British Columbia Decision

British American Tobacco PLC
30 September 2005



For immediate release:  Friday 30 September 2005

                           British Columbia Decision


The following statement was issued by our Canadian subsidiary, Imperial Tobacco
Canada Ltd, yesterday, Thursday 29 September 2005:



"Montreal, September 29, 2005 - Today's Supreme Court of Canada's ruling
reassures Imperial Tobacco Canada that it can have a fair trial and bring
forward all the relevant information in any legal action undertaken by the B.C.
government under the Tobacco Damages and Health Care Recovery Act. The company
intends to vigorously defend itself in any trial initiated by that province.



It must be remembered that the decision rendered today does not in any way find
any tobacco company to be liable, but merely allows the action already taken by
the provincial government to continue.



"This case is not about tobacco and it's not about health, it's about abuse of
power and a grotesque cash grab by the government.   The B.C. legislation is a
blueprint for any government in this country to facilitate a lawsuit against any
industry or any person or group of persons that a provincial government decides
to target," said Don McCarty, general counsel of Imperial Tobacco Canada. "This
decision essentially means that it is open season on any industry that any
government decides to take on for its own benefit. Industries such as fast food,
alcohol, gaming and others are all now fair game for a statute of this kind.



"Governments in Canada currently collect more than $9 billion a year in taxes
from the tobacco industry, which is more than 13 times the profit of Canadian
tobacco companies," he added. Since 1970 they have collected more than $130
billion in tax revenues on the sale of tobacco products, and the B.C. government
has directly collected more than $9 billion.



"We intend to fight for our right to a fair trial both before, during, and after
the trial pursued by the B.C. government. We are confident in the numerous
excellent and meritorious defences we intend to bring forward," McCarty said.



Inappropriate

This trial will take years to bring forward and to plead. Imperial Tobacco
Canada will ensure that the conduct of all parties in the history of tobacco in
this country is called to account, including the government itself, added
McCarty.  The role of governments in the development and implementation of
tobacco policy will be relevant to this lawsuit and must be fully explored.



We now hope that the B.C. government will take time to think carefully before
deciding on a future course of action.  The pursuit of a lawsuit to recover
health care costs will be a lengthy and expensive process.  We estimate the
eight-year constitutional lawsuit has cost B.C. taxpayers well in excess of $20
million.  And there will be no big pay out at the end of the day, even in the
doubtful event that the lawsuit is successful.



There is a better way.  As a tobacco company we operate under the strict
regulation of both federal and provincial governments.  We believe a more
co-operative, non-confrontational relationship between the regulator and the
regulated companies would serve everyone's interest.



Should this case proceed, we are confident that, when all the facts are brought
out, we will be successful in our defense."



The question as to whether the Act can be enforced against a number of
non-Canadian tobacco companies has still to be resolved.  That issue will come
before the British Columbia Court of Appeal in February 2006. Meanwhile, the
claim is stayed against those companies pending the outcome of that appeal."



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