The creep of smoking bans across the Western world has prompted British American Tobacco’s US subsidiary to splash out $3.5bn (£2bn) on a business that looks like reviving: the manufacture of chewing tobacco. Once the preserve of baseball players and the rural poor, chewing tobacco appears once again to be taking off, with one federal government estimate suggesting one in five high-school boys are using it.
And yesterday, Reynolds American – the joint venture created through the merger of BAT’s US business and RJ Reynolds in 2004 – said it would buy the privately owned Conwood smokeless tobacco group.Conwood is being sold by the Chicago-based Pritzker family, who said the business would do best of all in the hands of an industry player that can throw significant marketing resources behind its brands.These include a fast-growing, low-cost brand of moist snuff called Grizzly. Moist snuff, sometimes called dipping tobacco, is placed under the lip to give a nicotine hit.”Conwood provides us with a significant, strategic platform within the growing moist-snuff category that would have taken years to build,” Susan Ivey, the chief executive officer of Reynolds American, said. “The moist-snuff category has been growing at 4 per cent to 5 per cent for the past five years. Clearly, we’re excited by this unique opportunity to gain immediate scale and strength in the category.”The Tennessee-based Conwood has annual sales of $450m and has been growing profits at 10 per cent a year since the start of the decade.Tom Pritzker, the chairman of the Pritzker Organisation has been leading a break-up of the family’s portfolio of businesses, and said Conwood would flourish under Reynolds American.British American Tobacco itself is investing in moist-snuff products, known in Europe by the Swedish name snus, although these are banned across the European Union outside Sweden.

The product could be popular in emerging markets in Asia, where smokeless tobacco products such as chewing tobacco are common.US consumption of cigarettes has fallen almost every year since peaking at 640 billion cigarettes in 1981, according to the US Department of Agriculture It fell 2.6 per cent in 2005 to 378 billion cigarettes.. Shares in Alpha Airports were suspended yesterday after the company auditors suddenly withdrew their approval of the accounts. PricewaterhouseCoopers had previously signed off the accounts for the year ended 31 January 2006, but changed its mind on Monday night, when it alerted Alpha to the news.
Alpha, which supplies food and retail services to 100 airlines and 70 airports, asked the London Stock Exchange to halt trading in the shares while it investigates. It said in a statement that PwC is concerned by “a series of transactions connected with a major contract awarded to the company”. No further details were given.Accountants said it is highly unusual for approval of a company’s accounts to be withdrawn at such a late stage. The annual report has been cancelled and the annual meeting will be delayed because of the controversy.PwC declined to comment, citing client confidentiality. The shares were suspended at 84.5p, at which level the company is worth £147m.Alpha said it is “urgently seeking to clarify the position”.

PwC, the auditors since 1994, have not resigned.When Alpha unveiled its preliminary full-year figures in March, Alpha said it had been defrauded by £2.5m. The police and the Crown Prosecution Service are investigating. PwC’s concerns are not related to this case, it is understood.Alpha made profit of £18.4m last year on sales of £550m.. By agreeing to the sale and leaseback of up to £5bn worth of freehold property, Tesco seems finally to be bowing to pressure from shareholders for a more immediate return on their money. That, in any case, was the way the company chose to present yesterday’s news.