Brazil gives tobacco firms notice in lawsuit

BRASILIA: The world’s largest cigarette makers, British American Tobacco Plc and Philip Morris International, will have until early next month to defend themselves in a lawsuit in Brazil over compensation for tobaccorelated diseases.

Since last year, the companies have refused to receive subpoenas delivered to their local subsidiaries in the lawsuit brought by the Brazilian solicitorgeneral’s office.

Souza Cruz Ltda, Philip Morris Brasil Industria e Comercio Ltda and Philip Morris Brasil SA, which produce 90% of the cigarettes sold in Brazil, maintained they were subsidiaries only and notifications had to be sent directly to their parent companies’ headquarters in Britain and the United States.

But the federal judge hearing the case in Porto Alegre, Graziela Bundchen, ruled this week that the companies were the operational wings of the parent companies and fully capable of relaying the notifications to their head offices. She gave them 30 days to present their defences.

The solicitorgeneral’s office, known as the AGU, said yesterday the cigarette companies had tried to delay the lawsuit, which would now be able to proceed in seeking ‘‘the just compensation the Brazilian people deserve’’.

The AGU filed the landmark lawsuit in May, seeking to recover the public health costs for the treatment of 26 tobaccorelated diseases over the previous five years.

A spokesman for Souza Cruz said the company would study the decision. Philip Morris did immediately reply to a request for comment. — Reuters