:  "Consumers should not imagine that the shadowy figures
behind this trade are heroic 'Robin Hoods'.  Anyone lighting up a smuggled or
counterfeit cigarette should know they may unwittingly be helping to fund
international organised crime, while taxpayers foot the bill."

Interpol, the international police organisation, notes that gangs behind illegal
drugs, arms and people trafficking are also involved in the illicit cigarette
and alcohol trade.

Mr du Plessis told shareholders that British American Tobacco's battle against
illicit trade includes ensuring that quantities it supplies are consistent with
legitimate demand, cutting off supplies to any customers knowingly or recklessly
involved in illicit trade, putting a covert security feature on its packs to
help enforcement agencies to spot fakes, signing agreements with customs
agencies for joint action and helping governments with intelligence-gathering.

"But fundamental to this battle is the recognition that there is a limit to what
manufacturers can do on their own," he said.  "It is critical for governments to
recognise that ever-rising tobacco taxes will drive growth of the illegal
segment.  An urge to raise revenues or reduce consumption through higher taxes
can all too often be an 'own goal', with lost revenues and taxes higher than
consumers will pay, driving them to illegal cigarettes."

He welcomed the World Health Organisation's move to develop a global treaty to
combat illicit tobacco trade and said British American Tobacco had much to offer
to help make it effective.

"For example, we propose that every manufacturer should ensure its sales are
equivalent to legitimate demand, should screen and monitor customers and act to
ensure that its customers implement similar trading policies.  We support pack
marking, showing the place and date of manufacture, security devices and
government tax markers on packs.  We advocate stronger laws, tougher penalties,
destruction of seized goods and illicit machinery, and laws to make the copying
of tax markers as serious a crime as forging banknotes."

Mr du Plessis added:  "We hope, and believe, that some members of the tobacco
control community recognise that in this battle, the legitimate industry is an
ally, not an enemy.  The real enemy is the burgeoning body of illicit
traffickers which, if regulation takes a perverse course, could become bigger
and more successful yet."

                                   ENQUIRIES

                     British American Tobacco Press Office

            David Betteridge / Kate Matrunola / Catherine Armstrong

                        [phone] (24 hours)



Notes to editors



  • The full text of the AGM speech can be found at www.bat.com / Media.
  • There is more information at www.bat.com / Consumers and trade / About
    illicit trade.

•         Examples of the effect of tobacco tax increases include:

UK:                        The tax on cigarettes rose by 173 per cent in the six
years to 2000, and consumption of cigarettes on which no UK taxes were paid rose
from four per cent to an estimated 27 per cent today.

Germany:             70 per cent excise increases over four years saw a 70 per
cent rise in consumption of cigarettes on which German taxes were not paid,
losing the Government almost £3 billion last year alone - a sum forecast to rise
by a further £1 billion this year.

Hungary:              Tax increases of 94 per cent in 18 months saw illicit
trade soar to over a fifth of the market, losing the Government, over a two year
period, a sum equivalent to its entire annual healthcare budget.

Canada:                A survey just over a year ago found that 17% of tobacco
consumption was contraband, mainly product manufactured in, and smuggled from,
First Nations reservations and all the indicators show things have grown worse
since then.  "Politicians in Canada," said Mr du Plessis, "a leading country in
tobacco control, find it politically convenient to ignore this scourge, despite
the disastrous social and economic impacts."


                      This information is provided by RNS
            The company news service from the London Stock Exchange