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British American Tobacco is ending operations in Chile

July 9 2015

British American Tobacco is closing its operations in Chile because of changes to the country’s tobacco law, the company announced Thursday.

The world’s No. 2 cigarette maker, which produces brands like Dunhill, Lucky Strike and Pall Mall, objects to changes that include banning additives like menthol and adding larger warnings to cigarette packs about the risks of smoking.

The Chilean unit of the company called the toughening of Chile’s tobacco law “unconstitutional and arbitrary.”

“We deeply regret what has been approved by the Senate, a decision that will affect thousands of Chileans who were working legally and responsibly for more than 100 years,” the company said in a statement.

British American Tobacco says the modifications approved by Chile’s Senate this week would affect its business and hurt a “significant number of farmers and workers” who produce and sell tobacco in the country.

The company, which has operated in Chile since 1909, says it’ll start the phase-out by firing 20 percent of its nearly 1,000 employees. It estimates about $400 million could be lost with the menthol ban and warning label changes.

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