Favored OTCs

In 1994, then CEO James Johnston testified under oath before Congress, saying that he didn't believe that nicotine is addictive.[10] In 1998, the company was part of the Tobacco Master Settlement Agreement with 46 U.S. states, agreeing to pay smoking-related health care costs and restrict advertising in return for protection against private lawsuits.



In 1999, R.J. Reynolds was spun out of RJR Nabisco. The same year, the company sold all its non-U.S. operations to Japan Tobacco, which made those operations into its international arm, JT International. Consequently, any Camels, Winstons or Salems sold outside the United States are now actually Japanese cigarettes.



In 2002, the company was fined $15 million for handing out free cigarettes at events attended by children, and was fined $20 million for breaking the 1998 Master Agreement, which restricted targeting youth in its tobacco advertisements.[11]



In 2001–2011, the European Union was involved in three civil suits against R.J. Reynolds in the United States District Court for the Eastern District of New York, accusing the company of selling black market cigarettes to drug traffickers and mobsters from Italy, Russia, Colombia and the Balkans. The suits were unsuccessful.[12][13][14][15]



On July 30, 2004, R.J. Reynolds merged with the U.S. operations of British American Tobacco (operating under the name of Brown & Williamson). A new parent holding company, Reynolds American Inc., was established as part of the transaction.



In May 2006 former R.J. Reynolds vice-president of sales Stan Smith pleaded guilty to charges of defrauding the Government of Canada of $1.2 billion (CDN) through a cigarette smuggling operation. Smith confessed to overseeing the 1990s operation while employed by RJR. Canadian-brand cigarettes were smuggled out of and back into Canada, or smuggled from Puerto Rico, and sold on the black market to avoid taxes. The judge referred to it as biggest fraud case in Canadian history.[16]



Since 2006, R.J. Reynolds has been the subject of a Farm Labor Organizing Committee (FLOC) campaign to reduce the exploitative nature of its tobacco procurement system. FLOC's goal is to meet with Reynolds executives, growers, and workers in collective bargaining to improve farmworkers' pay and living conditions. Although there are many layers of subcontractors within the procurement system that seemingly absolve Reynolds of responsibility, FLOC asserts that its executives have the ability to make changes within the system due to their wealth and enormous power. Despite repeated refusals to meet from CEO Susan Ivey, FLOC continues the campaign against R.J. Reynolds Tobacco Company.[17]