FG fines British-American Tobacco $110m, drops criminal charges

The Federal Government, through the Federal Competition and Consumer Protection Commission, has fined British American Tobacco and its affiliate companies $110m.

This is for alleged infringements of the Federal Competition and Consumer Protection Act, National Tobacco Control Act, and sundry legal instruments, the FCCPC said on Wednesday in a statement.

In addition, the commission said BAT must subject itself to compliance and monitoring for a period of 24 months, mandatory public health and tobacco control advocacy, and provisions of written assurances to the commission.

“In exchange for BAT Parties fulfilling their obligations under the Consent Order, the commission withdrew pending criminal charges against BATN and at least one employee with respect to obstructing the commission by attempting to prevent execution of the search warrant and initial lack of cooperation/compliance with steps in the investigation,” the commission said.The FCCPC said the decision followed its “active” investigation into British American Tobacco Nigeria Limited and other affiliated companies (BAT Parties) on August 28, 2020, after it received credible pieces of information and intelligence.

Commenting on the resolution, it said, “During the year ending 2023, the Federal Competition and Consumer Protection Commission came to a final resolution with British American Tobacco (Nigeria) Limited (BATN, British American Tobacco Marketing (Nigeria) Limited (BATMN), British American Tobacco Plc, British American Tobacco (Holdings) Limited (all together referred to as BAT Parties) with respect to a range of infringements of the Federal Competition and Consumer Protection Act, National Tobacco Control Act and sundry legal instruments.”

According to the commission, it carried out an order and warrant of search and seizure, approved by a Federal High Court, at BAT locations and the location of a service provider on January 25, 2021.

It disclosed that it gathered, received, and procured substantial evidence from forensic analysis of electronic communications and other information/data obtained during the search, as well as other evidence procured during, and after the search from other legitimate sources.

It added that additional investigation, including proffers, hearings, transcripts of sworn testimonies, and continuing analysis of evidence established and supported multiple violations of the FCCPA and other enactments.

It highlighted that during the investigation and in furtherance of mutual engagements between the commission and BAT Parties, BAT Parties, in writing sought, and the commission accepted BAT Parties into cooperation under the Commission’s Cooperation/Assistance Rules & Procedure, 2021.

It clarified that this provides for benefits such as possible reduced monetary penalties; waiver of the application of the commission’s Administrative Penalties Regulations 2020; as well as prosecutorial discretion, particularly Rules 5.1 and 5.3 (subject to compliance with Rules 3 and 5.4).

The FCCPC noted that its penalties were reached upon full consideration of the record, BAT Parties’ additional articulation representations, and correspondence.

Part of the verdict of the investigation read: “That BAT Parties shall pay a penalty of $110,000,000 under and pursuant to Section 155 of the FCCPA, Clause 11 of the Federal Competition and Consumer Protection Commission’s Administrative Penalties Regulations, 2020 and Clause 4.2 of the Federal Competition and Consumer Protection Commission’s Investigative Cooperation/Assistance Rules and Procedures, 2021.”

The commission stated that it remained committed to promoting and ensuring fair market practices while protecting consumer interests.

It added, “A distorted market redounds only to the benefit of those who engage in malfeasance, is at the expense of others, and exploitation of consumers while undermining a stable economy. It compromises a constitutional and national priority of economic growth and shared prosperity.”

Recently the Executive Vice Chairman of FCCPC, Babatunde Irukera, revealed that businesses must be held accountable and made to face the consequences when they err. He said this while disclosing that the commission generated N56bn, mainly from penalties, as Internally Generated Revenue in 2023.

While noting that 90 per cent of the IGR was mainly from penalties, he said, “What makes the market stable is holding businesses accountable. The consequence management system is what we have adopted.

“We are not trying to close down businesses, but they must know that if you snooze, you lose. You cannot distort the market and expect that there will be no consequences.”

When contacted, the External Affairs Director of the company, Odiri Erewa-Meggison told our correspondent to send an inquiry via text message. She was yet to send feedback at the time of filing this report.