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Tobacco companies settle in USA

THE attraction of the United States of America to Formula 1 has increased with the news that the major tobacco companies have reached a deal with eight States which will allow restricted tobacco advertising in the future. A Federal appeals court last week ruled that the Food and Drug Administration had no authority to regulate the tobacco industry, opening the way for a settlement with individual States. Philip Morris, British American Tobacco, RJR Nabisco Holdings and the Loews Corporation have since concluded a deal to pay $250bn to participating States over the next 25 years for immunity against lawsuits which seek reimbursement from tobacco companies of Medicaid costs for treating smokers.

Eight States signed up immediately and another 30 are expected to agree to the deal this week. They have until Friday to accept the terms.

There will be considerable restrictions on tobacco sponsorships but our sources say that some arrangements will be allowed to continue. This may mean that each company is allowed to retain one big sporting involvement.

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