British American Tobacco finds itself embroiled in significant legal battles across Nigeria, as five states demand a total of N10.6 trillion (£9.3 billion) for healthcare expenses linked to smoking-related illnesses.
These lawsuits, initiated by both the federal government and the states of Kano, Oyo, Lagos, Ogun, and Gombe, date back to 2007.
The legal action alleges negligence, fraud, and various violations related to the production and marketing of tobacco products by BAT.
BAT’s 2023 Annual Report disclosed: “British American Tobacco (Nigeria) Limited (BAT Nigeria), the Company, and Investments have been named as defendants in medical reimbursement actions by the federal government of Nigeria and several Nigerian states, seeking damages totaling approximately NGN10.6 trillion (£9.3 billion).”
The company further revealed that similar tobacco-related litigation is ongoing outside the U.S., including medical reimbursement actions in Angola, Brazil, Canada, Nigeria, and South Korea, with active product liability claims existing in 12 markets.
The outcomes of these lawsuits could establish significant precedents impacting global tobacco regulation and corporate accountability.
BAT’s legal challenges extend to regulatory matters. In 2022, following an investigation by the Nigerian Federal Competition and Consumer Protection Commission over alleged violations of local competition and consumer protection laws, BAT was ordered to pay a penalty of $110 million, settled in 2023.
BAT’s Nigerian subsidiaries are now under a two-year monitoring period to ensure compliance with national tobacco control standards.
The company’s 2023 annual report detailed the settlement and emphasized that the fine was paid in Naira, not dollars.
These legal and regulatory hurdles pose substantial financial risks for BAT, potentially influencing its operations and market standing. The ongoing litigation, coupled with hefty penalty payments and heightened regulatory scrutiny, may impact BAT’s strategic decisions and operational presence in Nigeria and beyond.
Moreover, in April 2023, BAT reached a $635 million settlement with U.S. authorities to address inquiries related to sanctions violations and misleading banks regarding the sale of products in North Korea.
