R.J. Reynolds to pay Canada $323M

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Published: April 14,2010

Tags: tobacco

WINSTON-SALEM, N.C. — R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc., said Tuesday that it will pay the Canadian government 325 million Canadian dollars ($323.4 million) as part of a deal to settle civil claims related to cigarette smuggling in the 1980s and 1990s.

R.J. Reynolds and parent company R.J. Reynolds Tobacco Holdings Inc. no longer sell tobacco in Canada. They sold their international businesses, including RJR-Macdonald Inc., to Japan Tobacco Inc. in 1999.

The company’s best-selling brands include Camel and Pall Mall.

If the company decides to sell tobacco products in Canada in the future, it must implement measures — including packaging and marketing — that will help Canadian authorities fight contraband.

Subsidiary Northern Brands International Inc. also agreed to pay 75 million Canadian dollars ($74.6 million) related to its plea to one count of conspiracy to aid others in the sale and possession of contraband cigarettes in Canada in the early 1990s.

Shares of Reynolds American, whose brands include Camel and Pall Mall, dropped 34 cents to $54.19 in afternoon trading.

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