Tobacco farmers expect Philip Morris to announce station closure

For decades, Greene County boasted the biggest burley hauls in the state. But by 2010, the county had slipped to sixth as fewer and fewer farms cultivated the cash crop.

The Philip Morris receiving station in Midway (also called Tennessee Valley Tobacco Services) still takes in 6,000,000 pounds of burley tobacco a year -- most of it from Upper East Tennessee and Southwest Virginia, TriCities reports.

"It will be roughly $10.5 million in sales lost if this receiving station closes," Jonathan Cavin said.

Cavin, of Cavin Farms, said 138 farmers use the station. They're worried Philip Morris -- and parent company Altria Group -- will close it and direct shipments 175 miles north to Danville, Kentucky.

"Tobacco is something that's been passed down from generation to generation through our family," he said. "My great grandfather bought the main farm that my father and grandfather live on with tobacco money from the Great Depression."

Altria called farmers last Friday and invited them to a company-hosted meeting at the General Morgan Inn in Greenville this Friday at noon.  Hotel staff said that meeting is closed to the press.

Danville Economic Development Partnership CEO Jody Lassiter said the Philip Morris receiving station there (also called Danville Tobacco Services) opened last year. He described it as one of the most efficient facilities of its kind.

"It's a 50,000 square foot warehouse, previously an industrial facility, and they've done a lot of interior work this year," Lassiter said. "Drivers drive through, unload, and drive out."

Lassiter said the Danville station could easily handle an additional 6,000,000 pounds of tobacco a year.
 

Ohio Tobacco Funding Case Reaches State Supreme Court

Information from tobacco news blog:
The Ohio Supreme Court is hearing arguments this week over the fate of the state's Tobacco Use Prevention and Control Foundation, which was stripped of its funding by state lawmakers, the Associated Press reported July 6.

Lawyers for the foundation told the court that lawmakers had no right to seize the program's $230-million endowment, which came from Ohio's share of the 1998 nationwide tobacco settlement and was placed in a protected fund. "The fact in evidence here is that the 123rd General Assembly plainly intended to create an irrevocable trust putting this money beyond the reach of subsequent general assemblies," said attorney John Zeiger.

But Alexandra Schimmer, Ohio's chief deputy attorney general, argued, "This money is and has always remained state money. It has never been given to any entity that has any legal independence from the state."

The state attempted to seize the money and shut down the foundation in 2008, but foundation officials responded by giving most of its funding to the American Legacy Foundation, a nationwide tobacco prevention program that is also a party to the lawsuit.

Stephen Strasburg = Smoking Fastball + Smokeless Tobacco

By now, everyone knows that Washington Nationals ace pitcher, rookie Stephen Strasburg is the real deal.

His debut lived up to all the hype, with the 21-year old throwing furious heat into the seventh inning. He had 14 strikeouts and no walks, getting his first major league win against the Pittsburgh Pirates in a 5-2 win Tuesday evening.

But what I had somehow missed in all the coverage leading up to his debut is this: the young man uses dip, that is, smokeless tobacco.

Reading some of the Washington Post coverage Wednesday morning, I came across a description of the Nats clubhouse scene which starts off with a mention of Strasburg's wife:

While Rachel was making an early run on the Nationals' Team Store — coming away with a bagful of limited-edition Strasburg 37 jerseys, and paying full price — her husband was taking batting practice in an indoor cage, with a tin of dip tobacco in his back pocket and a pinch between his gum and lower lip.

As Phil Rizzuto and Harry Caray might have said: Holy Cow! Or as was said in an earlier baseball era, say it ain't so.

So Strasburg has a weakness after all.

Major League Baseball has for years wanted to get rid of smokeless tobacco, a known carcinogen which causes some of the most hideous cancers of the mouth and throat imaginable. It has been banned in the minors since 1993, though players there still sneak it.

For years, there's been a concerted effort to keep young people from starting the dip habit, especially because of the mistaken impression that it's safer than smoking tobacco.

The mlb.fanhouse.com site has an informative story that provides plenty of background on the use of the product in the majors and efforts to prohibit it. Apparently, the players' union has opposed a ban.

But there are players who support a ban, who understand that they are role models to youngsters, according to the Fanhouse piece:

An excerpt from the piece:

"I would be for [a ban]," A's infielder Eric Chavez said. "I don't do it. Sometimes when I'm watching the games you see a guy throw in a big dip and the camera focuses in on it, I know kids are watching. You want guys to be able to do what they want. Everyone is an adult, but you also have to be aware of the message that you send to kids. ... Since I don't dip, I think I'd be an advocate for trying to get it out of the game, or at least off the field."

As was made clear last night, Strasburg draws a lot of attention and will no doubt be a role model for many youngsters, especially because, by all accounts, he is a humble and level-headed young man.

So his use of snuff is the kind of practice many people will find worrisome, not only for the personal health of one of the most gifted young pitchers baseball has ever seen but for the message it could send to many youngsters who may try to imitate their newest hero.

On top of old smokey

Stroll with me, if you will, down memory lane all the way back to December of 1996 when I was nearly eighteen and feeling quite rebellious. You see, I'd spent years being a goody-two shoes, church-going teenager, and I was ready to break the shackles and live it up.
My parents had friends visiting from the UK, and one of them had bought a carton of cigarettes - Benson and Hedges Special Filter - and in the folly of my youth I decided that smoking would be a great way to make me appear cooler than I actually was. So I stole a packet from the carton and lit my very first smoke.
Twelve years later, I was still puffing away - in fact by that stage I was close to a pack-a-day smoker. I loved smoking, I was good at it, and it pretty much ruled my life. Smoking was my best buddy... oh the laughs we would have!
Then, a year ago today I smoked my last cigarette.
I woke up on the morning on January 18, 2009, and decided that the last cigarette in the packet would be my last cigarette full stop. And it was.
I'd finally had enough of stinking like ciggies, and feeling crap when I woke up. I didn't like the idea that smoking had such control over me, and of course I was frightened of the long-term effects on my health.
Looking back on the entry I wrote at the time of giving up it's obvious I wasn't entirely confident I'd be able to see this quitting thing through, so sitting here a year later, still smoke-free, makes me feel quite proud that I've managed to stay off the ciggies.
Don't worry, I'm not going to get on my high horse about smoking - there's not much worse than an ex-smoker suddenly getting all self-righteous and up in the grills of their friends who still smoke. Sure, I'm pleased I quit, but if you want to carry on smoking then go for it. I might even be a wee bit jealous of you.
Really, I just wanted to take a moment to stop and smell the roses (now that I can) and say "Woo! Look at me! I managed to quit smoking and it's been a whole year since my last cigarette."
Quitting is hard - and anyone who has never smoked really cannot understand what it's like to be addicted and try to break that habit. If you are thinking of quitting, I have just this one piece of advice for you. Wait until you're ready. If you quit because you feel like you should, rather than because you want to, you'll pick up another cigarette and then feel like a failure. You'll know when the time is right, and no one else can make that decision for you.
Have you ever smoked and managed to quit? If so, do you have any words of advice or encouragement for those who are considering giving up? What about those of you who don't smoke - what do you make of friends and family who do?

Tobacco tax hike could backfire

Should they turn their gaze northward, state legislators looking to increase tobacco taxes by as much as $1 per pack will discover a cautionary tale.
One recent report out of Canada suggests that 48 percent of cigarettes consumed in Ontario, for example, come from smuggling — a rate that has increased and decreased with excise tax rates.
Our own research indicates that, if the $1-per-pack tax increase is adopted in Washington, the state’s cigarette smuggling rate will leap to more than 50 percent of the total market, along with other very expensive unintended consequences.
As recently as 1980, cigarette tax rates in Canada were in the same range as in most U.S. states. In a book published in 2000, “Tobacco Control in Developing Countries,” several economists describe how this changed beginning in the early 1980s. By 1994, Canadian federal and provincial cigarette taxes had been increased to “more than five times the U.S. average.”
As a result, smuggling accounted for 30 percent of the market by 1993. To combat this, Canada’s federal government (and some provinces) slashed cigarette tax rates in 1994. As predicted, legal sales rose dramatically and “the overall smuggling problem all but disappeared.”
The economics lesson didn’t stick, however. By 1998, Canada’s politicians were once again increasing cigarette taxes, widening the gap between their rates and most American taxing jurisdictions. As a result, Canada began experiencing renewed and rampant cigarette smuggling.
In March 2009, the Center for Public Integrity described Canada as having “a runaway black market,” complete with brazen heists from tobacco farmers, mobster- and gang-related crime, and even violence against police.
Of course, these unintended consequences are not limited to Canada. Examples of theft, violence and organized crime involvement in the illicit cigarette trade are reported with great frequency here in the United States, too.
In December 2008 we published a study with colleague Patrick Fleenor, titled “titled “Cigarette Taxes and Smuggling: A Statistical Analysis and Historical Review,” designed to measure the smuggling rates of 47 contiguous states. We recently updated the model to include changes to the Federal Excise Tax.
Based on that model, we believe that hiking taxes $1 per pack will lead to a leap in the total smuggling rate in Washington from 39.3 percent to 51.5 percent. That is, 51.5 percent of the cigarettes smoked in the state of Washington will be contraband.
We also expect legal paid sales to drop by at least 20 percent over 12 months following the tax hike, but as a direct result of smuggling, not from people quitting smoking. Research shows that as much as 85 percent of the after tax-increase change in cigarette sales is a function of tax avoidance — as opposed to smoking avoidance. The smuggling will occur in two major forms: casual and commercial.
Casual smuggling typically involves individual bargain hunters shopping for themselves or perhaps a friend over the state border or perhaps on the Internet.
Commercial smuggling involves large-scale organizations that ship semi-tractor trailers and vans long distances and maintain complex distribution systems.
Our estimates indicate that nearly 30 percent of the smuggling will come from these commercial haulers. It’s worth noting that some of the trailers are actually hijacked from underneath legitimate truckers themselves.
Anyone familiar with the history of alcohol prohibition knows that much of the booze consumed in the states then was brought in illegally from Canada. Today’s policymakers are engaging in a form of “prohibition by price” — making cigarettes effectively illegal by raising their costs — so we’re reliving many of the unintended consequences of that era.
Consider some parallels: violence against police, corruption of law enforcement, the sale of adulterated products manufacturerd by illegal producers (“bathtub smokes,” anyone?), smuggling, theft, hijacking, expansion of organized crime syndicates and even the sale of “loosies” – cigarettes illegally sold one stick at a time. (During Prohibition, men would sell single shots of whiskey to factory workers leaving manufacturing plants in the Detroit area.)
If state lawmakers wish to hike cigarette taxes, they must do so with the knowledge that the new rate is likely to generate a fraction of the new revenues they suspect and much more in the way of crime.
Today’s cigarette smuggling issues — on both sides of the U.S.-Canadian border — are the product of an addiction: Politicians addicted to the tax revenue generated by the sale of a legal product that people want.
Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Todd Nesbit is a Penn State economist and Mackinac Center adjunct scholar.

Deputy’s observation leads to 2 arrests in burglary

Two Elkmont brothers have been arrested in connection with a burglary and cigarette theft at a Salem convenience store, an official said.
Joel Dwight Gooch Jr., 24, and Joshua Matthew Gooch, 21, both of 22574 Easter Ferry Road, were arrested Saturday on one count each of third-degree burglary, said Limestone County Sheriff’s Chief Investigator Stanley McNatt.
They are accused of breaking the glass in the front door of Discount Food Mart in the Salem community on Saturday morning and stealing assorted cartons of cigarettes of undetermined value, McNatt said.
“A video camera caught them and even their truck,” McNatt said.
The video images were sent to other law-enforcement agencies along with a description of the vehicle.
While on patrol that same morning, Deputy Tom Gilbert saw a truck fitting the description on Poplar Point Road.
“He was very observant in noticing the vehicle,” McNatt said.
Gilbert called Sheriff Mike Blakely, and together the two recovered some of the cigarettes at a home on Easter Ferry Road that belonged to the brothers’ relatives, McNatt said. The two recovered most of the cigarettes, as well as the suspects, on Poplar Point Road, he said.
Each remained in the Limestone County Jail in lieu of posting $2,500 bail.

Cloverdale fuming over tax-free tobacco shop

A new tobacco shop in Cloverdale is prompting complaints that its American Indian owners enjoy an unfair advantage by not charging sales tax.
When Native Tobacco 101 opened this month, it not only brought cheap cigarettes to Cloverdale, it also touched on a national controversy over Indian smoke shops and the taxes they sometimes avoid.
The shop manager confirmed he does not charge any state or other taxes, such as the 7.75 percent sales tax his competitors are required to levy.
“It seems to me an unfair business practice,” said Cloverdale Mayor Carol Russell, who worries about the effect the new business may have on several “mom and pop” stores that sell tobacco.
“What is it about tobacco that allows one group not to pay taxes and another group to pay?” she said. “It puts other retailers at a disadvantage.”
Chuck Gerken, manager of Native Tobacco 101, said the owners are working with a Native American company licensed to use the land and operate the tobacco business, but he declined to provide more detail.
Most of the tobacco he sells is made by Indians on Native American lands in the states of Washington and New York, he said.
A pack of Smoking Joes, for example, advertised at $2.75, “is $2.75 out the door,” he said, with no additional taxes.
“People are very happy,” Gerken said. “For those who elected to smoke or chew (tobacco) in today’s times, we make it affordable.”But his competitors are not pleased.
“We work hard and pay part of sales taxes they don’t have to. That’s not fair,” said Ravi Singh, owner of Quick Pick Liquors, on the other side of the freeway.
As his store, a pack of cigarettes goes for $3.95, plus 7.75 percent sales tax, bringing the total to $4.26.
A state tax official said tribes that sell cigarettes on Indian land to non-reservation members are required to collect a “use tax” equal to a sales tax.
But experts say the state can’t force tribes to collect it and the responsibility technically lies with the customer to pay the tax.
“It’s difficult to enforce because Indian reservations operate under different rules than other retailers,” said Anita Gore, a spokeswoman for the state Board of Equalization.
The rules differ from state to state, and the stakes can be high.
In New York, officials have pending lawsuits against tribes to force them to pay taxes the state says are lost to bootleg sales of cigarettes, tobacco bought on reservations or through the Internet. The lost revenue may have been as high as $576 million in 2004 alone, according to New York.
In Cloverdale, Native Tobacco 101 is on a frontage road next to Highway 101 at the south end of town. It sells mostly Native American cigarettes, not premium national brands.
The plain-looking building and its banner advertising “discounted cigarettes and tobacco products,” is clearly visible from Highway 101.
The business is on a remnant of the former Cloverdale Rancheria owned by the survivors of John Santana, a Pomo elder and postmaster who was allotted the land more than 40 years agoafter the rancheria was dissolved.
Some residents thought the tobacco store opening signaled the impending construction of a proposed Indian casino, but that is likely years away, assuming federal and state approvals are obtained.
The restored Cloverdale Rancheria Band of Pomo Indians, who are proposing the casino, have distanced themselves from the smoke shop. Tribal leaders said they have no connection with it and the tobacco business is not tied to the casino project planned on nearby property.
In a letter published in the Cloverdale Reveille newspaper, the tribal council said the smoke shop is not on land belonging to the tribe.
But the parcel is still held in federal trust as Indian land belonging to Santana’s heirs, which exempts it from local zoning regulations and clouds the issue of sales taxes collection.
Even though Native Tobacco 101 doesn’t offer major cigarette brands, it does have bulk and chew tobacco that other local stores sell, such as Copenhagen and Skoal.
A 1.2-ounce tin of Copenhagen, for example, sells for $3.75 — with no taxes — at Native Tobacco 101.
But at Quick Pick Liquors, it goes for $3.95, plus 7.75 percent tax, bringing the total to $4.26.
Holding up a small tin of Copenhagen, Singh said, “I used to sell a lot of these guys — 50 rolls a week. Now, not even 10.”
He said his sales have dropped off dramatically because he can’t compete with the Native American business.
Les Marston, a Ukiah attorney who litigated a pivotal U.S. Supreme Court case in the mid-1980s involving tobacco sales by a California tribe, said the court made it clear tribes have an obligation to collect and remit state tax on the sale of cigarettes to non-tribal members.
But he said when it comes to tribes around the country, federal law requires an examination of state law as to who has the obligation to pay the tax — the buyer or the seller.
“Every state is different,” he said.
Marston said he represents a half-dozen tribes in California that sell tobacco, typically as part of their casino operation.
“I do know all the tribes I represent are collecting and remitting state tax on cigarettes,” he said.
But if Indian tobacco shops don’t send in the tax, it’s not simple for the state to enforce collection.
Marston said the state can’t sue the tribe nor file a lien on real or personal property on the reservation, seize off-reservation bank accounts or come onto the reservation for judicial or administrative enforcement.
Basically, the responsibility in California falls on the consumer to pay the tax. It’s similar to making a purchase on the Internet, in which consumers are not charged sales tax but are supposed to remit the equivalent tax to the state.
But Cloverdale Mayor Russell, worries that when an Indian cigarette retailer doesn’t collect the tax, the health programs that rely on the revenue will suffer.
Other taxpayers will “eventually have to take care of people who are ill because they smoke cigarettes,” she said.

High school tougher on tobacco than sex

Two Clinton High School students who engaged in oral sex in school were suspended until Friday, while a student caught with tobacco for a third time was expelled for a year.
The differing punishments raised eyebrows and sparked discussion among Anderson County school board members during their latest meeting.
"There's certain behavior that there's no question, it's wrong," member Dail Cantrell said of the oral sex incident. "You have to send a message."
"I understand we do not have a policy on oral sex and we do have one on tobacco," board chairman Dr. John Burrell said Tuesday.
Still, he said, the punishment meted out to the 16-year-old girl and 16-year-old boy for the sexual episode "should have been a lot stronger than a two-week suspension," Burrell said.
A video surveillance camera spotted the two students entering a restroom, and they later admitted to having the sexual encounter there, officials said.
The case illustrates the challenges school officials face in imposing suitable punishments, Director Larry Foster said.
In the tobacco case, there's a state law against underage possession, he said.
Foster said the case in question was a third-offense tobacco violation and that the school system's code of student conduct recommends expulsion.
Guidelines about in-school sexual activities are only broadly mentioned as "immoral, disreputable or disruptive conduct" in the conduct code.
Disciplinary measures for those cases span the gamut from verbal reprimands to expulsion, according to the code.
And punishments have varied widely, said Lisa Fair, the school system's deputy director of student services.
In October, she said, a 13-year-old girl performed oral sex on a 16-year-old boy while they were on a school bus and other students were present.
Those students were expelled, and they are now in the system's alternative school for children with disciplinary issues called the Learn Center, Fair said.
Even if students are expelled, "you have to continue providing services," former director V.L. Stonecipher said Tuesday.
School board members each month receive a report that lists disciplinary cases - with students only identified by age and school - on various offenses and the punishments meted out.
Offenses for November included possession of knives and box cutters, fighting, drug possession and use, and repeatedly cutting classes.
Burrell, during the latest board meeting, expressed dismay at some of the penalties that were handed out.
"It does not seem like very much of a punishment to me for some of these things," he said.
"Somebody's got to put their foot down," Cantrell said.
He said there are more disciplinary problems at Clinton High than at Anderson County High, the system's other high school.
Foster said principals impose punishments on a case-by-case basis, but students and their parents can appeal those penalties to the school system's Disciplinary Hearing Authority. That group of eight administrators conducts appeal hearings and has the power to modify punishments, he said. Any further appeal proceeding goes to him, Foster said.
While board members questioned the severity of various punishments, no action was taken during their Dec. 10 session.
"I think we need to get more strict somewhere down the road," Burrell said Tuesday.

"Cigarettes kill," but don't tell smokers

Study shows that warnings related to self-esteem were more effective than those indicating "cigarettes kill" in reducing smoking, according to media reports quoting the Journal of Experimental Social Psychology Monday.
Psychologists from the U.S., Switzerland and Germany conducted a small study and drew the conclusion that warnings such as "smoking makes you unattractive" or "smoking brings you and the people around you severe damage" do a better job in talking people out of their habit.
This worked especially well when people smoked to boost their self-esteem, such as young people who learned to smoke to become popular or fit in with their peers, the psychologists figured out.
"To succeed with anti-smoking messages on cigarette packs one has to take into account that considering their death may make people smoke," the study said.
A total of 39 psychology students, smokers aged between 17 and 41, participated in the study.
"On the one hand, death-related warnings were not effective and even ironically caused more positive smoking attitudes among smokers who based their self-esteem on smoking," the study said.
"On the other hand, warning messages that were unrelated to death effectively reduced smoking attitudes" among those who smoke for self-esteem.

Virginia, the US state built on tobacco, goes smoke-free

The US state of Virginia is poised to ban smoking in most restaurants and bars as of midnight on Tuesday, turning the page on 400 years of history that is tightly tied to tobacco.
"December 1st is an historic day in that we are enacting a smoking ban across the Commonwealth, which is a tobacco state," Gary Hagy, director of the Virginia Department of Health's division of food and environmental services, told AFP.
Outgoing Governor Tim Kaine has called on state residents to dine out on Tuesday, "when the daily special will be smoke-free air," said Hagy.
"A lot of people are very excited. They've been wanting to go non-smoking but kind of needed a little reason to go non-smoking and this has provided that for them," said Hagy.
But Jimmy Cirrito, who runs a bar in Herndon, Virginia, near Washington, was less than happy with the new law.
"It's not really a ban because the Virginia government said if there's a separate room with ventilation and a door, people can smoke there. So there are bars all around me where people can still go and smoke. But I can't do anything to my bar -- it's in a 100-year-old building," Cirrito told AFP.
"And it's not as if I'm letting people smoke marijuana or do things that are illegal. I'm allowing them to smoke a cigarette that they bought in a machine in my bar or in the 7-Eleven across the street," Cirrito, a life-long non-smoker, said.
Virginia joins 27 other states and the US capital, Washington DC, in enacting legislation prohibiting smoking in restaurants.
But for Virginia, banning smoking carries great significance because the history of the state -- or commonwealth as it is called -- is inextricably linked to tobacco.
English settler John Rolfe -- who went on to marry Pocahontas, the native American princess -- planted tobacco in the settlement of Jamestown in 1612.
Two years later, the first shipment of Virginia tobacco was sold in London, and by 1639, tobacco had become the American colonies' chief export.

Third of minors buying cigarettes from shops and pubs

The Office of Tobacco Control has said there is a long way to go to ensure cigarettes are not getting into the hands of minors.
It's latest research shows around a third of minors are still buying cigarettes in shops and from vending machines in pubs.
A third of pubs and almost a third of shopkeepers are allowing cigarettes to be sold to minors, according to the latest survey from the Office of Tobacco Control.
It also shows the ban on point-of-sale advertising, introduced in July, is working well.
The survey also showed that in almost all cases where ID was asked for cigarettes were not sold.

Under-aged decoy buys cigarettes

During an undercover compliance check, three businesses sold cigarettes to under-aged shoppers on Friday, Oct. 30, according to Det. Lt. Scott Fischer of the village of Holly Police Department. This was Phase II of the police department’s 2009 Youth Sentinel Program.
Phase II was completed when undercover officers conducted compliance checks of 11 local businesses who sell tobacco products. A 17-year-old decoy was sent into the businesses and attempted to purchase a pack of cigarettes. Eight of the businesses examined the decoy’s identification and refused the sale.
Fischer said three businesses sold the decoy cigarettes and those clerks were issued a state law citation. The citations are a misdemeanor punishable by up to 93 days in jail and a fine of up to $500.
In June, Phase I was completed when a 19-year-old decoy was sent into liquor license holding establishments and attempted to purchase alcoholic beverages. Two of the businesses sold alcohol to the decoy. The employees responsible were issued citations and the businesses were petitioned to the Michigan Liquor Control ommission.
This year’s Youth Sentinel program began in April, when officers visited all liquor license holding establishments and businesses that sell tobacco products within the village of Holly, educating them in the importance of not selling those products to minors.
Fischer said those businesses were told during the visits that police officers would be conducting undercover compliance checks utilizing under-aged decoys in the immediate future.

Addie fancies puffing on cigars after concerts

Some people choose going to see a movie or shopping at the mall as stress-relief therapy. Composer-slash-conductor Addie M.S. opts for something a little different: smoking cigars.
When his days get too tiring, lighting up a cigar does the trick in perking him up a bit.
“I indulge myself in smoking cigars after finishing a concert,” says the 15-year stogie veteran.
“It’s like a carrot dangling in front of my head to remind me that after the hard work, I’ll get to do what I want.”
At first, clove cigarettes were his weapon of choice. But after countless burn holes in his shirts, Addie chose another option.
“I had a friend laugh at me when he saw holes in my conductor’s costume, and then he offered me a cigar,” says the 50-year-old.
“At first it tasted weird. But then I got carried away with the different sensation cigars bring.”

Beckman hopes reform fees go up in smoke

Have healthcare companies sunk as far as controversial tobacco companies in the public eye? One medical equipment maker thinks so.
Makers of medical tests, implants and other devices face anywhere from $2 billion-a-year in industry-wide taxes in the House of Representatives’ health reform bill passed on Saturday to $4 billion-a-year under a Senate version.
The Senate measure’s tax is not deductible and would be applied much like the tobacco settlement from cigarette makers years ago, said Beckman Coulter CEO Scott Garrett.
“That hurts, that stings to be treated like the tobacco industry,” he told the Reuters Health Summit in New York.
It could hurt customers — hospitals, patients and others — too. Companies have said they would have pass along any higher costs from the tax directly onto users.
Garrett, whose company makes clinical diagnostic tests as well as other research instruments, said he was “rooting for the House version,” which is tax deductible and phases in the charges starting in 2013.

Ice cream man in cigarette scam

A man from Cumbria has admitted selling counterfeit cigarettes to a child from his ice cream van.
Anthony Wharton, 61, of Marsden Street, Barrow was caught by trading standards officers who found him selling cigarettes to a 16-year-old.
He pleaded guilty at Furness and District Magistrates Court to three charges of selling counterfeit cigarettes. He also admitted one count of selling cigarettes to a minor.
Wharton admitted he would often sell cigarettes to children whom he thought looked old enough, but he failed to ask for proof of age.
After a raid at his home on 14 October 1,360 counterfeit cigarettes were found.
Wharton must pay court costs of £350 and surrender all counterfeit cigarettes. He was also ordered to complete 60 hours unpaid community work.

Seneca educates lawmakers on treaty rights, tobacco economy

NEW YORK – State lawmakers at a public hearing heard claims of “lost” tax revenues ranging from tens of millions to billions of dollars from untaxed cigarette sales on Indian reservations.
While none of the witnesses backed up their claims with substantive evidence, the Seneca Nation of Indians presented officials with a three-inch thick document on its treaty rights, legal history, and an economic study by a Harvard economist that pinpointed how – and how much – the nation’s tobacco-based economy benefits the state.
The hearing, which was chaired by Sen. Craig Johnson, D-N.Y., was an all day – and sometimes heated – event at Manhattan Community College Oct. 27. The aim was to investigate why the state has failed in its attempts to collect cigarette taxes from reservation cigarette sales to non-Natives.
J.C. Seneca, a Seneca Nation tribal councilor, testifying on behalf of the nation, addressed that question at the beginning of his testimony.
“The answer to that question, put simply, is that your government has no authority to do so, that the United States government has promised the Seneca Nation that your taxes would not apply to our territory, and, perhaps most importantly, you cannot force the Nation and the Seneca people to be the state’s tax collectors,” Seneca said.
The hearing was the latest battle in a cigarette tax war that has ebbed and flowed through two decades, characterized by lawsuits and a “forbearance policy” in which the state claims entitlement to collect taxes from cigarettes sold to non-Indians on Indian land, but declines to do so.
The hearing comes on the heels of a letter Gov. David Paterson wrote to federal prosecutors, asking for a “threat assessment” on the potential for violence if the state tries again to collect the taxes.
More than 100 citizens from Seneca and other Indian nations across the state attended, responding freely to the witnesses’ testimony with cheers, applause or rebukes.
Seneca and Robert Porter, the nation’s general counsel, said the plain language meaning of the nation’s 1842 Treaty of Buffalo – which says, in part, that the U.S. “will protect such lands of the Seneca Indians, within the State of New York, as may from time to time remain in their possession from all taxes, and assessments for roads, highways, or any other purpose.”
Johnson suggested the treaty language could mean the state is only prohibited from assessing real estate taxes. He asked why the nation has never taken the issue to court.
“It seems to me that would put an end once and for all to the question of whether or not New York state can collect sales tax on cigarette sales to non-Native Americans,” he said.
“We wouldn’t trust the court to rule in our favor,” Seneca said, adding that the nation determines the meaning of its treaties, not the courts.
Porter noted that the nation’s gaming compact does not concede jurisdiction to courts, but instead stipulates an arbitration process in the case of unresolved conflicts.
The notion that the nation would trust the state’s courts to resolve a dispute is just as unlikely as the state trusting the nation’s courts to resolve a dispute, Porter said.
“We’re dealing here with international law; we’re dealing with a treaty to which you are not even a party. You are simply obligated under your law to adhere to those treaties. We need to go to the United Nations to achieve the proper degree of involvement in our internal disputes. If that is the direction you’re going in, we’ll gladly invoke that as well as we have with the president of the United States.”
Sen. Martin Golden tried to persuade Seneca that it would only be “fair” to share the nation’s “taxes” with New York tax payers.
“If you agree that most of this (the sale of untaxed cigarettes) is going on across the borders you should have no problem in allowing state regulators to be part of the Seneca Nation and other nations to monitor (your sales). … We want fairness, you want fairness. Let’s get together so those dollars that are part of Indian nations are equally shared with the tax payers, especially when it comes to those non-tribal members that are purchasing 49 cartons of cigarettes,” Golden said.
Seneca replied that a taxation agreement has already been made – the Treaty of 1842.
Golden insisted that the state needs to “collect those taxes “before it falls into greater debt” – a theme reiterated by several senators.
Sen. George Maziarz said he wants to “dissociate” himself from Golden and comments by other lawmakers who said Indians take social services from the state, but give nothing back.
“I’m probably the only one who has grown up and lived and currently lives next to a Native American community. We all went to public schools, they went to the Indian school and they were not equal, I can tell you. The roads on the rez were always the last to be paved. Health care was almost nonexistent.”
Sen. Michael Nozzolio raised the issue of Paterson’s “threat assessment” letter and told Seneca he hoped the nation “would not condone violence.”
“Indian people struggle every day to fight for what we have and we’re going to continue to fight. When violence happened in the past, it was precipitated by the state. Seneca people weren’t armed. We didn’t have guns. We didn’t have clubs. We didn’t invade anybody’s territory,” Seneca said.
Sen. Eric Adams stood up for the nation’s right to defend itself.
There was no consensus on the estimated “lost taxes.”
William Comiskey, the tax and finance department’s deputy commissioner, said losses could be as much as $225 million annually, “assuming full compliance.”
But full compliance can’t be assumed because it’s impossible to calculate the number of untaxed cigarettes distributed through non-state licensed sources, he said.
Stephen Rosenthal described himself as “the largest distributor of tobacco and cigarettes in New York” until untaxed cigarette sales drove him out of business. He claimed with no evidence that the state’s loss is $1.6 billion.
Seneca pointed out that the nation is one of the largest employers in western New York, providing jobs with benefits for more than 6,300 mostly non-Native people.
Harvard economist Jonathan Taylor’s study detailed how every $1 of gross profits accrued to the nation’s tobacco businesses provides the state economy with $1.67. In 2007 alone, the nation’s combined tobacco and gas businesses generated an estimated $313 million and spun off nearly $200 million into the economy. The nation’s economic activities have contributed more than $1.1 billion to the statewide economy over the last decade, he said.
So even if the nation is not subject to taxation, the ripple effect of its economy benefits the state, Seneca said.
The committee will review all the testimonies and additional material that may be submitted and issue a report by the end of the year or early next year.

Tobacco Co. Wins New Trial on $5M Punitives

(CN) - A tobacco company stands to further reduce a $5 million punitive damage award to the family of a man who smoked from age 13 until he died of lung cancer at 57. A New York appellate division ordered a new trial on damages, saying the jury had been given faulty instructions.
Brown & Williamson Tobacco Co. conceded that Harry Frankson smoked a pack of its Lucky Strikes cigarettes each day for 40 years.
The jury ruled that Brown fraudulently concealed the health risks of smoking and awarded $20 million in punitive damages. The trial judge reduced that total to $5 million.
On appeal, the 2nd Appellate Division in Brooklyn said the jury wasn't properly instructed that it could not punish Brown for damages to any smokers other than Frankson, as the plaintiff's attorney mentioned "tens of thousands of deaths" in his summation.
"Absent a proper limiting instruction," Justice Eng wrote, "the jury could have mistakenly understood the plaintiff's argument that the defendants' conduct resulted in the deaths of tens of thousands of people to justify taking those people's deaths into account in calculating the amount of damages warranted to punish the defendants' reprehensible conduct."
Eng remanded the case for a new trial on the issue of punitive damages.

Earnings Preview: Lorillard Inc.

RICHMOND, Va. — Tobacco maker Lorillard Inc. reports its third-quarter results on Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The oldest continuously operating U.S. tobacco company and maker of Newport menthol cigarettes, based in Greensboro, N.C., said in July that it was selling more cigarettes even after it raised prices and a federal tax increase went into effect April 1.
Cigarette volumes at Lorillard, whose brands also include Kent, True, Maverick, Old Gold and Max, increased 2.1 percent for the second quarter, when the company estimated volumes fell 4.1 percent across the industry.
It is the fourth major tobacco company to report on its earnings this month. Altria Group Inc. — owner of the nation's biggest cigarette maker, Philip Morris USA, which makes Marlboros — said cost-cutting and higher cigar sales helped its third-quarter profit rise 1.7 percent, even though it sold fewer cigarettes. Altria said its overall cigarette volume fell 12 percent for the quarter, and it estimated a 10 percent drop industrywide.
Reynolds American Inc. — the second-biggest cigarette seller in the U.S. and maker of Camel and Pall Mall — recorded 72 percent higher profit than in last year's third quarter, when restructuring costs and the falling value of its trademarks dampened its earnings. It said its estimated 11 percent drop in volume was better than the industry's decline, which it pegged at 12.6 percent.
Lorillard joined Reynolds and several smaller tobacco companies in suing the U. S. Food and Drug Administration over statements it has made under the new authority it won in June to regulate the tobacco industry. A federal judge in Kentucky is considering the case.
BY THE NUMBERS: Analysts surveyed by Thomson Financial on average expect Lorillard to post a profit of $1.52 per share on revenue of $1.32 billion. In the third quarter a year earlier, the company earned $1.38 per share on revenue of $1.12 billion.
ANALYST TAKE: Analysts hope the third quarter sheds light on cigarette volumes for the year as the industry recovers from turbulence surrounding the federal tax increase.
Credit Suisse analyst Thilo Wrede told investors Oct. 13 that despite volume declines he expects Newport to keep gaining market share and he said Lorillard's Maverick brand would post double-digit volume gains.
In a separate note Sept. 21, Wrede said Lorillard is the best U.S. tobacco company.
"Lorillard continues to have the best margins, volume growth outlook and brand equity," Wrede wrote, adding that Maverick is drawing budget-conscious smokers.
WHAT'S AHEAD: The tobacco industry is anticipating more fallout from the FDA's new regulatory authority. Although a ban on flavored cigarettes went into effect last month, the FDA has not clarified how it will treat menthol cigarettes like Lorillard's popular Newport brand. And both Altria and Reynolds American hope to take some of Lorillard's share of the menthol market.
Wall Street will be looking at how further smoking bans, tax increases and regulation could affect cigarette volumes and profitability.
STOCK PERFORMANCE: During the quarter that ended Sept. 30, shares of Lorillard rose about 7.2 percent to $74.30. Over the previous 52 weeks, the stock traded between $52.50 and $79.02.

Earnings Preview: Lorillard Inc.

RICHMOND, Va. — Tobacco maker Lorillard Inc. reports its third-quarter results on Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The oldest continuously operating U.S. tobacco company and maker of Newport menthol cigarettes, based in Greensboro, N.C., said in July that it was selling more cigarettes even after it raised prices and a federal tax increase went into effect April 1.
Cigarette volumes at Lorillard, whose brands also include Kent, True, Maverick, Old Gold and Max, increased 2.1 percent for the second quarter, when the company estimated volumes fell 4.1 percent across the industry.
It is the fourth major tobacco company to report on its earnings this month. Altria Group Inc. — owner of the nation's biggest cigarette maker, Philip Morris USA, which makes Marlboros — said cost-cutting and higher cigar sales helped its third-quarter profit rise 1.7 percent, even though it sold fewer cigarettes. Altria said its overall cigarette volume fell 12 percent for the quarter, and it estimated a 10 percent drop industrywide.
Reynolds American Inc. — the second-biggest cigarette seller in the U.S. and maker of Camel and Pall Mall — recorded 72 percent higher profit than in last year's third quarter, when restructuring costs and the falling value of its trademarks dampened its earnings. It said its estimated 11 percent drop in volume was better than the industry's decline, which it pegged at 12.6 percent.
Lorillard joined Reynolds and several smaller tobacco companies in suing the U. S. Food and Drug Administration over statements it has made under the new authority it won in June to regulate the tobacco industry. A federal judge in Kentucky is considering the case.
BY THE NUMBERS: Analysts surveyed by Thomson Financial on average expect Lorillard to post a profit of $1.52 per share on revenue of $1.32 billion. In the third quarter a year earlier, the company earned $1.38 per share on revenue of $1.12 billion.
ANALYST TAKE: Analysts hope the third quarter sheds light on cigarette volumes for the year as the industry recovers from turbulence surrounding the federal tax increase.
Credit Suisse analyst Thilo Wrede told investors Oct. 13 that despite volume declines he expects Newport to keep gaining market share and he said Lorillard's Maverick brand would post double-digit volume gains.
In a separate note Sept. 21, Wrede said Lorillard is the best U.S. tobacco company.
"Lorillard continues to have the best margins, volume growth outlook and brand equity," Wrede wrote, adding that Maverick is drawing budget-conscious smokers.
WHAT'S AHEAD: The tobacco industry is anticipating more fallout from the FDA's new regulatory authority. Although a ban on flavored cigarettes went into effect last month, the FDA has not clarified how it will treat menthol cigarettes like Lorillard's popular Newport brand. And both Altria and Reynolds American hope to take some of Lorillard's share of the menthol market.
Wall Street will be looking at how further smoking bans, tax increases and regulation could affect cigarette volumes and profitability.
STOCK PERFORMANCE: During the quarter that ended Sept. 30, shares of Lorillard rose about 7.2 percent to $74.30. Over the previous 52 weeks, the stock traded between $52.50 and $79.02.

Firms fighting cig tax

A Mississippi cigarette distribution company and a Kentucky manufacturer want to nix a state law that taxes their cigarettes sold out of state.
In a complaint filed in Hinds County Chancery Court against the State Tax Commission, The Corr-Williams Co. and Commonwealth Brands Inc. said the 1 1/4-cent-per-cigarette fee on smokes sold out of state violates the U.S. Constitution by unfairly taxing interstate commerce.
The companies are not challenging taxes collected on cigarettes sold in state.
The tax in question - which equates to about 20 cents a pack - went into affect in July and applies to manufacturers not included in the state's 1997 tobacco settlement.
Last month, the state billed 20 manufacturers $537,499, said Kathy Waterbury, a spokeswoman for the State Tax Commission. Those first payments are due Thursday.
In the complaint, the companies ask the state be prevented from collecting the fee.
Because it is pending litigation, Waterbury would not answer questions about the lawsuit.
Roy Wilkey, an attorney for Commonwealth, did not return calls seeking comment.
In its complaint, the Bowling Green, Ky.-based company alleges it's being taxed twice on cigarettes distributed through the state.
Commonwealth was not sued by the state and is not a part of Mississippi's tobacco tax settlement. The company voluntarily joined a settlement agreement with 46 other states, a group that does not include Mississippi.
In the agreement with other states, Commonwealth pays taxes based - in part - on all of its sales, including those in Mississippi.
In May, Philip Morris' parent company, Altria Group, wanted to see smaller companies taxed, an effort to level the playing field between big tobacco and its lesser-known competitors.
In June, Gov. Haley Barbour said it would be fair to add a tax to smaller companies not included in the state's tobacco settlement.
Before becoming governor, Barbour was a Washington lobbyist for premium brand cigarettes.
Commonwealth said that 80 percent of its cigarettes distributed through Mississippi are destined for other states.
Steve Carmody, attorney for Corr-Williams, said so far the tax has had little affect on sales, but the potential to affect them is great.
The Corr-Williams Co., which is based in Pearl, has warehouses in Columbia and Natchez and distributes tobacco and grocery products in Mississippi and Louisiana.
Senate Finance Committee Chairman Dean Kirby, R-Pearl, said he will check with attorneys at the Capitol to see what other states have done.