Big tobacco firms could seek to recoup $1 billion in payments made under the 1998 nationwide tobacco settlement, according to an industry analyst. 

The Business Journal of the Greater Triad Area reported March 6 that Citigroup analyst Bonnie Herzog said that an unpublished internal industry analysis concluded that the agreement between tobacco firms and the states was a major reason for the tobacco companies losing market share between 1997 and 2003. Under the terms of the Master Settlement Agreement, companies could seek a refund of about $1 billion in payments previously made to states, Herzog said.

The industry report, prepared by the Brattle Group, is not expected to be released until the end of March. Herzog said the states are expected to fight any bid for a rebate in court.

"Overall, we're not convinced that the participating (including the major) manufacturers will be able to get the $1 billion of lost payments back," said Herzog. "However, we would not be surprised if this battle leads to some form of another settlement which could result in an even more iron-clad partnership between the states and tobacco manufacturers."