US: General Tobacco sues 52 attorneys general over restraint of trade and violation of the U.S. Constitution

North Carolina based manufacturer and distributor General Tobacco (GT) announced today it is suing 52 attorneys general of the United States and its territories and 19 tobacco companies. GT is asking for treble damages in excess of $1 billion from competitors for allegedly conspiring with the states to set up the Master Settlement Agreement (MSA) so that later market entrants, such as GT, have to pay the states substantially more than certain competitors pay. GT believes the effect of the MSA is to drastically limit future competitors from fair market competition. GT has paid approximately $470 million to the MSA and an additional $36 million in escrow.

The complaint, filed in U.S. District Court in Louisville, Kentucky, charges the 52 states and territories’ attorneys general with violating the Sherman Anti-Trust Act, its constitutional rights under the Equal Protection and Due Process Clauses of the Fourteenth Amendment, the Compact Clause and the Commerce Clause of the U.S. Constitution as well as violation of the Civil Rights Act, Title 42 USC Section1983.

The MSA was created in 1998 by the 46 states, the District of Columbia and five U.S. island territories, along with the mega tobacco companies which then controlled more than 97% of the market. The MSA was structured so that certain companies in the market in 1998 would receive future preferential payment terms while “new members” such as GT would have to pay substantially more than the original preferred members.

J. Ronald Denman, Executive Vice President of General Tobacco compared the MSA’s unequal treatment to a cartel. “The structure for the MSA created an impossible business environment for future competitors especially small players such as GT. All we are asking for is a level playing field for everyone,” Denman said. The complaint asks for treble damages under the Sherman Act as well as for an injunction, attorney fees and other relief.

General Tobacco, the sixth largest tobacco company in the nation with approximately $300 million in annual sales, is a full participating member of the Master Settlement Agreement.

Source: EuroInvestor, 28 October 2008
Link: http://tiny.cc/2Bohz

Smokers increasingly hooked on nicotine: study

Smokers who are seeking medical treatment to give up cigarettes are more highly addicted to nicotine than smokers who sought help two decades ago, U.S. researchers said on Tuesday. The researchers examined nicotine dependence levels of about 600 smokers who entered treatment programs in northern California to quit smoking during three periods starting in 1989 and ending in 2006.

Seventy-three percent of those seeking medical help to quit smoking in 2005 to 2006 were deemed highly nicotine dependent using scores from a questionnaire given to assess the severity of nicotine addiction, the researchers said. That compares to 55 percent of those seeking such help from 1989 to 1990 and 66 percent of those seeking treatment in 1994, Dr. David Sachs of the Palo Alto Center for Pulmonary Disease Prevention in California told a meeting of the American College of Chest Physicians. Sachs said the findings suggest nicotine dependence is worsening among U.S. smokers as a whole, although researchers don't know why.

A report published by the Massachusetts Department of Public Health in 2006 found that levels of nicotine in most cigarettes rose by nearly 10 percent from 1998 to 2004. Medical treatment to help people quit smoking may include nicotine replacement therapy such as a patch that delivers nicotine through the skin and into the bloodstream, nicotine gums, nasal sprays and inhalers, and antidepressant medication that raises the level of a brain chemical called dopamine.

The new study's findings are "important because what studies have consistently shown is that the more physically dependent a cigarette smoker is, the more intensive the treatment needs to be if the patient is going to be able to have a good treatment outcome and be able to stop smoking," Sachs said in a telephone interview. "If you look at all of the cigarette smokers that we have around the United States, roughly three-fourths of them are going to be highly physically nicotine dependent," Sachs said.

An estimated 21 percent of U.S. adults -- 45 million people -- are smokers, including 24 percent of men and 18 percent of women, according to the U.S. Centers for Disease Control and Prevention. The questionnaire, used to determine the degree of a person's of nicotine dependence, asked a smoker a number of questions such as whether they smoke their first cigarette within 30 minutes of waking up in the morning. Other questions include whether they find it difficult to refrain from smoking in places where it is forbidden, how many cigarettes they smoke daily and whether they smoke even when they are so ill that they are bed-ridden.

Source: Reuters UK, 28 October 2008
Link: http://tiny.cc/4bmwd

NZ: Fake 'Maori-killer' cigarettes released by anti-smoking group

An anti-smoking campaign using fake cigarette packs labelled 'Maori-killers' has been launched. The Maori Smokefree Coalition is distributing packs with mock health warnings, such as "Want equality? Smoking is an equal opportunity killer." Maori are consistently over-represented in smoking statistics, although in the past five years the smoking rate among Maori has fallen from 54 to 40 percent. It is hoped the latest controversial campaign will see the number fall even further.

Source: 3news.co.nz, 29 October 2008
Link: http://tiny.cc/xTra4

US: Study shows drop in youth smoking

A report released by the American Lung Association found that 19.2 percent of college students are smoking, which is fewer than ever before. The report warned that smoking rates were nearly this low in 1989 and then they skyrocketed to 30.6 percent in the following decade. To prevent numbers from soaring upward again, The American Lung Association recommended that universities join the Smokefree Air 2010 Challenge, a nationwide movement to eliminate exposure to secondhand smoke in public places and workplaces.

The American Lung Association report stated that the tobacco industry spends more than $1 million a day sponsoring events and giveaways targeting college students. Of 119 schools surveyed, students at 109 schools reported seeing tobacco promotions in an event on campus. According to the report, the industry recognizes that young adults are going through a transition period in their life - either moving from high school to college, or to work - and it is a prime time for developing and cementing new behaviors.

Of the college students who were surveyed, 86 percent perceived their peers as smoking at least one cigarette per month, while data indicated only 22 percent did. College students think tobacco is more common than it actually is because of the acceptance of smoking as a social norm. Half or more smokers are "social smokers" and smoke primarily around others, yet during a four-year college period, one in five of these social smokers becomes a daily smoker.

The Smokefree Air 2010 Challenge began in January 2006, when the American Lung Association called upon all states and local communities to pass comprehensive smoke free laws as soon as possible, but no later than 2010, to protect people across the U.S. from secondhand smoke. Since the challenge was issued, 23 states and the District of Columbia have passed laws.

According to the report, the challenge calls on universities to implement the following policies: Prohibit tobacco use at all indoor and outdoor facilities, private offices, residence halls and dormitories; stop the sale and advertising of tobacco products on campus and in college-controlled publications; refuse all research and sponsorship funding from the tobacco industry; providing smoking cessation programs to all students, faculty and staff; enforce strong policies to eliminate tobacco use across campus; and educate students and faculty about the harmful effects of using tobacco products.

Source: CentralFloridaFuture, 29 October 2008
Link: http://tiny.cc/aPZG8

Cigarette smugglers sentenced to 10 years

Two Leicestershire men have been sentenced today to a total of ten years in prison for their part in a criminal organisation which smuggled 27 million cigarettes and four tons of hand rolling tobacco into the UK. Mohmed Safi Patel and Anis Vohora were found guilty after a two week trial at Leicester Crown Court of stealing £4 million from the public purse following an in-depth investigation by HM Revenue & Customs (HMRC).

Nick Burriss, Assistant Chief Investigation Officer for HM Revenue & Customs (HMRC) said: "We will not hesitate to take action against those smuggling cigarettes into the country. These sentences will serve as a deterrent to others. Cigarettes smugglers cheat the country of vital revenue to fund vital public services like hospitals and schools. Smuggling also has a devastating impact on honest retailers forced to compete with the shadow economy." He added: "We will be looking to reclaim the profits from their criminal activity to the nation by pursuing a Confiscation Order under the Proceeds of Crime Act."

Investigators arrested Patel and Vohora along with two other men on 31 August 2006 at the Sangra Building, Abbey Park Street, Leicester, and seized 98,000 illicit cigarettes from them. A search of one of the units resulted in a further seizure of nearly 300,000 cigarettes and 16 kilos of hand rolling tobacco. A search of a Mercedes Sprinter van resulted in the seizure of another 600,000 cigarettes.

The operation led investigators to a residential house owned by Patel where they uncovered extensive hand written ledgers detailing the organisations purchase and sale of over 27 million smuggled cigarettes and four tons of hand rolling tobacco between November 2005 and August 2006. The revenue loss to the public purse is estimated at around £4 million.

On sentencing Patel, His Honour Judge John Milmo QC, said: "You were the brains of the operation and are far from the innocent dupe you say you are. You played a principal role in this complex operation which involved many professional transactions on a commercial scale." Arrests warrants have been issued for the two other men, aged 36 and 43, who failed to answer bail and have since absconded. The 43 year old man was stopped by Customs officers and following a search of his vehicle nearly a million cigarettes were seized.

Source: HM Revenue & Customs (East Midlands), 28 October 2008
Link: http://tiny.cc/h3WrG