JULY 17, 2000
Big tobacco takes a big hit
TOBACCO has been the biggest supporter of motor racing since the late 1960s but the pressure on cigarette companies continues with another huge award of damages last week in a Miami court where a jury decided that the tobacco companies should pay $145 billion in punitive damages in what is known as "a class action" brought by thousands of individuals suffering from smoking-related illnesses.
Tobacco companies are making big profits but these are beginning to be eaten up by the damages payments and investors are becoming increasingly disenchanted with tobacco stocks. This means that less and less money will be available for sponsorships in future and with tobacco advertising bans spreading all the time, the value of F1 to the tobacco industry is reducing rapidly. The FIA has agreed to ban all tobacco sponsorship in motor racing by October 2006 but it may not be necessary as tobacco companies may have disappeared from F1 by then.