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US tobacco firm presses hard to open overseas markets to snuff

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When the Hong Kong government decided to snuff out smokeless tobacco last summer, banning it for public health reasons, it did not count on the formidable opposition of the United States Tobacco Company. In the six months before the ban was finally signed into law on Jan. 16, the firm mounted a massive governmental, diplomatic, and private campaign against it. US Tobacco's Hong Kong campaign is a case study in how an aggressive multinational company can pull the levers of government to effect its own commerical ends. The case may serve as a preview of coming battles in the smokeless tobacco wars to be waged beyond Hong Kong.

US Tobacco tried to block the ban because Hong Kong is the gateway to the lucrative Asian market for snuff. Hong Kong's stand is seen as influencing other Asian Pacific countries. Already, New Zealand has followed Hong Kong in instituting a ban on smokeless tobacco. Australia and Singapore are considering similar bans. The Hong Kong ban may also endanger a tentative agreement the company had announced for the sale of snuff in the People's Republic of China. With 300 million smokers, China is the largest tobacco market in the world.

US Tobacco set up its Hong Kong office in 1985 to promote sales throughout Asia of Skoal Bandits, a moist snuff popular with young users. In its efforts to kill the Hong Kong ban, the firm also used the United States Commerce Department, the State Department, four US senators to whom it made hefty campaign contributions, the Department of Health and Human Services, the American Chamber of Commerce in Hong Kong, a powerful Hong Kong legal firm, and representatives of its own Connecticut-based multinational company. Its chief weapon was the threat of action by yet another US government arm, the office of the US trade representative, through trade retaliation under Section 301 of the US trade law.


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