June 2011 - CigarettesReviews.com | CigarettesReviews.com

Monthly Archives: June 2011

Do we really need smoking warnings?

The Department of Health and Human Services announced last week that starting in September 2012, cigarette packages and advertisements will feature “frank, honest and powerful depictions of the health risks of smoking,” including smoke streaming from a hole in a man’s neck, a set of cancer-ravaged gums, a nicotine-cooked pair of autopsied lungs and a cartoon of a baby born to a smoking mother, gasping for breath.

Got a light?

Several U.S. tobacco companies, proudly holding high the torch of individual responsibility, tried to block the government action, calling the images “nonfactual and controversial” and, what’s more — brace yourself — “intended to elicit loathing, disgust and repulsion.”

Where is the Marlboro Man when you need him? Unavailable, alas. Wayne McLaren died of lung cancer, age 51, and may he rest in peace. The poor guy spent his declining months haunting stockholder meetings of the Philip Morris company — now Altria, which sounds a bit less smoky — trying to get its officers to acknowledge corporate complicity in the disease that was killing him. Philip Morris executives were about as forthcoming and apologetic to him as, say, the heads of Fannie Mae, Goldman Sachs, AIG and other exemplars of American capitalism were about their toxic roles in the body economic.

The new warning labels are, on the one hand, “impactful.” As a precocious juvenile delinquent, I started smoking at age 13, filching my mother’s Marlboros, as it happens. Would I have lit up so gleefully if the flip-top box had been adorned with a photograph of a pair of gray, tumor-eaten lungs?

Possibly not, though never underestimate the blitheness of an adolescent determined to be cool. As it also happens, my mother died years later of a smoking-related illness. My father died of emphysema, not from cigarettes, but from cigars.

On the other hand, is it necessary — really — at this late stage to slap grotesque decals on a product that any human being with an IQ above cretinous knows to be lethal?

U.S. Surgeon General Luther Terry’s epic report on the link between smoking and mortality came out in 1964. (I just looked him up and learned that this splendid American’s middle name was Leonidas, presumably derived from the heroic Spartan leader at Thermopylae, who was as dangerous to invading Persians as Marlboros are to smokers today.) Surely by now, anyone reaching for that match knows they’re lighting not just a cigarette, but the fuse of their own longevity.

There are two competing American behavioral archetypes: Uncle Sam and Lady Liberty. Uncle Sam, stern but loving, exhorts us to defend our country and be good citizens. Lady Liberty stands for, well, freedom. The statue embodying her message, rising above the waters of New York Harbor, announces that this is the country where you can be anyone you want, do anything you want — as long as you don’t do it in the street and frighten the horses.

Occupying a middle ground between Uncle Sam and Lady Liberty is what we libertarians call the Nanny State. The Nanny State is the national bossypants, always telling us what not to do. Don’t smoke. Don’t eat so much. Don’t drink. Where are you going on that bicycle? Put on your helmet — now!

A few decades ago, Nanny, not content with merely snatching the Marlboros and Twinkies and soda pops from our little hands, decided that she should also be in charge of the national sense of humor, a phenomenon that became known as Political Correctness. PC is the voice we hear from the back of the room, once the laughter has subsided, saying, “That’s not funny.”

I’m not against the new cigarette labels, but I’m not sure I’m for them. Cigarettes kill — no argument there. So does alcohol. If that pack of Marlboros is going to look like a page from a medical textbook, shouldn’t bottles of Bud carry pictures of car crashes, or cirrhotic livers, or beaten wives? Shouldn’t Big Macs come with photos of contestants from “The Biggest Loser”?

Should French managing directors of the International Monetary Fund be required to wear signs saying: “CAUTION: MAY BE DANGEROUS TO HOTEL MAIDS”? Or, since the cigarette labels will take effect next year at the height of the presidential campaign, shouldn’t the candidates be plastered with the label: “CAUTION: WILL SAY ANYTHING TO GET ELECTED”?

I don’t know about the others, but I could be persuaded by the last two.

By Christopher Buckley

Wine industry panicked over links to plain packaging tobacco

Winemakers have expressed a wish to distance themselves from the tobacco industry, after an anti-plain packaging campaign made associations between tobacco and alcohol.

An advertising campaign, which has been developed by British American Tobacco and rolled out in the national newspapers, shows a beer bottle minus the brand label.

The advert has several messages

1) Plain packaging will “destroy brands that are worth millions, if not billion, of dollars”.
2) The policy “may infringe international trademark and intellectual property laws.
3) And because of this, the Government could face millions of dollars in legal fees defending the policy.

The plain packaging plan has obviously raised hackles and the forthright and belligerent tone of the ad campaign attests to just how far the tobacco industry is willing to go in fighting its implementation.

But the ad has ruffled some feathers in the wine industry, as it plays on fears that alcohol might be forced to follow tobacco down the path of plain packaging.

The Winemakers Federation of Australia (WFA) has been quick to disassociate alcohol from tobacco, stating that its members would reject any links made between the two industries.

Stephen Strachan, the Chief Executive of the WFA, was quoted in the Sydney Morning Herald as saying, ”our industry does not like any association between tobacco and alcohol”.

The concern voiced by the wine industry does raise an interesting issue: if the Government forces tobacco companies to sell using plain packaging on the basis of health policies, which other products should be sold in plain packs? Alcoholic beverages? High sugar beverages? Confectionery? Fast foods?

Japan Tobacco Rises as Domestic Shipments

Japan Tobacco Inc. (2914) rose the most in almost two months in Tokyo trading after the company said it planned to resume shipments earlier than previously announced for all cigarette brands disrupted by the March 11 earthquake.

The world’s third-largest publicly traded cigarette maker by volume climbed 4.5 percent to 313,000 yen at the 3 p.m. close on the Tokyo Stock Exchange, its biggest gain since May 2. The benchmark Nikkei 225 Stock Average added 1.5 percent.

Japan Tobacco will restore deliveries of all brands by July 18 instead of early August, as it had planned earlier, the company said yesterday. The 9-magnitude earthquake and tsunami forced Japan Tobacco to suspend all domestic shipments for 12 days, with cigarette brands gradually returning to production after that.

“Japan Tobacco can finally move on,” Mitsuo Shimizu, an equity analyst at Cosmo Securities Co. in Tokyo, said by telephone today. “The impact from the earthquake has started to diminish.”

Domestic sales fell 38 percent to 7.2 billion cigarettes in May, the Tokyo-based company said June 10. They plunged 81 percent in April.

By Naoko Fujimura
nfujimura@bloomberg.net

Cigarettes, alcohol cost 70% more in Ireland

IRISH PEOPLE paid 70 per cent more than the European Union average for alcohol and tobacco products last year.

A study by the EU statistics agency Eurostat found Irish consumers faced the fifth highest overall prices in the 27 EU member countries (18 per cent above average) across six categories of consumer goods and services.

The survey, based on 2010 prices, found the cost of goods and services were at their most expensive in Denmark (43 per cent above average) and cheapest in Bulgaria (49 per cent below).

Consumers in Ireland paid above average prices in four of the six categories, with clothing and electronic goods falling just below the 27 nation benchmark.

The cost of alcohol and tobacco products (70 per cent above the average) was almost three times what people in Bulgaria and Romania paid, and 28 per cent higher than in the UK, which was found to have the second highest costs in the category.

“This large price variation is mainly due to differences in taxation of these products among member states,” Eurostat said.

The agency last week said average income per head in Ireland was the joint third highest among the 27 EU countries in 2010 – 25 per cent higher than the average.

The survey also highlighted that Irish residents faced the second highest costs for food and non-alcoholic beverages – 20 per cent more than the EU average.

Danish residents again paid most in the food and non-alcoholic drink category (36 per cent more than the EU average), while people living in Romania and Bulgaria paid just two-thirds of the EU average.

Irish restaurant and hotels were the joint third most expensive in the EU, behind Denmark and Sweden and tied with Finland.

On average, goods and services cost 18 per cent more in Ireland than in the UK.

The largest difference between the two was found in the prices of alcohol and tobacco (28 per cent higher) and restaurants and hotel accommodation (26 per cent higher). The only category where people in the UK paid more than their Irish counterparts was for electronic goods, which cost 4 per cent less here.

People in Sweden paid most for electronic goods (26 per cent above average) and clothing (15 per cent above average) with people in Bulgaria again paying least (25 and 11 per cent below average respectively).

Ireland ranked third highest – behind Denmark and Portugal – when it came to personal transport costs such as bicycles, cars, fuel and spare parts, paying 16 per cent above the EU average.

Responding to the study, the Irish Hotels Federation said the statistics concealed “substantial reductions” in hotel and guesthouse accommodation prices in Ireland since 2008. Prices have fallen by 30 per cent in that period, the federation said.

Irish Farmers Association president John Bryan said the survey confirmed that the food supply chain in Ireland “remains broken” as farmgate prices here were “at best on a par with, and in many cases below, other countries”.

David Fitzsimons, chief executive of Retail Excellence Ireland said the survey highlighted that the Irish retail sector had responded to a dramatic change in consumer spending. “While it’s welcome news to see that Irish consumers can avail of great value, the fact remains that a large number of retailers are operating at a loss,” he said.

18% – the percentage Irish prices were above average costs across six categories of consumer goods and services in the EU

20% – Irish consumers faced the second highest costs for food and non-alcoholic beverages – 20 per cent more than the EU average

Smokers and drinkers pay higher price than anywhere else in EU

HAVING a smoke and a drink is dearer in Ireland than anywhere in Europe.

New figures also show that food and soft drinks are 20pc more expensive here than in the other 26 European Union states.

High taxes and excise duties are the main reason Ireland had the highest prices for alcohol and tobacco products in the EU last year.

When a range of goods and services were looked at, Ireland emerged as one of the most expensive countries.

Prices overall were 18pc higher here than the average, according to figures from Eurostat, the statistics office of the EU. But costs in Ireland were below the EU average in two areas: clothing was 5pc cheaper and consumer electronics 6pc less expensive.

Transport meanwhile was 16pc more costly in this country than the average for the EU, with restaurants and hotels almost a third more expensive.

The findings are sure to fuel claims by some consumers that they are being “ripped off” by businesses and the Government.

Retail Ireland, whose members have 3,000 shops, blamed high labour costs, service charges and rents which are among the highest in Europe.

Director of the lobby group Torlach Denihan admitted that prices here are high compared with other EU states but insisted that prices have been falling.

“According to the Eurostat survey, Irish prices for food and non-alcoholic beverages have fallen by more than anywhere else in the EU,” he said.

Responded

“The last time the gap between Ireland and the EU average was this small was 2001. We are getting there but have a way to go yet.”

The fall in Irish grocery prices shows how retailers have responded aggressively to the new economic climate, Mr Denihan said.

“Government must take decisive action to get the Irish cost base back into line with the rest of Europe by measures such as the abolition of the retail joint labour committee and early legislation to reduce retail rents.”

Prices for alcohol and tobacco are higher in Ireland due mainly to taxes. This meant there should be no hike in taxes on these items in the Budget, Mr Denihan said.

“Any increase in taxation of tobacco will aggravate the problem of cigarette smuggling, which currently costs the Exchequer an estimated €500m in lost revenue,” he added.

There may be some reduction in prices from Friday when valued added tax (VAT) drops from 13.5pc to 9pc on a range of goods and services, as part of the Government’s jobs initiative. The lower rate will apply to hotels, restaurants, hairdressing, printed matter, amusement services such as fairgrounds and admissions to cinemas and theatres.

Meanwhile, consumer confidence about personal finances and the economy fell in June.

The consumer sentiment index, compiled by KBC Bank and the ESRI, fell to 56.3 from 59.4 in May.

The underlying trend — which averages out the last three months’ figures — also fell for the first time this year.

KBC Bank economist Austin Hughes said the drop was not surprising, as consumers still faced a weak economic outlook and pressures on household spending from coming Budget measures and ECB interest rate increases.

By Charlie Weston Personal Finance Editor

Native Americans frown on tobacco draft accord

U.S. municipal bonds backed by payments from cigarette makers on Friday extended a rally sparked by hopes that Big Tobacco and state governments were closer to dividing up nearly $6.5 billion of escrowed funds.

But the draft was bashed by a Native-American tribe which says it would violate its sovereignty by forcing them to pay state fees and taxes on cigarettes sold by tribal stores. Tribal stores can be important economic engines for reservations as many are located in remote areas, advocates say.

U.S. states and tobacco companies, including Marlboro-maker Altria, Reynolds, Lorillard, have for years been fighting over how much market share they lost after agreeing to pay states more than $200 billion in 1998.

Smaller cigarette makers, which signed the accord later and make lower payments, can charge lower prices and still make money. Their market share has risen slightly.

Native-American cigarette-makers and tribal reservation stores kept their traditional pricing edge; many do not charge cigarette taxes. A number of cash-poor states have tried and failed to collect these taxes. New York state, for example, has fought lengthy court battles and drafted numerous plans; experts say it loses as much as $1 billion in revenue a year.

Since Wednesday, when news of a draft memorandum of understanding broke, prices of billions of dollars worth of municipal bonds backed by the tobacco payments have risen sharply. The debt was sold by states, counties and cities.

Municipal Market Data Market Analyst Dominic Vonella said: “Tobacco bonds continue to rally on hopes that money in escrow will free up and to help pay outstanding debt service.”

The national tobacco settlement, which resolved the states’ claims for the health care costs of treating ailing smokers, created an escrow fund for payments Big Tobacco argued it did not owe because of their lost market share.

The states countered that they were owed those payments because they were enforcing their rules aimed at preventing loss of market share.

States and cigarette-companies have been considering a May 25 draft memorandum of understanding that covers the escrow payments.

In a nutshell, the states stand to share $4.2 billion to $5.3 billion, while the tobacco companies could end up with at total of $1 billion to $2 billion, according to Janice Jessen, the communications director for Ho-Chunk Inc, the economic development arm for the Winnebago tribe of Nebraska.

Reynolds, maker of the iconic cigarettespub.biz/camel, stands to get nearly $420 million, according to the document. David Howard, a Reynolds spokesman, said the company had disputed $3.9 billion of payments. Spokesmen for Altria and Lorillard were not available; nor were details on how much they might get.

The draft memorandum also requires states to “enforce existing excise taxes and (pay) escrow fees on any cigarettes sold by Indian tribes on those reservations,” Jessen said.

“We absolutely believe it’s an attack on tribal sovereignty and therefore illegal,” she said. “It would be catastrophic on tribal sovereignty,” Jessen said.

“The great majority of tribes still rely on just local business and retail to help them survive,” she said. “If we have to pay into the escrow fund, we no longer have the competitive ability to sell against Big Tobacco,” Jessen said.

While the excise taxes would vary per state, the fee for the escrow fund would be the same for all. It would be set at $0.0283581 per cigarette, adding 57 cents per pack, she said. she said.

New York, which has some of the nation’s highest cigarette taxes, has tried to sidestep the issue of tribal sovereignty by forcing wholesalers to charge cigarette taxes when they sell them to reservation stores, which would be allowed to get a certain amount of tax-free smokes for tribal members. But some tribes have sued to block the state’s collections.

A copy of the draft memorandum of understanding, which is being considered by the states and cigarette makers, was posted on the website (KillTheMSA.com). A spokeswoman for the National Association of Attorneys General declined comment.

Vonella noted that a block size of California’s Golden State tobacco bonds due 2033 traded at a 7.535 percent yield on Friday. That works out to a 353 basis-point-spread over the prices of top-rated debt, according to Municipal Market Data.

Since June 14, yields on those bonds have fallen about 77 basis points, according to MMD, part of Thomson Reuters.

By Joan Gralla
Reuters

Tobacco Companies Fight Australian Cigarette Bill

SYDNEY, Australia — Legislation that would ban logos from appearing on cigarette packages in Australia is drawing the ire of business lobbying groups and even members of the United States Congress, who warn that the Australian government could be in breach of its international trade obligations.

The legislation would require that tobacco products be sold in plain green packaging, limiting the brand recognition enjoyed by global tobacco names like Marlboro and cheap Camel cigarettes. The law is expected to pass with broad bipartisan support when it is formally introduced in July, and it would go into effect at the start of next year, with a six-month transition period.

The government hopes that the bill, along with some of the world’s highest taxes on tobacco, will continue to drive down smoking rates in Australia. The government also hopes that the law will serve as a template for other countries. The possibility of a domino effect is what tobacco companies are afraid of, said Andrew Hughes, a marketing expert at Australian National University in Canberra. “What’s to stop this same law being applied in other parts of the world?” he asked.

Philip Morris Asia, which is based in Hong Kong and makes Marlboro cigarettes, said Monday that it had initiated legal action against the Australian government, contending that the new rules would violate Australia’s bilateral investment treaty with Hong Kong.

The company’s legal action, called a notice of claim, starts a mandatory three-month period for negotiations. “We believe we have a very strong legal case and will be seeking significant financial compensation for the damage to our business,” Anne Edwards, a spokeswoman for Philip Morris, said in a statement.

The Australian plans are among the strictest in the world, but other countries are also pushing new initiatives to reduce smoking.

Last week, United States health officials released graphic warning labels that will cover the top half of cigarette packages beginning next year. The images will be the first major change to warning labels in more than 25 years; they include photographs of damaged teeth and lungs and a person exhaling smoke through a tracheotomy opening in his neck.

Other governments are closely watching Australian efforts to restrict tobacco packaging. The British government, for example, has begun a consultation on ways to reduce the promotional effect of cigarette packs.

Tobacco is severely taxed in Australia, where smokers spend about 16 Australian dollars, or $16.70, a pack. The packs come with pictures of maladies like mouth ulcers, cancerous lungs and gangrenous limbs.

The new packs would go one step further by trying something new: shrinking the logos down to the point at which it is difficult to distinguish one brand of cigarettes from another.

Under the law, 75 percent of the front of the packaging and 90 percent of the back would have to be covered by health warnings.

The experiment has generated a roar of protest from tobacco companies and business groups like the International Chamber of Commerce, which says cigarette makers are being singled out even though they sell legal products.

“What company would stand for having its brands, which are worth billions, taken away from them?” Scott McIntyre, a spokesman for British American Tobacco Australia, said in a statement. “A large brewing company or fast food chain certainly wouldn’t, and we’re no different.”

British American Tobacco Australia, also known as BATA, is Australia’s market leader and one of the world’s largest tobacco groups by revenue, with brands including Lucky Strike. It has threatened to cut prices to remain competitive.

The company has also promised a costly legal battle and has warned that the law could lead to an increase in counterfeit cigarettes.

Imperial Tobacco, a global company that produces brands like Davidoff and Gauloises, has created a large advertising campaign against the plain packaging law that features a stern, matronly figure who asks: “Do you really like living in a nanny state?”

Representative Donald A. Manzullo, a Republican from Illinois and a member of the House Foreign Affairs Committee, said he believed Australia’s new legislation would flout international trade laws.

“Several trade-related U.S. and international business associations have raised concerns that plain packaging cannot be implemented in a way consistent with Australia’s global trade obligations,” Mr. Manzullo said in a recent letter to an Australian government minister, a copy of which was obtained from a staff member who asked to remain anonymous because he was not authorized to distribute it. “I agree. Australia’s plain packaging proposal legally abrogates sanctioned trademark rights.”

Rich Carter, a spokesman for Mr. Manzullo, confirmed the contents of the letter but said that the congressman was “no supporter of tobacco” and was concerned only about trade.

With more legal challenges like the one from Philip Morris expected, Australia finds itself in a risky position: if it loses, it may have to pay billions of taxpayer dollars in damages to the tobacco companies.

A challenge with the Australian High Court is expected but George Williams, an expert in constitutional law at the University of New South Wales in Sydney, said it is unlikely to be successful because “it’s not clear that banning the use of a trademark” is unconstitutional.

Tobacco companies are expected to then argue that law violates Australia’s obligation as a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights, also known as Trips, an agreement that sets minimum standards for intellectual property rights for members of the World Trade Organization.

Tobacco-producing countries — including the Dominican Republic, Indonesia, Mexico and the Philippines — have already raised concerns about the Australian bill at the trade organization.

But challenges through the trade organization are unlikely to be successful, said Benn D. McGrady, a lawyer at the O’Neill Institute for National and Global Health Law at Georgetown University.

The trade law bans entities from illegally copying copyrighted material, he said, rather than creating “a positive right to use the trademark.”

The language used by Mr. Manzullo, the congressman, is “strikingly similar” to that used by the tobacco companies and is indicative of just how threatened tobacco companies feel, said the Australian health minister, Nicola Roxon. “I don’t think anyone would be surprised that the tobacco companies have a significant reach in political spheres across the world, as well as with other industry organizations,” she said.

Still, Ms. Roxon said that she was concerned neither by the legal challenge nor the foreign politicians. “We are very confident of our legal advice,” she said. “We’re very confident that we are complying with our international obligations and we’re very confident that Australians will be supportive of their representatives.”

FDA about Menthol Cigarettes

The Food and Drug Administration said it will issue preliminary findings on the health effects of menthol cigarettes this year after outside advisers review an internal report starting next month.

The U.S. market for menthol tobacco products is $25 billion a year, or about 30 percent of cigarette sales, according to data compiled by Bloomberg Government. Lorillard Inc. (LO) of Greensboro, North Carolina, makes the best-selling brand, Newport, with sales of $5 billion a year. Marlboro Menthol, made by Richmond, Virginia-based Altria Group Inc. (MO) and the Kool and Salem brands sold by Reynolds American Inc. (RAI) of www.cigarettespub.biz/winston Salem, North Carolina, are other leading brands.

The FDA is weighing whether to outlaw sales of flavored cigarettes, including menthol products, under a 2009 law that gave the agency regulatory authority over tobacco products. An outside panel advised regulators in a March report that while menthol cigarettes weren’t proven to be more harmful, removing them from the market would improve public health partly because the mint-flavored cigarettes attract new smokers.

The agency doesn’t face a deadline to make a decision, Jeff Ventura, an agency spokesman, said by telephone.

More than 20 percent of adults in the U.S., or 46 million people, smoke cigarettes, according to the Centers for Disease Control and Prevention in Atlanta. Smoking is the nation’s biggest cause of preventable death, killing about 443,000 people a year, according to the public-health agency.

By Jeffrey Young
jyoung89@bloomberg.net

Warning over further cigarette tax increases

Tax levels on tobacco have reached the point where any further tax increases will lead to lower tax yields, according to a new Revenue report.

The report said that further tax hikes would lead to more consumption of untaxed – counterfeit or smuggled – cigarettes.

While the report does conclude that further tax increases would reduce smoking ‘‘somewhat’’, non-pricing measures, such as the smoking ban, were a more effective way to reduce the level of smoking.

The Economics of Tobacco report, by Padraic Reidy and Keith Walsh of the Revenue Commissioners’ research and analytics branch, examined the factors affecting cigarette consumption in Ireland between 2002 and 2009.

It concluded that the price of tobacco products was the most important factor affecting consumption.

The authors found that a 1 per cent increase in price led to a 3.6 per cent decrease in consumption of taxed cigarettes.

‘‘The most reasonable theory to explain such a large decrease in taxed consumption is that only part of the reduction is caused by lower smoking levels.

The remainder must be caused by smokers switching to substitute cigarettes,” the report read.

The most likely substitutes are identified as non-Irish taxed cigarettes (bought legally outside Ireland and brought into the country) or untaxed cigarettes (produced in or smuggled into Ireland and purchased illegally).

Revenue estimates that around 20 per cent of cigarettes smoked in Ireland are not Irish taxed, and this has been increasing in recent years.

Tobacco has consistently been a significant source of excise revenue, with more than €1 billion paid each year from 2000 onwards.

Last week, Europol, the European Law enforcement agency, announced that Ireland had one of the worst cigarette smuggling problems in the EU. Revenue has unveiled a New strategy to target the illicit tobacco trade.

Retailers Against Smuggling also has launched a new campaign that aims to highlight criminal links to the illegal movement of tobacco products, as well as revealing some of the ingredients unscrupulous smugglers put into cigarettes.

By Nicola Cooke

Imperial Tobacco Appeal Fails To Overturn UK Cigarette Vending Ban

LONDON – Imperial Tobacco Group PLC (Bristol, England) reports that it has lost its appeal of the United Kingdom’s new prohibition of cigarette vending. The vending ban becomes effective in October.

Great Britain’s Court of Appeal upheld a December decision by the High Court that rejected the legal challenge by Imperial subsidiary Sinclair Collis (Wolverhampton, England) to provisions of the 2009 UK Health Act that forbids the sale of tobacco through vending machines.

Britain’s National Association of Cigarette Machine Operators, which represents companies that manufacture and place tobacco venders in the UK, has said that its 55 member companies provide 580 jobs generating £275 million annually.

After the Parliament approved the vending ban, NACMO northern chairman Rod Bullough explained that the group “would support any genuine attempt to reduce smoking among young people, but we feel our industry is being made a scapegoat. The ban will wipe out a legitimate business sector and result in considerable job losses, as well as being another kick in the teeth for the pubs and clubs.”

Smoking has been banned in public places, including restaurants and taverns, since July 2007.

Other provisions of the Health Act include a ban on tobacco product advertising, except under certain limited circumstances, in large retail outlets starting in April, 2012, and extending to all shops in April 2015.

The UK government also is considering a requirement that tobacco products be sold only in unbranded packaging.

Nick Montano
Nick@vendingtimes.net

Tobacco labels – a model for potato chip labels?

Cigarette packages will soon carry graphic images warning about the perils of smoking, because the earnest, if understated, written potato-chipmessage simply wasn’t doing the trick. The new images have already grabbed so much attention, it appears health officials may be on to something. Perhaps this could be a way to fight weight gain.

With French fries and potato chips — and, of course, sweetened drinks — named this week as culprits in the nation’s growing girth, perhaps the same approach should be applied to junk food. Pleas to exercise and eat better haven’t worked, and the junk-food tax proposals are going nowhere fast.

But with obesity now linked to almost 17% of the nation’s medical costs, something must be done.

Perhaps images of bulging stomachs or dimpled thighs? Or limbs amputated because of diabetes or chests cut apart in desperate attempts to treat late cardiovascular disease? Could such images on a bag of chips or a can of soda be a deterrent come snack time?

Tell us what you think in the comments section below.

By Tami Dennis, HealthKey

La. House renews tobacco tax

The Louisiana House reinvigorated a proposal Monday to renew the 4-cent cigarette tax, trying to sidetrack Gov. Bobby Jindal’s veto of the measure.

A super-majority of the House and Senate backed the extension earlier this session. But Jindal vetoed the measure, and the House refused to override him.

On Monday, Rep. Harold Ritchie, D-Bogalusa, amended his tax proposal into a Jindal administration bill to redirect a stream of tobacco settlement money to the state’s free college tuition program, called TOPS.

The move, if backed by the Senate, would bypass Jindal and instead head to voters for consideration. Sen. John Alario, sponsor of the amended bill, said he expects to ask senators to reject the add-on.

“I would have to reject that,” said Alario, R-Westwego. “That was not the intention of our bill.”

Jindal gave a noncommittal statement about whether he’d sacrifice the bill because of the cigarette tax, leaving open a possibility the renewal could win final passage.

“While we are disappointed that the House amended the TOPS bill to include the cigarette tax, we can’t let the perfect be the enemy of the good. TOPS is too important to our children and to the future of our state,” Jindal said in a statement.

Rep. Jane Smith, R-Bossier City, tried to fight off the tobacco tax renewal without success.

“This bill is not about a cigarette tax,” she said.

The measure would dedicate a stream of tobacco settlement money to the college tuition program, the Taylor Opportunity Program for Students. Otherwise, the dollars would be divided between health care and education purposes.

The House voted 58-41 for Ritchie’s amendment and the proposed constitutional change, 90-12.

Jindal opposes the cigarette tax renewal as a tax increase. Supporters of the tax renewal say it would discourage smoking, and they said they don’t want to support anything that would decrease the cigarette tax.

Ritchie said by putting the initiative on a ballot, voters could decide if they want the tax.

Louisiana’s cigarette tax will drop to 32 cents per pack in June 2012, without the renewal. The cigarette tax, first enacted 11 years ago, generates $12 million annually.

BATON ROUGE, La.

Wal-Mart sequel pushed

Lawyers for four tobacco companies, reacting quickly to the Court’s new Wal-Mart ruling, renew their plea for the Justices to hear a Louisiana case to answer constitutional questions left undecided.

Arguing that the Supreme Court’s new ruling in the Wal-Mart Stores case will lead lawyers pressing class-action claims to turn increasingly to the state courts, four major tobacco companies on Tuesday made a new plea to the Justices to take on a state case and answer the constitutional issues that did not get decided on Monday. The Justices are scheduled to consider the tobacco case at their private Conference on Thursday; the case, Philip Morris USA Inc., et al., v. Jackson, et al. (10-735), has been on hold until the case of Wal-Mart v. Dukes (10-277) was decided.

The constitutionality of using the class-action approach, especially when a large group of individuals file the case against a major company, was in the background of the Wal-Mart case, but the final decision did not directly confront that question. Moreover, the Wal-Mart case turned mainly on the meaning of a court rule that governs class-action lawsuits only in federal, not state, courts, so there were no indications how the Court would now react to a state case. That reaction is what the tobacco companies’ lawyers were seeking in their supplemental brief (found here). Lawyers for the smokers who sued in the case from Louisiana answered (their new brief is here), urging the Court to deny review and allow a state court verdict setting up a $270 million smoking-cessation fund to go into effect.

That verdict was blocked temporarily by Justice Antonin Scalia last September, as he expressed concern about “abuse of the class-action device.” Scalia was the author of the Court’s Wal-Mart ruling on Monday. In the most significant part of that opinion, the Court, splitting 5-4, shut down a massive class-action lawsuit by hundreds of thousands of women who work now or formerly worked for the big discount retailer, claiming sex bias in pay and promotions.

The tobacco firms’ lawyers, responding quickly to the Wal-Mart ruling, said in their new brief that the Court, “by recognizing restrictions on the use of class actions in federal courts,…increased the incentives for class-action lawyers to push the limits in state court.” Thus, they went on, the need for clarification of constitutional limits on at least some forms of class-action litigation is “more pressing than ever.”

The Louisiana case, the brief asserted, “is an ideal vehicle for providing such clarification. The decisions [in state court] reflect a radical deviation from the model of class-action litigation reflected in the conception of Rule 23 reaffirmed in Wal-Mart.” The requirements of federal Rule 23 (applied by the Court in Wal-Mart), plus other restrictions on federal court authority, the brief said, “forbid in federal court [what] was openly embraced in the decisions below.”

Now that the Wal-Mart ruling has come down, the tobacco firms’ lawyers said, the Court has two obvious options: either return the Louisiana case to state courts to see how, if at all, the Wal-Mart decision might apply, or to grant review of the tobacco petition and move forward to decide it, at the Court’s next Term. A grant “is clearly the proper” option, the brief suggested.

It is unclear just how state courts would apply the Wal-Mart ruling, since it was so closely focused on the federal Rule 23. In fact, in the response to the new tobacco brief, lawyers for the individuals who filed the Louisiana case argued that state courts have no obligation to mimic Rule 23 in the way they conduct class-action lawsuits under state law. The tobacco lawyers, the attorneys on the other side contended, were seeking to “conflate Rule 23″ with constitutional due process requirements.

“This Court,” the Louisianans’ lawyers contended, “has repeatedly rejected the claim that Rule 23 is the only method compatible with Due Process to prosecute a class action.” The Court, they added, has ruled consistently that the Due Process Clause does not compel the states to adopt rules appropriate for federal courts.

The Court could act on the tobacco appeal as early as next Monday.

By Lyle Denniston
By Scotusblog

Native Americans frown on tobacco draft accord

NEW YORK – U.S. municipal bonds backed by payments from cigarette makers on Friday extended a rally sparked by hopes that Big Tobacco and state governments were closer to dividing up nearly $6.5 billion of escrowed funds.

But the draft was bashed by a Native-American tribe which says it would violate its sovereignty by forcing them to pay state fees and taxes on cigarettes sold by tribal stores. Tribal stores can be important economic engines for reservations as many are located in remote areas, advocates say.

U.S. states and tobacco companies, including Marlboro-maker Altria, Reynolds, Lorillard, have for years been fighting over how much market share they lost after agreeing to pay states more than $200 billion in 1998.

Smaller cigarette makers, which signed the accord later and make lower payments, can charge lower prices and still make money. Their market share has risen slightly.

Native-American cigarette-makers and tribal reservation stores kept their traditional pricing edge; many do not charge cigarette taxes. A number of cash-poor states have tried and failed to collect these taxes. New York state, for example, has fought lengthy court battles and drafted numerous plans; experts say it loses as much as $1 billion in revenue a year.

Since Wednesday, when news of a draft memorandum of understanding broke, prices of billions of dollars worth of municipal bonds backed by the tobacco payments have risen sharply. The debt was sold by states, counties and cities.

Municipal Market Data Market Analyst Dominic Vonella said: “Tobacco bonds continue to rally on hopes that money in escrow will free up and to help pay outstanding debt service.”

The national tobacco settlement, which resolved the states’ claims for the health care costs of treating ailing smokers, created an escrow fund for payments Big Tobacco argued it did not owe because of their lost market share.

The states countered that they were owed those payments because they were enforcing their rules aimed at preventing loss of market share.

States and cigarette-companies have been considering a May 25 draft memorandum of understanding that covers the escrow payments.

In a nutshell, the states stand to share $4.2 billion to $5.3 billion, while the tobacco companies could end up with at total of $1 billion to $2 billion, according to Janice Jessen, the communications director for Ho-Chunk Inc, the economic development arm for the Winnebago tribe of Nebraska.

Reynolds, maker of the iconic cheap Camel cigarettes, stands to get nearly $420 million, according to the document. David Howard, a Reynolds spokesman, said the company had disputed $3.9 billion of payments. Spokesmen for Altria and Lorillard were not available; nor were details on how much they might get.

The draft memorandum also requires states to “enforce existing excise taxes and (pay) escrow fees on any cigarettes sold by Indian tribes on those reservations,” Jessen said.

“We absolutely believe it’s an attack on tribal sovereignty and therefore illegal,” she said. “It would be catastrophic on tribal sovereignty,” Jessen said.

“The great majority of tribes still rely on just local business and retail to help them survive,” she said. “If we have to pay into the escrow fund, we no longer have the competitive ability to sell against Big Tobacco,” Jessen said.

While the excise taxes would vary per state, the fee for the escrow fund would be the same for all. It would be set at $0.0283581 per cigarette, adding 57 cents per pack, she said. she said.

New York, which has some of the nation’s highest cigarette taxes, has tried to sidestep the issue of tribal sovereignty by forcing wholesalers to charge cigarette taxes when they sell them to reservation stores, which would be allowed to get a certain amount of tax-free smokes for tribal members. But some tribes have sued to block the state’s collections.

A copy of the draft memorandum of understanding, which is being considered by the states and cigarette makers, was posted on the website (http://KillTheMSA.com). A spokeswoman for the National Association of Attorneys General declined comment.

Vonella noted that a block size of California’s Golden State tobacco bonds due 2033 traded at a 7.535 percent yield on Friday. That works out to a 353 basis-point-spread over the prices of top-rated debt, according to Municipal Market Data.

Since June 14, yields on those bonds have fallen about 77 basis points, according to MMD, part of Thomson Reuters.

By Joan Gralla
Reuters

Philip Morris force Gillard to back down on its plain-packaging legislation

International tobacco giant Philip Morris will take legal action to try and force the Gillard government to back down on its plain-packaging legislation.

“We don’t take legal action lightly, but we have no other option. We believe we have a very strong legal case,” spokeswoman for the company, Anne Edwards, told the Australian newspaper on Monday.

The legal action by the company, which manufactures brands such as Marlboro and Peter Jackson, will occur under a bilateral investment treaty between Australia and Hong Kong.

The company will argue that because it’s Australian operation is owned by Philip Morris Asia (PMA), which is based in Hong Kong, the plain-packaging legislation will adversely impact upon an investment protected by the treaty.

The notice of claim to be served on Monday will start a three-month period of negotiation and if there is no resolution the matter will proceed to arbitration.

“PMA will be seeking the loss in value of its investments in Australia that will result from plain packaging,” Ms Edwards said.

“The damages may amount to billions of dollars.”

Federal Health Minister Nicola Roxon has pledged to introduce and pass the legislation this year and have it operational by January.

The legislation will ban all commercial branding from cigarettes, mandating olive-green packaging with prominent health warnings.

Graphic cigarette warnings labels, what’s next?

Cigarettes will now come with pictures conveying the dangers of smoking, including a man with a tracheostomy, a corpe of a smoker, and a woman smoking while holding a baby. The Food and Drug Administration has mandated that these new warning labels must be in place by 2012 and hope they will lessen tobacco use. American Cancer Society CEO John R. Seffrin is satisfied with the new labels and says they can “encourage adults to give up their deadly addiction to cigarettes and deter children from starting in the first place.” Time will tell if these warning will make a difference. I know they would scare me, but then again I’ve never smoked and I’m at an age where I’m not affected by peer pressure.

I am just wondering where this will lead. Will they start putting pictures of diseased hearts and clogged arteries on Happy Meals? Perhaps french fries will include a picture of an overweight child looking sad on the sidelines because he can’t keep up with his friends?

I cannot go down the cereal isle at the supermarket without my children asking me for Trix, Lucky Charms, etc. They get excited when they see the toys they can get in the box and my three-year-old daughter thinks the Trix Rabbit is “so funny.” Toys in Happy Meals, cereal boxes with cartoons on them, all aggressive marketing tools aimed at our children to beg mommy to buy their product. I know many will disagree with me on this, but I can’t really blame the company- they’re just targeting their consumers.

Why don’t some healthier breakfast foods catch on to this marketing? Put a prize in the oatmeal box, for crying out loud! How about for every carton of eggs you buy, one egg is the “surprise egg.” Instead of an egg coming out when you crack it, a chicken tattoo is inside. Surprise! I guess this could get kind of messy as your kids search for the prizes though.

In all seriousness, instead of scaring our kids to eat healthy, maybe we should try educating them first. Pediatric obesity numbers have been climbing for years, yet now it’s an epidemic? Can’t we be a little more proactive instead of so reactive? Some schools in our area ban sweets for holiday or end-of-year parties. I highly doubt that the one cupcake little Suzie is having at her party is what’s making her fat. How about educating her about sweets in moderation? Teach her the importance of eating healthy throughout the year to make her heart, muscles, and bones stronger. Ask my son why he likes broccoli and steak and he’ll tell you that it makes him smarter and stronger (than daddy).

The FDA can decide to ban toys in Happy Meals or cartoons on cereal boxes, but it all begins at home. It’s really up to parents to educate their children on choosing healthy foods. Stop blaming the commercials (turn the tv off), the schools (send lunch from home), and the cereal companies (don’t buy the cereal). I also think that banning your child from eating the occasional cookie or ice cream is a bad idea. There’s going to come a time when you’re not around to monitor him and he may not be able to control himself from eating 10 cookies. Sweets are not evil, they’re just meant for special occasions and in moderation. Be active as a family, let your children see you exercise, and make sure you’re eating the same healthy foods you want them to eat. If more parents set an example for their children, both the adult and pediatric obesity rates would go down in this country, guaranteed.

Tobacco settlement said to be near

A settlement appears in the works that could allow major tobacco manufacturers, such as R.J. Reynolds Tobacco Co., to keep billions in disputed Master Settlement Agreement money.

Multiple media sources reported Wednesday that 46 state attorneys general are reviewing a proposal to resolve the manufacturers’ claims that they have been hurt by nonparticipants of the landmark 1998 MSA agreement.

The four largest U.S. tobacco companies and the attorneys general agreed in 1998 to an MSA that would settle the states’ Medicaid lawsuits against the tobacco companies for recovery of their tobacco-related health-care costs. The agreement protected the companies against liability from lawsuits over the harm caused by tobacco use. Also, the companies agreed to curtail or cease some tobacco marketing practices, as well as to make payments to the states for some of the medical costs of people suffering from smoking-related illnesses.

The N.C. Attorney General’s Office and Reynolds declined to comment on the potential settlement.

The ripple effect of any settlement could be huge, even beyond its impact on the manufacturers, since many states use MSA money to pay for health care and economic-development initiatives. Some states have issued billions of dollars in bonds that are supported by the MSA money.

The MSA requires participating manufacturers to pay $206 billion to the states to resolve any liability related to health-care cost lawsuits.

It also set marketing limits on the companies — a pivotal part of the dispute.

The MSA has enabled cigarette makers that are not a part of the MSA to sell their products for less than the bigger manufacturers, grabbing significant market share. According to the National Association of Attorneys General, the U.S. market share of nonparticipating companies was 6.5 percent in 2010.

The manufacturers have said a provision allows them to pay less if they have lost market share to nonparticipants.

Since 2006, Reynolds has paid $12.34 billion in settlement money and also withheld $2.95 billion that’s been placed in an escrow account. It released $445 million from the account in February 2009 but still considers it part of the amount in dispute.

In July 2010, a panel of three former federal judges was established to arbitrate the nonparticipating-manufacturer adjustment for 2003. Reynolds said its portion of the 2003 money was $615 million. Reynolds spokesman David Howard said the case is in the discovery phase of the process.

Christopher Growe, an analyst with Stifel Nicholas & Co., estimates Reynolds could keep up to $3.5 billion in withheld payments, while Altria Group Inc., the parent of Philip Morris USA, could keep up to $2 billion.

“This apparent settlement would not only satisfy the arbitration over the 2003 MSA payments, but potentially lead to a complete settlement handling payments through 2010 as well,” Growe said.

One beneficiary of the MSA money is the Golden Leaf Foundation, created by the legislature to distribute tobacco funds to aid programs in agriculture, job creation and retention, and workforce preparedness. Another recipient is the state Health and Wellness Trust.

For example, Golden Leaf received $68 million in fiscal year 2010. From that money it provided $2.25 million toward buying equipment for projects involving Caterpillar Inc., NS Aviation LLC and Timco Aerosystems.

Dan Gerlach, president of the foundation, had no comment on the potential settlement.

Missing out on the disputed money also could remove a potential source of revenue for the state. The Republican-led General Assembly approved transferring $17.5 million of the foundation’s settlement money to the General Fund for the next two fiscal years.

Growe said he has expected a settlement to be reached since a third-party analysis consistently has backed the manufacturers’ view of lost market share.

Growe said some manufacturers may not get a refund, but rather a credit toward future annual payments.

Either way, Growe said, resolving the dispute in this manner would help stimulate the manufacturers’ bottom line and share prices, at least in the short term.

Growe said he expects the nonparticipating manufacturers to fight what settlement is reached.

“This is no doubt a blow to small manufacturers and Native American tribes selling cigarettes,” Growe said. “But it levels the playing field from a pricing standpoint and could serve to lift the deep-discount prices in the market.”

By RICHARD CRAVER
rcraver@wsjournal.com (336) 727-7376

Menthol cigarettes marketed in ‘predatory’ pattern

Tobacco companies increased the advertising and lowered the sale hot-cigs.biz/menthol-cigarettes-brands in stores near California high schools with larger populations of African-American students, according to a new study from the Stanford University School of Medicine.

Although cigarette makers have denied using race or ethnicity to target customers, the lead researcher for the study said the data shows a “predatory” marketing pattern geared to luring young African Americans into becoming smokers.

“The tobacco companies went out of their way to argue to the Food & Drug Administration that they don’t use racial targeting,” said Lisa Henriksen, PhD, senior research scientist at the Stanford Prevention Research Center. “This evidence is not consistent with those claims.”

Henriksen is the first author of this study, which was published online June 24 in Nicotine & Tobacco Research.

The study comes at a time when the FDA is gathering information on whether to ban menthol as a flavoring agent in cigarettes. A federal law passed in 2008 banned 13 candy flavorings in cigarettes but allowed for the continued use of menthol. Menthol makes the smoke from tobacco smoother and less harsh; even non- menthol cigarettes often have low levels of the substance.
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* » Point-of-sale advertising major cause of teen smoking, study shows

A draft report by the Tobacco Products Scientific Advisory Committee, which the FDA asked to investigate the harms from the use and marketing of menthol cigarettes, found that the use of menthol cigarettes is highest among minorities, teenagers and low-income populations. Advertisements often tout the “freshness” of menthol cigarettes, and the report said many smokers mistakenly believe that the addition of menthol makes cigarettes less of a health risk.

The committee’s report says that “removal of menthol cigarettes from the marketplace would benefit public health in the United States,” but the FDA doesn’t have to follow the group’s recommendation. The committee is scheduled to meet July 21 in Rockville, Md., to discuss final changes to the document. An FDA spokesman said the edited version of the report will be posted soon on the agency’s website, but there is no timeline yet as to when the FDA will make a decision on menthol.

“The committee was charged with considering a broad definition of harm to smokers and other populations, particularly youth,” said Henriksen. “We think our study, which shows the predatory marketing in school neighborhoods with higher concentrations of youth and African-American students, fits a broad definition of harm.”

In the Stanford study, Henriksen and her colleagues note that the preference for menthol cigarettes among teenage smokers increased from 43.4 percent in 2004 to 48.3 percent in 2008. Menthol cigarettes were also most popular among African-American smokers ages 12-17 (71.9 percent), compared to Hispanics (47 percent) and non-Hispanic whites (41 percent) of the same ages.

To find out how the leading brands of menthol and non-menthol cigarettes were promoted near California high schools, the researchers randomly selected convenience stores, small markets and other tobacco retailers within easy walking distance of 91 schools. The researchers then rated how the cigarettes were marketed in those stores. The data were collected in 2006.

The researchers found that for every 10-percentage-point increase in the proportion of African-American students at a school, the proportion of advertisements for menthol cigarettes increased by 5.9 percentage points. Additionally, the odds of an advertised discount for Newport, the leading brand of menthol cigarettes, were 1.5 times greater.

When it came to price, the average per-pack price for Newport was $4.37 at the time of the study, with Marlboro – the leading non-menthol brand – averaging $3.99. It also found that for every 10-percentage-point increase in the proportion of African-American students at the nearby school, the per-pack price for Newport was 12 cents lower. Advertised discounts and prices for Marlboro, however, were unrelated to school or neighborhood demographics.

“That’s important because lower prices tend to lead to increased cigarette use,” Henriksen said.

In addition, the study found that for each 10-percentage-point increase in the proportion of neighborhood residents ages 10-17, the proportion of menthol advertisements increased by 11.6 percentage points, and the odds of an advertised discount for Newport was 5.3 times greater.

Although the study was limited to California high schools, the authors believe the findings would be similar throughout the country.

“When kids are exposed to more cigarette advertising they are more likely to start smoking, which will undoubtedly lead to dire health consequences,” said senior author Stephen Fortmann, MD, a professor emeritus of medicine at Stanford who is now a senior investigator at Kaiser Permanente Center for Health Research in Portland, Ore. “Our study finds that tobacco companies are trying to make smoking more attractive to teens, when we as a society should be doing just the opposite.”

Given previous research that young smokers and African-American smokers are more sensitive to prices than other groups, Fortmann and Henriksen said they believe this study clearly shows how tobacco companies are trying to target black teens in marketing menthol cigarettes.

“Adding menthol to cigarettes makes it easier to smoke and harder to quit, so the public health community strongly supports an FDA ban on menthol flavoring,” Fortmann said.

Other co-authors include statistical analyst Nina Schleicher, PhD, and project manager Amanda Dauphinee.

The study was funded by the California Tobacco-Related Disease Research Program, which was created after state residents voted in 1998 to impose a 25-cent per-pack surtax on cigarettes to reduce the human and economic costs of tobacco use.

Information about Stanford’s Department of Medicine, which also supported the work, is available at http://medicine.stanford.edu

BY SUSAN IPAKTCHIAN

Now tobacco can save us from mobsters, whores, terrorists…

smoking in film
A SHORT film that appears to be based on a John le Carre spy novel – think people smugglers, prostitutes, terrorists – is the latest salvo in the tobacco industry’s battle against federal government plans to introduce plain packaging for cigarettes.

According to the seven-minute film by British American Tobacco, the proposal will cause organised crime gangs to flourish, encouraging the syndicates to use their networks to flood Australia with smuggled drugs, weapons and cigarettes.

Replete with scenes of menacing Russian mobsters, exploding cars, street prostitutes and drug-addled teens, the film is part of a global campaign to block Australian anti-smoking health reforms that could set a commercially damaging precedent for the international tobacco industry.
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The short film was panned as ”Z-grade fiction” by Quit Victoria, who reckon the film would be unlikely to earn a nomination at a Tropfest festival.

”I have no doubt people will see this for the big tobacco propaganda it is,” said the group’s executive director, Fiona Sharkie.

While the film seems to stretch credulity, a voice-over claims: ”Law enforcers say some gangs [that distribute counterfeit cigarettes] are also behind people, weapons and drug trafficking. Some have terrorist links.”

Australian law enforcement agencies, however, were reluctant to speculate on whether the introduction of plain packets would threaten national security or leave the nation awash with guns and drugs.

”It would not be appropriate for ASIO to comment on advertising,” said an ASIO spokeswoman.

Spokespeople for the Australian Federal Police and Victoria Police also declined to comment on the film, which has been released on YouTube and the company’s international website.

British American Tobacco Australia spokeswoman Louise Warburton refused to comment on the film when contacted by The Sunday Age.

She said the content was not ”Australia specific” and referred inquiries to the company’s London head office, where the film was produced.

”The links between cigarette smuggling and other forms of organised crime have been well documented and reported in recent years,” the company’s global spokeswoman, Catherine Armstrong, said.

”You may find this report by the International Consortium of Investigative Journalists [based in Washington] useful, as it contains a number of direct quotes from people in law enforcement, as well as details of the links between the forms of crime.”

The Australian Competition and Consumer Commission is already investigating the industry over claims in recent advertisements that plain cigarette packets would lead to a surge in children smoking counterfeit tobacco.

British American Tobacco Australia chief executive David Crow warned last month that plain cigarette packets would provide a ”field day” for organised criminals, who had profited from a 150 per cent increase in illegal tobacco sales in Australia in the past three years.

Last week, ABC’s Media Watch admonished Channel Nine’s A Current Affair over a story it did in conjunction with British American Tobacco Australia. The story featured a Malaysian triad member, who claimed he had smuggled people in shipping containers into Australian cities. The man, who had been provided to ACA by British American Tobacco investigators, said the organisation’s tobacco and drug trafficking operations had provided the template for their people-smuggling business.

Customs and Border Protection said there was no evidence to support the claim.

Could states block new FDA cigarette warnings?

Among all the recent efforts to criminalize free speech, Tennessee’s Legislature gets the top award for sheer chutzpah. As Ars cigs warnigTechnica reports, the state’s governor, Bill Haslam, this month signed a bill making it a crime to “transmit or display an image” that is likely to “frighten, intimidate or cause emotional distress” to anyone who sees it. Importantly, Ars notes that “if a court decides you ‘should have known’ that an image [would] be upsetting to someone who sees it, you could face months in prison and thousands of dollars in fines.”

While the whole statute stands on weak constitutional grounds, that last nuance seems particularly shaky — and dangerous. That’s because of the special jurisprudential protections granted to core political speech — much of which is consciously intended to upset those who are exposed to it. Indeed, you may be upset by that antiabortion group mailer showing a photo of a fetus, or you may be upset by the antiwar ad showing graphic images of battlefield violence, but that’s constitutionally protected speech (as is, by the way, your right to subsequently express your outrage at the images).

At least some Tennessee lawmakers who support the statute would no doubt insist that those examples have a “legitimate purpose,” which would exempt them from punishment. However, as Iowa State Daily columnist Claire Vriezen astutely points out, “the phrase ‘legitimate purpose’ is open to interpretation.” That “interpretation” part is no theoretical problem — it’s one that could hit courts very soon, thanks to Tuesday’s tobacco-related announcement by the Food and Drug Administration.

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Tennessee is a major tobacco-producing state, which suggests there will be no small number of Tennesseans who may feel “frightened, intimidated or emotionally distressed” by new FDA-mandated warning ads that, according to the Associated Press, “depict in graphic detail the negative health effects of tobacco use.” These ads, announced Tuesday, include images of “rotting and diseased teeth and gums and a man with a tracheotomy smoking” after a World Health Organization survey found more than 25 percent of foreign smokers said such graphic labels led them to consider quitting. (You can view all nine warning labels below).

The ads, in other words, pose a genuine threat to a major Tennessee industry that has lots of eager-to-litigate lawyers and lots of clout with politicians. Now, thanks to Tennessee’s criminalization of free speech, that industry can wield a new statutory weapon against the speech it doesn’t like. In a tobacco-state court composed of tobacco-state judges and tobacco-state jurors, this industry could realistically hope that such ads would be ruled illegitimate — and further, that those who disseminate the ads are criminals. By design, that would undoubtedly create both a chilling effect of self-censorship among tobacco distributors (convenience stores, vending machine owners, etc.), and an innovative legal rationale for the industry to ignore the FDA’s new warning-label mandate.

Of course, this all remains hypothetical right now. Big Tobacco, in fact, may not even be interested in such a court case, fearing that any extra attention to the FDA ads will only serve to educate more Americans about the negative health effects of smoking. But that’s not the point, because if it’s not the tobacco industry that attempts to hijack government censorship power then it will certainly be another industry — as has already happened in other states including Iowa, Florida, Ohio and Minnesota, where agribusiness has recently been trying to statutorily bar revelations about factory farms. In all of these cases, the bottom line remains the same: When the government criminalizes First Amendment expressions, all it is really doing is using state power to preference one set of voices over another.

By definition, that is the opposite of “freedom” and, when inevitably done for industry objectives, the hallmark of a Corporate Police State.

Senecas Prepare For New Era

Now that Seneca entrepreneurs may not be able to sell name-brand cigarettes tax-free, Seneca Nation officials are seeing “a new era” for Seneca businessmen.

A state appellate court ruled Tuesday against the nation’s bid to stop state attempts at tax collections of cigarettes sold to non-Indians on American Indian territory. It is the latest in a line of rulings against the nation in state tax collection attempts made for years.

Despite the ruling, Seneca President Robert Odawi Porter said he sees a new era for Senecas, one that involves selling brands manufactured on native territory, thereby sidestepping the state tax to be collected by wholesalers when they deliver product to Native retailers. Although Porter said the nation will seek review of the appellate decision allowing for the collections, he said non-taxable native brands will be sold instead of paying the state tax for premium cigarette brands.

“New York will never collect a cent of revenue from tobacco sales occurring in our territories, and revenue projections so indicating are foolishness,” he said about state reports of how much is expected to be made from the tax collections. According to state budget department staff, $130 million was included in the state’s 2011-12 budget in tax collections from the sales to non-Indians on American Indian land.

“Today marks the beginning of a new era in the nation’s tobacco trade and exercise of our sovereignty,” Porter said.

He said Senecas are manufacturing cigarettes on Seneca land, and the nation’s government will work with them “to ensure that our tobacco economy is sustained and regulated.”

“We will continue to block the state’s longstanding crusade to confiscate our national wealth, sacrifice native and non-native jobs and interfere with our way of life,” Porter said.

He said that while the state may be able to stop premium brands from coming to the territory without taxation, “it cannot tax the brands made in our territory or any of the Six Nations (of New York state.) We will never stop fighting the state’s predatory actions,” Porter said.

The state Taxation and Finance Department’s website reports collection procedures “will be implemented immediately.”

“Wholesale dealers (including agents) are required to collect the cigarette excise tax and prepaid sales tax on all cigarettes sold for resale on an Indian reservation to non-Indians and non-members of an Indian nation or tribe,” reports the site. “All packs of cigarettes sold by wholesale dealers to Indian nations and tribes and reservation cigarette sellers are required to have New York tax stamps affixed to them.”

Spokespeople in the state Attorney General’s office refused comment, and those from the governor’s office could not be reached to comment Tuesday.

Cigarette Makers, Arguing ’98 Pact Favors Small Rivals

Big cigarette makers could recoup $2 billion under a proposed deal with state attorneys general to resolve a long-running dispute over payments required by the landmark 1998 tobacco settlement.

Negotiators for Altria Group Inc.’s Philip Morris USA and other tobacco companies have reached a tentative deal with officials representing the 46 states that signed the 1998 Master Settlement Agreement, say people familiar with the matter.

The accord would allow big tobacco companies to keep part of the money they have withheld from states or otherwise disputed under the 1998 pact, under which they agreed to pay more than $200 billion to help states recover the costs of treating sick smokers.

States and the companies have battled over $7.1 billion that the companies argue they shouldn’t have to pay on sales from 2003 through 2010. The dispute revolves around the companies’ contention that they have lost business because states haven’t adequately sought payments from smaller competitors not party to the 1998 pact.

The bigger companies say some of those rivals enjoy cost advantages that allow them to sell cigarettes at lower prices, luring more customers in a sluggish economy. The states maintain that their authorities have done what is required under the 1998 pact.

Under the new deal, cash-strapped states would collect several billion of the disputed dollars. The deal also would rewrite rules related to how states collect fees and taxes from smaller companies that haven’t joined the 1998 settlement.

It’s not clear whether the new deal will pass muster. The parties won’t start drafting a final deal unless a “critical mass” of states and firms sign a memorandum of understanding detailing terms, according to a copy of the memorandum reviewed by The Wall Street Journal.

If it goes through, the biggest loser could be Native American cigarette companies, which have become strong competitors with their low-priced brands. The deal would require states to adopt rules forcing these companies to start paying state excise taxes and fees for sales on tribal lands, which could force them to boost prices. Lawyers representing Indian cigarette interests are threatening legal challenges.

What the states and companies “are doing is wrong by any sort of definition of fair play,” said Lance Morgan, chief executive of Ho-Chunk Inc., the economic-development arm of the Winnebago tribe in Nebraska, which distributes cigarettes on tribal lands. He argues the states, under the deal, would be attacking tribal economies to protect big companies’ market shares.

Native American brands, which include such names as Seneca, King Mountain and Mohawk, may account for as much as 4% of U.S. cigarette volumes, Morgan Stanley analyst David Adelman estimates.

Any sizable payback to companies could contribute to potential defaults by states that issued bonds backed by the flow of tobacco-settlement dollars, said Richard P. Larkin, a senior vice president atNew Jersey-based Herbert J. Sims & Co. who tracks state and municipal bonds backed by tobacco-company payments.

Altria, Reynolds American Inc. and Lorillard Inc. declined to comment. Brad Phelps, chief deputy attorney general in Arkansas and a key negotiator, said states involved in the talks “have no comment.”

The talks highlight how recession-wracked states have grown more dependent on the revenue stream from the 1998 pact and are trying to reach compromises to mollify tobacco makers, whose industry is grappling with steady declines in cigarette consumption.

Many states rely on the revenue for general-operating expenses and health-care programs. At least a dozen states, including California, New York and Ohio, have issued billions of dollars in bonds backed by the flow of tobacco-settlement dollars. More than $55 billion in such bonds are outstanding, according to Thomson Reuters.

Since 1998, the three largest tobacco companies and about 50 other companies that later signed the master accord have paid about $81 billion to states.

The current negotiations center on an “adjustment” provision in the 1998 settlement. That provision lets tobacco companies reduce their annual payments to states if their collective market share drops below certain thresholds and if they can show that states failed to create a level competitive playing field.

The companies inserted the provision because of concerns that smaller cigarette makers not subject to the costs of the agreement would grab sales.

States have enacted laws requiring the nonparticipating companies to set aside payments in escrow accounts. Last year, the U.S. market share of nonparticipating companies rose to 6.5%, the highest mark since 2004, when it stood at 8.27%, according to the National Association of Attorneys General.

To reduce their annual payment, the big tobacco companies must show that their market-share loss is significantly attributable to the agreement. They consistently have met that condition, according to rulings by independent consultants. An arbitration panel of three retired federal judges has begun reviewing the issue in deciding what to do about $1.1 billion in disputed 2003 payments.

How much the companies would receive through the new agreement depends on how many states sign and when. If all of the states and U.S. territories in the 1998 agreement sign on, the tobacco companies would receive at least $2 billion, according to a formula described in the memorandum of understanding.

By David Kesmodel
david.kesmodel@wsj.com

City to hold off on tobacco advertising ban

WORCESTER — A citywide ban on all visible tobacco product advertising will not be enforced starting Friday as scheduled, after the city and a group of tobacco companies agreed to stay enforcement while a civil action is pending.

The stay of enforcement was filed today in U.S. District Court in Worcester. The city and plaintiffs R.J. Reynolds Tobacco Co.; Philip Morris USA Inc., Lorillard Tobacco Co. and the National Association of Tobacco Outlets, agreed to the stay.

A portion of the city’s tobacco-control ordinance approved last month bans advertising of cigarettes and tobacco products visible from any city street, park, school or educational institution.
It is that section of the ordinance that is stayed until a hearing can be held in federal court. No hearing date has been scheduled.

The city and plaintiffs agreed enforcement of that section will be stayed until 14 days after the court’s ruling on the plaintiffs’ motion for a preliminary injunction.

The civil action filed Friday of last week asks for a judge to deem the ordinance in violation of the Constitution and the plaintiffs’ civil rights. They want a permanent injunction against the advertising enforcement section of the ordinance.

“We believe the ordinance violates our First Amendment rights to responsibility communicate with adult tobacco consumers,” R.J. Reynolds spokesman David P. Howard said this morning. “It is trying to prohibit communication of a legal product to adults who chose to use tobacco.”

There is case law that backs the tobacco companies, Mr. Howard said. A past U.S. Supreme Court decision involving Lorillard versus former state Attorney General Thomas F. Reilly shot down state regulation prohibiting outdoor advertising of tobacco products within 1,000 feet of a school or playground.

City Solicitor David M. Moore said the city anticipated legal action after the ordinance was approved.
“What Worcester did is something that no other city has done, and this is pose an advertising restriction,” he said. “You won’t be able to drive anywhere in the city and see a tobacco advertisement. That is what the ordinance does.”

While the tobacco companies argue First Amendment rights, it appears the city is basing its ability to approve such a regulation on the Federal Family Smoking Prevention and Tobacco Control Act of 2009.

The act opened the door to local regulation of tobacco advertising, something before regulated only by the federal government.

City officials working on the ordinance found that almost 24 percent of adults in the city over 18 smoke. That rate is nearly 1 1/2 times higher than the statewide average of 16 percent.

By Scott J. Croteau
TELEGRAM & GAZETTE
scroteau@telegram.com

Setback spurs Senecas to top N.Y. appeal

SENECA-CIGARETTES

In the wake of Tuesday’s court ruling that dealt the Seneca Nation a setback in its bid to block the state from taxing tobacco sales to non-Indians on its territories, Seneca President Robert Odawi Porter vowed to take the dispute to the state’s highest court.

Porter struck a defiant tone over what he called “the state’s predatory actions.” He reiterated the Senecas’ stance that they manufacture their own brands of cigarettes for sale to Indians and non-Indians in reservation stores exempt from state taxation.

“We will continue to block the state’s long-standing crusade to confiscate our national wealth, sacrifice native and non-native jobs and interfere with our way of life,” Porter said.

He added that the Senecas would seek a review of Tuesday’s decision by the state’s Court of Appeals.

In a one-page decision, the five-judge Appellate Division of State Supreme Court upheld a June 8 ruling from State Supreme Court Justice Donna M. Siwek and vacated a June 9 temporary restraining order that Associate Justice Jerome C. Gorski later granted to the Seneca Nation.

Siwek had denied the Seneca Nation’s bid for a preliminary injunction to prevent the state from collecting $4.35 on each pack of cigarettes sold by any Indian tribes in the state to non-Indians.

“The administration will move expeditiously to collect the taxes,” said Josh Vlasto, a spokesman for Gov. Andrew M. Cuomo.

The full intermediate appellate court reviewed motions filed by Seneca Nation attorney Carol E. Heckman and Assistant State Attorney General Andrew D. Bing. The Rochester court did not hear oral arguments in the latest stage of the tax fight, which dates from 1988.

The full appellate court Tuesday ruled only on the Senecas’ attempt to prolong Gorski’s temporary restraining order. “For more than 200 years,” Porter said, “the Seneca Nation has thwarted New York State’s efforts to steal our land, destroy our sovereignty and tax commerce in our territories. In our treaties with the United States, we gave up most of our land to retain the ‘free use and enjoyment’ to conduct business in our remaining territories free from the state’s taxes.”

Data provided by state officials to Siwek earlier this month said the state loses at least $110 million a year in tax revenue based on tax-free cigarette sales by Indian businesses.

“New York will never collect a cent of revenue from tobacco sales occurring in our territories, and revenue projections so indicating are foolish,” Porter said.

“While the state may be able to embargo, through taxation, premium brands from entering our territory, it cannot tax the brands made in our territory or any of the Six Nations. We will never stop fighting the state’s predatory actions.”

The Seneca Nation, one of the Six Nations of the Iroquois Confederacy, boasts of currently operating a $1.1 billion economy with more than 6,300 employees.

By Matt Gryta
mgryta@buffnews.com

Tobacco giant wants to ship more PHL products

Having captured 92 percent of the Philippine cigarette market, Philip Morris Fortune Tobacco Inc. (PMFTC) on Monday bared plans to maximize the capacity of its Batangas plant by exporting more of the company’s products.

“The company believes it has satisfied the local demand. It is now focusing on increasing the export of excess production to other affiliates in the world,” said PMFTC official for public affairs and contributions Amy Eisma on the sidelines of the 5th Bright Leaf Awards in Pasay City.

PMFTC spokesperson Elmer Mesina explained that the company has identified new sites for tobacco expansion in Visayas and Mindanao “to support the company thrust of expanding exports to other affiliates.” It is also testing soil compatibility and weather conditions in Visayas and Mindanao, PMFTC said.

The company is now exporting raw tobacco to South Korea and Malaysia.

PMFTC also said cigarette shipments to Thailand have remained steady despite a pending case filed by the Philippine government before the World Trade Organization regarding Bangkok’s policy on imported cigarette taxes.

Meanwhile, anti-smoking advocates have called for an increase in cigarette tax and make smoking less affordable for children and teenagers. Smoking is a P400-billion a year industry in the Philippines and ends up worsening poverty, according to government statistics.

Tobacco Ban in Hennepin County Buildings Starts Soon

It’s been more than 10 years since the Hennepin County Board of Commissioners banned smoking in county buildings.

Fast forward to 2008 when the county decided on policy that restricted smoking within a “45-foot radius of street-level entrances of county-owned buildings” and banned the county’s employees from smoking while working or while in a Hennepin County vehicle.

Effective in 2011, the Hennepin County Board of Commissioners has been put into place has put more policy in place. This time, the focus expands to all forms of tobacco. The ban includes smoking and use of any other form of tobacco, including chewing tobacco.

The policies relating to prohibiting tobacco use on all property owned by Hennepin County government was approved by the Hennepin County Board of Commissioners in March 2011, according to a news release from the county.

“By making our campuses tobacco-free, we’re beginning an era of cleaner facilities and lower costs – and hopefully getting folks to reconsider smoking altogether,” said County Board Chair Mike Opat.

Depending on where you live in the county determines when the policy goes into effect during the summer of 2011. For example, the policy goes into effect July 1, 2011 for all Hennepin County government property in downtown Minneapolis. Sites like the Maple Grove Library will have the policy will go into effect Aug. 1, according to Hennepin County Representative Carla Biermaier.

The policy goes into effect for other sites as follows:

  • Hennepin County libraries – Aug. 1
  • Suburban Hennepin County facilities – Sept. 1
  • Hennepin County sites where Hennepin County is the single leasing tenant – Oct. 1

“This new policy prohibits the use of tobacco anywhere on county-owned property – which, in the case of libraries, means anywhere in the buildings or on the grounds and in parking lots and ramps,” Biermaier said.

The new policy, according to the county, applies to:
·        Buildings and grounds of property owned by Hennepin County government and leased properties where Hennepin County is the sole tenant
·        Parking garages, lots and ramps owned by Hennepin County government
·        County-owned vehicles and equipment
·        Personal vehicles on county property
·        Tobacco use within 45 feet of street-level entrances to county buildings.

By Wendy Erlien

Unpaid smoking fines grow as state funds cut

As state funding for enforcement of Ohio’s smoking ban approaches its end, unpaid fines in Lucas County and throughout the state are piling up.

Less than one third of $2.3 million in fines assessed since the law took effect five years ago has been collected. In Lucas County, roughly $13,000 has been paid — not even a dent in the $245,500 that’s owed.

This is all growing while cash-strapped Ohio is expected to stop paying the Toledo-Lucas County Health Department $125 to investigate each report of a violation of the law forbidding smoking in public buildings.

No money for following up on complaints of alleged smoking violations is contained for any local health department in Gov. John Kasich’s proposed $55.7 billion, two-year budget. The state provided $1 million for that purpose this year.

Funding for the “quit line” that helps smokers kick the habit also would be cut by 83 percent.

Still, local health officials say they’re not going to back off from enforcing the smoking ban. Toledo in 2003 enacted its ban — well before the state — so there’s a local history of opposing smoking in public, said Alan Ruffell, the department’s environmental health director.

“We’re committed to enforcing the rule,” Mr. Ruffell said. “We took the lead on the smoking ban. We had our ban before the state ban took effect.”

With the enforcement funding cut in the budget, advocates also are calling for financial support from the state. One way to raise $50 million annually for smoking ban enforcement, cessation assistance, and other programs would be to increase the tax on noncigarette tobacco products, including small filtered cigars that have been gaining popularity, said Shelly Kiser, advocacy director for the American Lung Association of Ohio.

Ohio’s $1.25-a-pack tax on cigarettes is about 55 percent, while the tax on cigars and other products is 17 percent, Ms. Kiser said. Some lawmakers have expressed interest in the idea of equalizing the taxes, but so far none has championed it, she said.

“It’s a lot cheaper to buy these things,” Ms. Kiser said. “The use of these other tobacco products is going up.”

Because of the funding declines, local health departments are weighing other options. Hiring someone to do inspections so the department doesn’t have to pay existing employees overtime on nights and weekends is among cost-cutting options the Toledo-Lucas County Health Department is considering, Mr. Ruffell said.

The Wood County Health Department may have to turn enforcement over to the state, which would be a disappointment to voters who supported the ban, said Brad Espen, the department’s environmental health director.

The Williams County Health Department, Van Wert County Health Department, and 35 other local health departments already have turned enforcement over to the Ohio Department of Health, which currently has one employee spending 1,000 hours a year doing investigations, or about 20 hours a week.

“I’m concerned that we will see an increase in smoking in public places again,” said Mr. Espen, adding that smoking-ban complaints in Wood County have declined by more than half. “We’ve made a great start, and it would be a shame to give up the program.”

Smoking-ban advocates say a decline in state funding for prevention and cessation programs already has had a negative effect. At one time, tobacco settlement funds had supported those programs and, more recently, smoking ban enforcement, and the state’s telephone tobacco ”quit line.”

After falling off in 2008, the percentage of adult Ohio smokers also is on the rise, while the rate among Michigan residents and Americans overall continues to decline, according to 2010 data from the Centers for Disease Control and Prevention.

Last year, 22.5 percent of adult Ohioans smoked, up from 20.3 percent in 2009 and 20.1 percent in 2008. In Michigan, 18.9 percent of adults smoked last year, and 17.3 percent did nationwide, according to the CDC.

The Toledo-Lucas County Health Department and other groups are in the midst of updating local statistics on smoking and other health-related factors. The last study, from 2007, showed 23 percent of Lucas County adults smoked, down from 29 percent in 2003.

Holly Kowalczk, a tobacco treatment specialist at St. Luke’s Hospital, said she believes smoking is on the rise in northwest Ohio. Local residents have lost their jobs and health-insurance coverage, and it’s cheaper to buy cigarettes than pay for smoking cessation treatment, she said.

“Historically, we’re a very high tobacco use area,” Ms. Kowalczk said. “As times get tougher, our vices … go up.”

Funding for Ohio’s ”quit line” for smokers also could be reduced under the two-year state budget being discussed. There is $1 million for the line in the state’s proposed budget for the fiscal year starting July 1, down from $6 million, but it is slated to receive no state support during the fiscal year starting July 1, 2012.

Smoking, however, every year costs Ohio nearly $4.4 billion in health-care expenses and another nearly $4.9 billion in lost productivity, according to the American Lung Association of Ohio.

St. Luke’s Hospital continues to have a comprehensive Tobacco Treatment Center, even as state funding for cessation programs largely has dried up. Established about 15 years ago and financially supported by the Maumee hospital, the center addresses prevention, cessation, and intervention in 16 local school districts; provides programs for employers; has a free weekly support group; and does both inpatient and outpatient services.

“St. Luke’s has made a commitment to continue doing this,” said Ms. Kowalczk, adding that the hope is to spread services throughout new parent company ProMedica.
The Toledo-Lucas County Health Department currently has a $52,000 grant from the Ohio Department of Health, which is down from $75,000 last year, said Stuart Kerr, tobacco prevention coordinator.

Last year, the health department started working with Neighborhood Health Association and other medical providers so they can educate patients about the dangers of smoking. School regulations and enforcement are part of the grant’s focus this year. The hope is to add cessation programs to the health department’s slate, as well as educating students, Mr. Kerr said.

The concern, though, is that all money for programs advocating non-smoking and ban enforcement will dry up, he said.

“I kind of feel that the state is making money by taxing the product, and some of it should be put back into education and enforcement activities,” Mr. Kerr said.

Many neighborhood bars and other smoking-ban opponents continue to hold out against the law, which was built around using fines to help pay for enforcement. Among their assertions is that the ban is unconstitutional, as enforcement has focused on fining business owners, not actual smokers as allowed by the law.

Collection rates for Lucas County are at roughly 5 percent. Three Toledo bars — Rip Cord, Delaney’s Lounge, and Mayfly Tavern — account for more than half of the $245,000 owed in Lucas County.

“Until the state starts collecting the fine money, I’m sure they’ll continue to do what they’re doing,” said Mr. Ruffell of the Toledo-Lucas County Health Department. “That’s where the system is weak.”

Ban opponents claimed a victory when Toledo’s Pour House bar successfully fought a $500 fine, receiving a court ruling the bar could not be penalized because a smoking patron disobeyed. A Pour House bartender had told the patron he couldn’t smoke, but the bar was fined after the man left a cigarette burning in a mint tin.

Other lawsuits could have broader implications.

A lawsuit pending before the Ohio Supreme Court involves a Columbus bar, Zeno’s Victorian Village, that has not paid mounting smoking ban fines.

Until a decision is made on that lawsuit, which could take six to eight months, Lucas County Common Pleas Court lawsuits against Rip Cord and Mayfly Tavern seeking fine payments have been put on hold, said attorney Maurice Thompson of 851 Center for Constitutional Law, which represents both Toledo bars and Zeno’s.

If bar owners put signs up about the smoking ban, remove ashtrays, and take other measures to notify patrons that smoking isn’t allowed in their establishments, they should not be fined, Mr. Thompson said. Smokers breaking the ban should be fined by health departments, but are not, he said.

“They’re just picking and choosing what part of the law they want to enforce,” Mr. Thompson said.

Michigan — which is wrapping up the first year of enforcing its smoking ban — is not seeing such legal opposition and has had few complaints of violations to its smoking ban.

Michigan’s law has some key differences from Ohio’s.

Patios in Michigan are not exempt from the smoking ban unless no food or drink is served on them. But Michigan allows smoking in cigar bars, specialty tobacco shops, and in Detroit casinos.

Plus, local health departments in Michigan can order cease-and-desist orders on businesses not complying with the law after other options have been exhausted.

Infractions have not been an issue in Monroe County, where only a couple of complaints have been filed since enforcement of the ban started and no fines have been levied, said Harry Grenawitzke, acting health officer for the Monroe County Health Department.

“It’s been going well,” Mr. Grenawitzke said. “It’s been pretty well accepted.”

Across Michigan, only 117 fines have been levied, and there have been less than 1,500 violations reported, said Orlando Todd, tobacco program specialist at the Michigan Department of Community Health.

Unlike other states, citations are not the main thrust of Michigan’s smoking ban, Mr. Todd said.

“We’re concerned more about education on getting compliance,” he said.

By Julie M. McKinno, jmckinnon@theblade.com, 419-724-6087.

A puff of flavor: Cigar talk

With Father’s Day approaching, it might be a good time to help dad indulge in the time-honored experience of puffing on an expertly rolled cigar. While popular sentiment and government bans sometimes make it necessary to take pains to enjoy a good smoke, the experience can still be rewarding.

Consider the quiet joy that can be found during a long walk down a country road alone, save for one’s favorite cigar. Don’t know enough about cigars to feel confident buying them? The Capital District shops noted here have friendly, knowledgeable staffers ready to help shoppers make the right choice, no matter what their level of tobacco knowledge.

Selecting the right cigar

“Cigar-smoking is highly individual and subjective,” says Scott Bendett, founder and proprietor of Habana Premium Cigar Shoppe in Albany. “It’s a matter of taste.”

If you don’t know what you’re looking for, Bendett or a staff member can make suggestions. Habana Premium features numerous brands, a walk-in humidor and cigars flavored with vanilla, rum, cappuccino, honey and mandarin.

“We love talking with gift shoppers to help them make a good selection,” says Rich Albers, assistant manager at Park Lane Tobacconist in Clifton Park. “There’s no reason to feel intimidated.”

According to Albers, things to consider include how long the person has been smoking; if they prefer a mild or robust cigar, in a large or small size; and if they have a brand preference.

“The occasional smoker generally wants a milder cigar,” says John Zyniecki, coproprietor of EdLeez Tobacco in Albany. “The regular smoker usually likes a more flavorful cigar.”

When buying cigars for a special occasion, Zyniecki says most shoppers choose a “limited cigar,” such as an Opus X. Ranging in price from $15 to $20 per cigar, these are typically the items most smokers appreciate but do not regularly buy for themselves and are made in limited quantities. Brands such as Ashton, Arturo Fuente, CAO, Camacho, Davidoff, Cusano and Macanudo also make high-end cigars.

Cigar talk

The cigar world has a vocabulary all its own, and a good tobacconist should be able to explain the points of a cigar’s three main components: wrapper, filler and binder. While some machine-made cigars are very good, the handmade versions will always be the most sought-after among cigar cognoscenti. Master blenders use leaves from different regions, harvests and countries to create flavors and other characteristics for various tastes.

“A handmade cigar is based on the blender’s experience,” Bendett says. “It’s a work of art.”

A cigar’s wrapper or outer covering is made from a tobacco leaf that’s often different from the filler and binder, and provides most of its flavor. With cigars, appearances matter and can provide the first clues as to what may be in store for a smoker. Wrapper color can range from light tan (claro) to an almost black-brown (maduro), with many variations. Wrapper color however, should be rich, even and smooth with a slight shine from the oil that naturally occurs in the leaf. This is usually more obvious on cigars with darker wrappers.

When examining a box of cigars, color should be consistent. Wrappers should also be free of leaf veins, cracks or tears.

Filler makes up the majority of the cigar’s interior, and the best come from Honduras, the Dominican Republic and Nicaragua. Long-filler cigars demand a premium over medium- and short-filled versions. Long-filler cigars “burn” more smoothly and must be puffed to keep from going out. Short-filler cigars burn quickly, as the tobacco length resembles that found in cigarettes.

Once filler is shaped and blended, the binder is added and the cigar is rolled. It is then put into a mold until ready to be wrapped. Usually the thicker tops of the tobacco plant are used as binder, with the better ones coming from Cuba, Connecticut, Mexico and Ecuador. Recently, Java and Sumatra binders have become sought-after, as they’re durable and flexible.

A cigar with a light-colored outer wrapper typically means it will be mild. Terms used to describe cigars are difficult to define because they often mean different things to different people. “Mild” to one smoker may translate as “weak” to another. While some seek a “robust” or “full-bodied” cigar, others may find such traits “overpowering.”

Shape of things to come

The variation on cigar size is almost limitless. The most popular shapes are robusto, toro and Churchill.

Cigars are measured by length and width. Length is done in inches; width is measured in ring gauges. One ring is 1/64th of an inch.

A typical robusto is a 50-ring gauge and 5 inches in length. A manufacturer may create a “gran robusto,” which will be longer or wider. A toro reaches 6 inches and is usually a 50-ring gauge. Churchills are narrower at 48-ring gauge, but stretch to 7 or 71/4 inches in length. Other popular sizes include corona (the larger version of robusto), panetela (a long, thin cigar) and lonsdale (longer than corona, but shorter than panetela). One manufacturer’s petit corona will probably overlap with another’s robusto. The “torpedo” is slightly irregular in composition, about 6 inches long, pointed at one end and a bit fatter in its center (about 54-ring gauge).

While many cigar makers boast “Cuban seed tobacco” as an ingredient, it is difficult to verify, and most smokers agree better tobacco now comes from the Dominican Republic. “Tobacco is a product of the soil and other agricultural conditions,” notes Bendett. “Dominican agricultural practices and conditions enable tobacco to age better and retain its flavors very well.”

Dominican tobacco typically starts off mild, but builds in intensity as smoked. The taste tends to hit the entire palate and stimulate all receptors in the smoker’s mouth while the aroma can be sweet and floral. Nicaraguan soil is low in acid and produces a harsher tobacco. Cuban products are illegal in the united States.

“Lots of customers compare the costs of cigars with prices offered by Internet merchants,” says Bendett. “This is especially true for New York smokers, because we live in a high-tax state for tobacco products. With Internet purchases, you have no knowledgeable guide and can’t get a sense of the cigars’ condition. You have no idea how they’ve been stored or handled.”

Most cigar shops also sell other merchandise that can make good gifts, such as cutters, humidors, cases, lighters, pipes, pipe tobacco and high-end cigarettes.

Joseph Finora is a freelance writer in Laurel (Suffolk County).

Where to buy
EdLeez Tobacco, Stuvesant Plaza, Guilderland, 489-6872
Habana Premium Cigar Shop, 1645 Central Ave., Albany, 690-2222
James & Sons Tobacconists, 360 Broadway, Saratoga Springs, 581-7274
Park Lane Tobacconist, 15 Park Ave., Clifton Park, 371-6274

Merchants Learn Importance of Checking IDs for Beer, Cigarettes

The first line of defense to keep young people from becoming addicted to alcohol and drugs just might be the local grocery store.

A “Merchant’s Roundtable” was held Tuesday at Moundsville’s Grand Vue park, presented by the Marshall County Anti-Drug Coalition and the Ohio County Substance Abuse Coalition. They are explaining how to make it clear to their customers that they won’t sell beer or cigarettes to juveniles.

To card every customer or only those whose age is questionable is up to each merchant to make the decision.

Merchants know all too well that a 50-year-old buying a pack of cigarettes, who didn’t bring his driver’s license into the store, can become hostile when he’s told, “no ID, no sale.”

But that same 50-year-old might be buying those cigarettes or that beer for an underage person.

The alcohol and drug abuse prevention experts suggest to merchants that by having a clearly posted policy saying they card every alcohol and tobacco customer, can protect them from tirades about being unfair.

According to Susan Oglinsky with the Substance Abuse Prevention Coalition, a new campaign has been unveiled and it’s called United in Prevention which encourages people to hold up Ids so it can show if it’s red or blue, the kids are underage. If it’s white, then go ahead and sell, Oglinsky added.

They passed out marketing materials which included door signs, stickers, even pins for merchants to wear, saying, “We hold up Ids.” And while some customers will complain, others want to see them do this.

By D.K. Wright

Oregon Health Plan Members Have a Strong Propensity to Smoke

The latest statistics show that 37 percent of adults on the Oregon Health Plan are lighting up, which is of grave concern because of the high healthcare costs associated with smokers who may develop lung cancer, emphysema, asthma and other illnesses.

These statistics come from a 2007 Consumer Assessment of Healthcare Providers and Systems (CAPHS) survey of health plan members and is based on self-reported smoking status among clients on fee for service and managed care. It compares with a 13 percent smoking rate among adults who have other insurance, according to Alissa Robbins, communications officer with the Oregon Health Authority.

In 2007, there were 151,000 adult Medicaid participants. Of those, 51,000 reported that they smoked.

A more recent CAPHS survey was conducted in 2010, which includes smoking prevalence, and that data will be available soon, Robbins told The Lund Report.

High tobacco use “drives costs that are not sustainable over the long term,” Jon Pelkey, quality improvement and medical section manager of the Oregon Health Authority, told the medical directors in early May. “This is such a critical issue to get right.”

The state’s transformation efforts to create coordinated care organizations, bringing together physical, mental and dental healthcare, won’t succeed unless tobacco prevalence decreases, Cathryn Cushing, who leads the Oregon Public Health Division’s tobacco control integration project, told the medical directors.

“We’re sunk” if no action is taken, she said. “We’re going to have to manage the population a lot better than we are right now. We need to throw as much as we can behind this effort. It reduces suffering in families, and it will eventually reduce costs to have a healthier population to deal with.”

With the economy waning, more people have come into the Oregon Health Plan, many of them smokers, said Dr. Lyle Jackson, president of Mid Rogue Valley Independent Physician Association. “We’re getting people all the time who’ve never been in managed care. They’re the working poor. They’re more likely to be smoking than a disabled child.”
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Cushing suggested that physicians ask their patients whether they smoke, and, if so, whether they’d be interested in quitting. Such data, she said, could help tailor prevention and treatment programs.

But Dr. John Sattenspiel, senior medical director of Eugene-based Agate Healthcare, said “it would be a huge amount of work” to document each conversation a physician has with their patients.

“We establish contracts,” he said. “Ultimately, those services are delivered in their offices. We don’t look over their shoulders and tell them how to practice, and what the content of each their encounters should be with patients.”

“We try to ask,” said Dr. Ariel Smits, a family physician at Oregon Health & Science University. “If it’s a complicated patient, and they need their depression medication, I may not be able to talk to them about tobacco. We need some flexibility.”

Kaiser Permanente has had a return on investment with its tobacco cessation programs, according to Jeffrey Fellows, PhD, health economist at Kaiser Permanente Northwest’s Center for Health Research.

“Tobacco control interventions have been demonstrated to be cost effective,” he said.

The majority of people who quit smoking are those who’ve had a “come to Jesus moment” when they’re diagnosed with a health condition directly correlated with their smoking. “Being a quitter is a signal that you’ve got health problems,” he said.

The goal of a tobacco cessation program, he said, is “to turn these expensive quitters who are quitting under duress into healthy quitters.”

Kaiser conducted a study of various intervention strategies to determine the cost benefits of a tobacco cessation program, using the records of 200,000 patients of whom 34,000 represented current smokers.

Overall, people who chose to continue smoking left the health plan, while those who quit, stayed, which resulted in savings. What the study shows, Fellows said, is that “helping patients quit is good business.”

There is, he added, “more to fear from sicker quitters staying, than healthy quitters who leave.”

Increasing the tobacco tax is one of the most effective ways of pursuing tobacco cessation, said Cushing, because prevalence decreases rapidly and detectably. Fellows referred to such a tax as a “sledgehammer” approach.

However, four bills introduced this session that would have increased the state’s tobacco tax between $1 and $2.42 have died.