US tobacco firms fight cigarette tax hike

San Francisco

REYNOLDS American Inc, Altria Group Inc and other tobacco companies are steering millions of dollars towards defeating a US$2 cigarette tax increase in California, a high-stakes effort and the third such fight in a decade in the most populous US state.

The tobacco industry's outlay of US$35.6 million so far means that it has outspent supporters two-to-one in donations to defeat the measure, which starting next April would boost the levy to US$2.87 a pack. The initiative would generate some US$1 billion to US$1.4 billion in revenue in fiscal 2018 for cancer treatment and smoking prevention.