Mo. measure targets small tobacco firms

A proposed Missouri ballot measure poses the question: Should a $1 per pack tax be imposed on cigarettes made "by certain tobacco product manufacturers?"

Left unsaid is that the tax would not apply to the biggest tobacco companies, which sell the majority of cigarettes. What's meant by "certain" tobacco makers is primarily the smaller companies, which sell cigarettes at the cheapest prices.

Although it's dubbed the "Healthy Missouri Initiative Petition," the measure appears to come not from health care groups but from large tobacco companies, which have been losing market share to upstart companies that were not part of the 1998 settlement among big tobacco firms and attorneys general in 46 states.

The proposal highlights the extent to which tobacco companies are willing to battle in Missouri, which has the nation's lowest cigarette tax and one of the nation's highest adult smoking rates.

The 1998 settlement calls for participating tobacco companies to pay more than $200 billion over 25 years to states. Laws enacted in those states also require companies that did not participate in the settlement to pay money into escrow funds based on the amount of cigarettes they sell. Those escrow accounts are intended to cover any future lawsuits against the companies and prevent them from enjoying significant price advantages that cut into the market share of big tobacco companies.

Yet the large tobacco companies -- and many state attorneys general -- contend those escrow laws left a loophole that requires states to refund any money that exceeds that state's percentage share of the national settlement with the big companies. The result is that some smaller tobacco companies are refunded almost every dollar they put into the escrow fund -- negating the financial strain that otherwise could have caused them to charge more for their product.

Despite the lobbying efforts of big tobacco companies, Missouri remains the only state in the 1998 settlement that has not subsequently passed legislation cutting those escrow refunds to smaller companies.

The battle between big and little tobacco companies matters to states because it affects their already strained budgets. When large tobacco companies lose market share, they can argue that states have failed to adequately seek payments from the companies that didn't participate in the settlement. In such scenarios, the settlement agreement allows big tobacco companies to reduce their annual payments to states. The Wall Street Journal reported last week that big cigarette companies could recoup up to $2 billion under a proposed deal with state attorneys general related to the growing market share of companies that aren't part of the settlement.

Having failed to change Missouri's tobacco escrow law, the proposed ballot measure appears to be an alternative way for big tobacco companies to cut into the profits of their smaller rivals by imposing a tax that only affects companies who are not parties to the national settlement. An estimate by the state auditor's office says the tax could raise $20 million to $100 million annually, which the initiative earmarks for programs that discourage tobacco use and for the attorney general's enforcement efforts of the settlement agreement.

Tobacco companies that did not participate in the settlement contend it's unfair to make them pay them -- either to an escrow fund or through higher taxes -- for the deceptive marketing campaigns conducted years ago by big tobacco companies.

Keith Burdick, managing partner of Xcaliber International Ltd based in Pryor, Okla., notes that his cigarette company didn't get started until 2001, a few years after the settlement. To make his company pay into an escrow fund is like a city requiring motorists who are merely passing through to pay $50 to City Hall in case they do something wrong the next time they drive through town, Burdick said. The Missouri ballot proposal is equally wrong, he said.

"We don't see it as really fair -- you tax one group and not the other," Burdick said. "It's got Altria's name written all over it."

A spokesman for Altria Group, the nation's leading cigarette maker, declined to comment about whether the company sponsored or supports the Missouri ballot proposal. A spokesman for Reynolds American Inc., another top cigarette maker, did not return repeated phone calls or emails seeking comment.

The ballot initiative was filed by Jefferson City attorney Marc Ellinger, who in 2006 represented a group funded primarily by Reynolds that opposed an 80-cent per pack tax increase for all brands of cigarettes. That measure was narrowly defeated by voters.

Ellinger said his client had forbidden him from revealing its identity or discussing the current initiative.

It remains to be seen whether the initiative's secretive sponsor actually will attempt to collect petition signatures to qualify for the 2012 ballot. The initiative was filed with the secretary of state's office a day before the end of this year's legislative session -- suggesting its main purpose may be to put pressure on legislators to pass a law targeting the tobacco companies that weren't part of the settlement.

Political consultant John Hancock, who worked on behalf of the failed 2006 ballot initiative, now is coordinating a group called Citizens to Stamp Out Cheap Cigarettes. He says the group has no financing and did not initiate the latest ballot proposal, though it does support it.

"Having the cheapest cigarettes in America is not something to be proud of," Hancock said. "This approach is one of a number of mechanisms to address that concern."

Tobacco sales to minors at record low

Retailers in the USA sold tobacco to minors 9.3% of the time, the report by the Substance Abuse and Mental Health Services Administration (SAMHSA) shows. The statistics are gathered as part of the Synar Amendment program, a federal-state partnership to curb tobacco sales to minors. The 2010 rate of 9.3% is the lowest in the program's 14-year history.
"It's really good to see the rate go down, especially after it went up last year," says Danny McGoldrick, vice president of research at the Campaign for Tobacco-Free Kids.
In addition, 34 states had violation rates of less than 10% in 2010, up from 22 states in 2009.
Violations increased in 14 states, despite the national downward trend. Idaho, Maryland and New Hampshire, states with some of the highest rates of violations, saw rates increase from 2009.
The record low follows an uptick in tobacco sales to minors that occurred in 2009, where 10.9% of retailers had violations. The increase was the first in the program's history. It was also the highest rate since 2005.
Susan Marsiglia Gray, Synar coordinator for SAMHSA, says a tough economy led some states to make cuts to underage tobacco enforcement programs, which may have helped lead to the increase in underage sales.
Gray attributed a return to sales decreases in 2010 in part to the Family Smoking Prevention and Tobacco Control Act, signed by President Obama in 2009. Under the act, the FDA helps states conduct compliance checks of retailers. Gray also says some smaller outlets, which may have been more likely to sell to minors, have gone out of business.
The statistics are gathered through random, unannounced inspections of retail outlets. Under the Synar program, states must have a violation rate of 20% or less to be in compliance. The year 2010 marked the fifth year all states have been in compliance.
Though states have been in compliance for several years, efforts to decrease actual tobacco consumption by minors has stalled, Gray says. Minors may not be able to buy tobacco from retailers, but older siblings and friends still can. While taking away minors' retail access to tobacco is an important part in lowering consumption, it's not the only thing needed.
"States really need to take a comprehensive approach in reducing youth tobacco use," Gray says.
States with a low rate of violations tend to attack the issue at several levels, including merchant education and community pressure. Parents also play an important role. "We know one of the best ways to affect kids is to affect adults," McGoldrick says.

Tobacco Board chief asks traders to make purchases as promised

Tobacco Board Chairman S Kamal Vardhan Rao has appealed to the Tobacco traders to meet their promise to buy 180 million kg of Tobacco for at least Rs 120 per kg from growers.
Speaking at a meeting here, he said that they should not cite decline in export orders to go back on their commitment.
"Based on the written undertaking of India Tobacco Association, the farmers planned their production. Do not betray them", he observed.
Responding to the chairman''s exhortation, the leaders of the Indian Tobacco Association assured to honour their commitment on the quantity of tobacco but declined to give assurance on the price. Besides, they also pleaded for re-opening the auction platform.
But the chairman wondered how the farmers could bring produce to the auction platforms in the absence of a firm commitment about price.

Parents warned about new 'tobacco sticks'

A new tobacco product being sold in Kansas has prompted warnings from state health officials, who say the tiny "smokeless tobacco sticks" could pose a danger to children.
Altria Group Inc., the parent company of Philip Morris USA and U.S. Smokeless Tobacco Co., recently began test-marketing the tobacco-coated sticks at select retailers in Kansas, including Wichita, said company spokesman Ken Garcia.
The sticks, sold in matchbook-like packs under the brand names Marlboro and Skoal, are aimed at adult smokers and snuff users who want a smokeless, spit-free alternative, Garcia said.
The sticks are coated with finely milled tobacco and come in different flavors such as "cool mint." They carry the same potential health risks as other tobacco products and bear similar warnings.
At a Wichita convenience store on Wednesday, a pack of 10 Marlboro smokeless tobacco sticks cost $2.88 before tax.
The product was designed as a way for smokers to get their nicotine fix in the growing number of places where smoking is prohibited, including airplanes, restaurants and movie theaters.
But opponents say the tobacco sticks, which taste sweet and look like chocolate-covered toothpicks, could appeal to children.
"We're concerned about minors using these products because they really do look and taste like candy," said Ginger Park, media and policy coordinator for the Kansas Tobacco Use Prevention Program.
"They're so small, the packages could easily be in a teen's pocket and nobody would know. They could use them and appear to be sucking on a toothpick.... They're not child-safe in any way."
The Kansas Department of Health and Environment issued an advisory this week warning parents and others about the new product. Officials said the sticks are being sold at Casey's General Stores throughout the state.
Park said the sticks could cause nicotine poisoning in small children who mistake them for candy. Ingesting just 1 milligram of nicotine can cause nausea and vomiting in a small child, she said.
The nicotine content of Marlboro and Skoal tobacco sticks has not been tested, she said. But a study in the journal Pediatrics found that a similar product — Camel Sticks, marketed by tobacco-maker R.J. Reynolds — contained 3.1 milligrams of nicotine per stick, about three times the nicotine of an average cigarette.
"A whole pack of 10 really could be toxic" to a young child, Park said.
Garcia, the manufacturer's spokesman, said multiple warnings on the tobacco sticks' packaging are intended "to make sure adults understand not to buy these for children or leave them around where children could get ahold of them."
In addition to package warnings, the word "Marlboro" or "Skoal" is printed in black letters on each stick.
Like cigarettes and smokeless tobacco, the sticks are kept behind the counter at convenience stores. Customers must be 18 or older to buy them.
"Ultimately, we share the health department's goal of not getting these into kids' hands," Garcia said.
Isaac McKibban, a Wichita convenience store manager and smoker, said he has tried the tobacco sticks in movie theaters and other places where smoking is prohibited.
"I like the idea of not having to step outside," he said. "It's a good alternative, but it's not the same sensation. ... It definitely doesn't replace cigarettes."
In a statement issued earlier this year, the Campaign for Tobacco-Free Kids, a national tobacco-control group, criticized tobacco sticks as "yet another way to get people, including kids, hooked on nicotine and to keep those already hooked from quitting."
The group has called on the U.S. Food and Drug Administration to use its regulatory authority over tobacco products to closely scrutinize the smokeless tobacco sticks.
Garcia said the Virginia-based Altria Group provided all the product information that the FDA requires for a product launch.
Citing competitive reasons, he would not say why the company chose Kansas for its "limited distribution" test market. He also would not say how long the marketing might last or how long the company has been researching and developing the product.
Susan Arensman, spokeswoman for Wichita schools, said the district's safe and drug-free schools department is aware of the new smokeless tobacco sticks and "will work with schools to educate them about the products."
A policy prohibiting the use of "all tobacco products ... and look-alike products such as electronic cigarettes" means the sticks will be banned from schools, Arensman said. The policy applies to everyone working on, in or visiting district properties as well as district-owned vehicles and personal vehicles on district property.
"As a district, we don't condone any product that glamorizes a physically harmful behavior," she said.

New permits for tobacco sellers?

Tobacco retailers are fuming after City Council passed a bill yesterday requiring them to obtain permits to sell tobacco and other products containing nicotine.

The bill, which Mayor Nutter is expected to sign, mandates that tobacco retailers get a $50 permit from the Health Department in addition to the city business-privilege license and the cigarette-retailer license that vendors must acquire from the state Revenue Department.

This latest measure will give the city a list of Philadelphia's tobacco retailers to ensure that they are following the law.
"We've had problems with these small stores, neighborhood stores, selling loose cigarettes and selling these cigarettes and tobacco to young people," said Councilwoman Marian Tasco, who introduced the bill.

Tobacco retailers must renew the permit 60 days before the expiration date or face payments, including a renewal fee and a new application fee.

"It's already rough because we already pay lots of taxes on cigarettes . . . what's next?" asked John Ananikyan, owner of Smokin Stogies n' Stuff, on 18th Street near Chestnut. "I just paid $50 to renew my tobacco license."

Last year, Council passed legislation that increased the fine for retailers who sell to minors from $100 to $250 per incident.

The city Health Department conducts investigations of sales to minors and, for the last five years, 20 percent of those investigations turned up illegal sales, said Giridhar Mallya, director of policy and planning for the Health Department.

He said that Philly has among the highest rates of youth smokers, with 11 percent of young people having smoked once in the past 30 days.

Electronic Cigarette Company Offering Free $100 in Gas

South Beach Smoke, an electronic cigarette company, is extending its policy of offering $100 gas certificates for every new purchase of their electronic cigarette starter kits. There were questions as to whether or not they would continue this policy as gas prices continue to soar around the country, but they announced today on their blog that, “South Beach Smoke will continue this offer throughout the summer to ease the burden of high gas prices with our customers. We already help our customers save on their smoking habit by switching to e-cigarettes from traditional cigarettes, so it’s great to know that we can save them even more”. The company had the same offer in place months ago but decided to extend it through the summer which typically sees higher gas prices.

Gas certificates come with the customer’s initial electronic cigarette starter kit shipment which contains a South Beach Smoke e-cigarette battery, cartridges and a wall charger. Other accessories available include USB charger, car adapter, universal carrying case and extra-long battery. Electronic cigarettes use atomizers to flash vaporize a liquid nicotine solution creating liquid vapor instead of smoke. They have reusable batteries and replaceable cartridges.

Along with a $100 gas certificate, customers have the option of signing up for a South Beach Smoke Membership which provides 30% off regular shipment of cartridges and allows you to purchase the starter kit at an extremely discounted rate. Most starter kits offered by electronic cigarette companies cost around $100 for the advanced model, South Beach Smoke offers their advanced model for as low as $49.99. Their low cost plus 30% off cartridge shipments means South Beach Smoke Members pay the equivalent of $2.33 a pack of traditional cigarettes.

South Beach Smoke has recently been noted for its selection as one of the main products to be given to celebrities in the MTV Movie Awards Gifting Room. Award nominees, A-List celebrities and other high profile figures are expected to be given electronic cigarette starter kits from South Beach Smoke when the MTV Movie Awards air June 5th.

Marijuana Superstore Opening as Franchise in Arizona

weGrow is a hydroponic superstore – the first of its kind to franchise in the U.S. Their focus is on hydroponic plant growing – mostly of the medical marijuana variety. While the store does not sell marijuana directly, it does provide everything a consumer may need for growing it on their own. They provide live-grow demonstrations, educational programs, expert technicians to teach safe and responsible growing tactics as well as an on-site doctor for evaluations and a laboratory to test home-grown cannabis before consumption.

The opening of this new store (the third in the U.S.) coincides with the first day the Arizona Department of Health Services is accepting dispensary permits for medical marijuana. Is it a coincidence? Of course not. Lawsuits may prevent dispensaries from opening right away in Arizona so patients may need to rely on their own gardening skills to get the medical marijuana that they require.

“Suspending the state’s medical marijuana program will transition Arizona from a state-licensed cannabis distribution model to a patient-cultivator distribution model like California,” said Dhar Mann, founder of weGrow. “Now in order to get their cannabis, patients will have to grow it themselves, and most of them will have no idea how to do that. weGrow was created to assist exactly this type of customer.”

Edgerton man growing tobacco at city gardens

Head past Edgerton’s community gardens in the coming weeks, and you’ll see more than carrots, tomatoes and cucumbers.

Now, the gardens have tobacco.

In a new twist on community gardening, Edgerton resident Mark Wellnitz has decided to grow a small crop of the leafy green stuff that made his city famous. He’s doing it in a 30-by-60-foot plot along Lyons Street, right next to the city-owned community gardens.

Wellnitz doesn’t plan to sell the tobacco. He’s growing it for the sake of community pride and education.

Wellnitz, a construction worker and an Edgerton alderman, says his tobacco patch will be part of a living history showcase organized by the Edgerton Chamber of Commerce. The showcase is Saturday, July 16, during the 2011 Edgerton Tobacco Heritage Days.

Wellnitz said his idea for the tobacco crop came from a question he hears visitors ask every year at Tobacco Heritage Days: What does a tobacco field look like?

“You try to send these visitors five, 10 miles out in the country so they can see some of the tobacco farms, and they just say forget about it,” Wellnitz said.

Wellnitz’s plan will bring a miniature, working tobacco field to the city—just a few blocks away from the tobacco festival.

The Edgerton History Museum plans to use a horse-drawn wagon to truck visitors from Tobacco Heritage Days downtown to his tobacco plot, where they can take in a living history exhibit showing how tobacco was grown and harvested by local settlers.

The history museum plans other living history exhibits at the festival, including wool spinning, quilting, buck skinning and iron works.

Wellnitz said he also plans to hunt for tobacco worms—big green moth larvae that feed on tobacco and other native plants—and put them in insect carriers to distribute to youths at Tobacco Heritage Days.

“The thing will be finding enough of them. People spray to kill them now, so they’re not that easy to come across,” he said.

Wellnitz said he’s growing his tobacco using Old World methods: no chemical fertilizers, no pesticides, just his own sweat, some vintage tobacco tools and knowledge he’s borrowing from his father, tobacco farmer George Wellnitz.

Age-old methods call for growing tobacco plants from seed in growing frames, and Wellnitz is doing that. He admits he’s cheating a little; he’s also transplanting more mature plants grown in a hothouse. He’s doing that because it’s been a cold spring and he wants to make sure his crop is nice and hearty for the festival.

Meanwhile, there’s another local tobacco grow linked to Tobacco Heritage Days. This summer, local greenhouse Clark Companies is donating potted tobacco plants to Edgerton businesses to ramp up interest in the festival.

All July, the plants will be on display outside businesses in downtown Edgerton, Chamber of Commerce Administrator Kathy Citta said. The city this summer plans to add tobacco plants to the landscaping outside City Hall, she added.

In the past, controversy has surrounded Tobacco Heritage Days, as in 2007 when organizers dropped the word “tobacco” from the festival’s name amid concerns that controversy over tobacco alienated potential visitors.

Organizers have since changed the name back, partly because some locals were insulted by the change and boycotted the festival, causing a nosedive in attendance.

So far, Citta has heard no complaints about Wellnitz’s tobacco crop or the plan to display tobacco plants all over downtown.

“Maybe down the line when the plants start popping up around town, that’d be when we’d hear if there are problems with it,” Citta said.

Wellnitz said he knows people may try to inject controversy into his plan to grow tobacco at the city-owned gardens, but he said there’s too much excitement to turn back.

“I can’t hide from it. People are fired up about it, and I want to see it happen,” he said.

Wellnitz said he believes his tobacco patch merely celebrates the city’s heritage—and its ongoing history.

“Tobacco is what built this city,” Wellnitz said. “The city’s still here, and so is tobacco.”

Edgerton Living History Event

What: 9 a.m. to 3 p.m. Saturday, July 16, living history event, part of 2011 Edgerton Tobacco Heritage Days. Includes educational events at the Edgerton train depot; a miniature, working tobacco field at the Lyons Street community gardens; folk art demonstrations at Heritage Pond Park, plus folk music, wagon rides and tobacco warehouse tours. Hosted by the Edgerton Area Chamber of Commerce and the Edgerton History Museum.

Where: Downtown Edgerton, various locations.

WHO celebrates 24th World No Tobacco Day

Today marks the World Health Organisation’s 24th annual World No Tobacco Day; a day to further publicise the negative effects of a habit that prematurely kills some 6 million people a year.
Tobacco use is one of the biggest contributors to the epidemic of noncommunicable diseases - such as heart attack, stroke, cancer and emphysema - which accounts for 63% of all deaths, nearly 80% of which occur in low- and middle-income countries. Up to half of all tobacco users will eventually die of a tobacco-related disease- with upwards of 100,000 fatalities in the UK alone.

Problematic though smoking doubtless is, tobacco is nonetheless big business, with UK consumers spending £13.4 billion on tobacco a year. This generates a staggering £10.5 billion in tax revenues- £8.8bn from excise duty in addition to £1.7 billion in VAT.

A further £3.8 billion would be added to this figure if counterfeit cigarettes or cigarettes imported from cheaper countries where the tax is lower were eliminated.

The average price for a 20 pack in the UK is, according to the Tobacco Manufacturers’ Association, £6.63- of which more than 90% it tax.

Tobacco related jobs, notably those relating to wholesale, retail and distribution of tobacco products employ an estimated 85,000 individuals across the UK.

World No Tobacco Day is celebrated every year on 31 May as a mandate of the World Health Assembly, the supreme decision-making body of WHO, which is comprised of the organization's Member States. World No Tobacco Day informs the public about the dangers of tobacco use, the business practices of tobacco companies, what WHO is doing to fight the tobacco epidemic and what people can do to claim their right to health and healthy living and to protect future generations.