Tobacco Documents Online

ONEMM+OIIEDTN~C0I+F.YIL4~~. TAOMAS'AlllREN• OMIO: W/A/pMAN. JAMES 1i aalbo: MlWJE1lSEY. w.,L '4Llr TAUaM. lOU1S WNA . -uTTUn' 14ARSAf. SIpGASIQI', MIMME$QTA' .TlB: CAUNDQNtA' IdWCN[pl VMIg7NW . . . -oo.cti,rtO«cxaU ....,Mo: aMGE1L YKIMGAN. . .a osncwl, E'Aw"PICC c w.Afll sTAfi. DNECTON 3bonge of 3RPpnegrntatibeg' Sti'LBCOMML EE'ON TRANSPORTATION, lrO1,'lRISIN(, AND HAZARaOWS MATERIALS COMMITTEE ON ENERGY'AND, COMMERCE WASHINGTON, DC 2'0515 July 6, 19'88 Honorable Daniel Oliver Chairman Federal Trade Commission Washington, D.C. 20580 Dear Chairman Oliver: 4P. V_1 /IOOM Iq2. 7s'~ I/dVfl' A7HICI[~ EpJNLIMG ~A/o1pF/1QI PIla.i Paa uwaw .o. wn.T.IUIpI. W.fA. TIqWWf'.1. TAu[Q IOwA MCKM[ti RA4RITL RpRfOA O~It ~SCMMiRkCpCOMQq'. {OMMF. GWAMAIL.AIALWA'. NONM.LM /: {AM6 111YM TOlEY pc ornao, • We are responding to'the Commission's letter of June • 17, 198'8', setting forth, its views of H.R. 4543, the ~ Cigarette Testing and'lliability Act of 1988'. That letter, along with a separate commenting letter from, Commissioner Strenio, was submitted in lieu of the Commission''s testifying at the Subcommittee's June 8'hearing, on the bill. Testing Reauirements: Section 2 of H.R'. 454'3 Section 2 of the bill directs the Commission to contract with a laboratory not connected with the tobacco industry to test cigarettes on a random basis for quantities of tar, nicotine, carbon monoxide, ammonia, cyanide, formaldehyde, radioactive compounds, and other constituents of tobaccosmoke., The~Commiss3lon''sletter(page4)questions whether, such broader tests would be worthwhile. Regarding the cost of the testing required under H.R'.. 4543, the Commission's letter states (page 4) that the Oak Ridge National Laboratory estimates the cost of testing fifty cigarette brands for the specified substances at $500, 0010 to $750,000, plusstart-upcostso~f' $1001,0100, .to, $5001,000. This works out to only about $10,000 to $15,000O per.`year per brand'' of cigarette tested. We would appreciate your comments on how many tests would have to be conducted each, year for a, cigarette company to establish a cred'ible threat of a test to verify the validity of the companies" own test figures. in this regard, we understand that in Fiscal Year 1987, the Commission actually issuedi"second requests" in less than

W Honorable Daniel Oliver July' 6, 198'8' Page Two one per cent of the initial merger and acquisition filings under the Hart-Scott-Rodino.Act. It seems likely, forr example:, that speeding enforcement by police probably achieves a credible deterrent with comparably few actual stops of automobiles. The Commission"s June 17 letter characterizes the usefulness of' the broader cigarette testing program mandated by H.R. 4543 as "'speculative"' (page 4)i, relying solely on the testimony of'Dr. Michael Guerin~of the Oak Ridge National Laboratory at the Subcommittee's May 4 hearing. Dr. Guerin did say that the ranking of cigarettes by smoke constituents will tend to stay much the same:, regardless of which~ constituents are tested. But he also made an • additional point that the Commission's letter fails to mention--that "Qi],f you want to provide iniformation that there are indeed other constituents present [in tobacco smoke], then that kind of testing should be carried out.* * * It would help in terms of providing additional information to the consumer."' Other testimony supportingienactment of H.R. 454'3' is. not mentioned'in the Commission's June 17 letter. This includes the statements of Scott Ballin of the American Heart Association,, Alfred Munzer, M'.D., of the American Lung Association, Robert McAfee, M. D. , of' the American Medical Association,, and Steven Stellman of the American Cancer Society. Each of these witnesses strongly supportedd our bill and commented on the need for the testing requirements stated in Section 2. The Consumers IITnion and! the Washington Business Group on Health (which includes about 401 per cent of the nation's "Fortune 5001"'companies), alsoisupport the bill. In contrast, only witnesses appearing for the tobacco industry opposed Section 2 at our June 8, hearing,. N One notable omission fromthe Commission's assessment of'cost factors is the costs of'smoking itself. The Surgeon General estimates that over 30'0,0a0 Americans die each year from smoking. The Office of Technology Assessment places the estimated cost of smoking-related diseases at $65 bi!llion annually, in extra medical costs and lost productivity.

Honorable Daniel Oliver July ' 6, 1988 Page Three Another point omitted'from the Commission's comments is whether the data that would be generated by the testing in Section 2 of our bill would be useful in future advertising enforcement actions by the: Commission. We are aware, of course, that the Commission has not challenged the legality of any brand advertisement of cigarettes since 1983. In view of the incomplete analysis of the bill by the Commission, we request that the: submit additional comments on Section 2, including any evidence available to the Commission on the extent to: which the.current costs of smoking would: be reduced by providing, consumers with the additional testing data called for in Section 2. Preemption Tssuesr Section 3 of H.R. 4'543 We! note that the Commission in its June 17 letter took no: (page 6) on whether the Federal Cigarette Labeling and'Advertising Act should in fact preempt tort actions based on inadequate warning,for cigarette use afterr the federal statute was passed in 1965. The Commission also suggests (page 7) that it might be possible to guarantee state and local authority to regulate marketing, practices, such, as distribution, of.free cigarette samples, without undercutting the current uniformity oflthe federally required rotational health warnings.. The Commission does assert (page 6)that Section, 3' of the bill, as presentlystructured, "would make it virtually impossible to.adwertise cigarettes on a national basis. As a general matter, the Commission does not favor advertising bans, and achieving such a ban.indirectly, in our view, does not enhance its merit."' The FTC"'s 1986'report to Congress pursuant to the Federal Cigarette II,abeling, and, Advertising: Act (May 1988) states at Table 6F that in 1986, cigarette companies spent the following amounts on advertising: newspapers--$1201 milliom; magazines--$34'0 million;outdoor ads--$302 million;; tran~sitadsr -$35million!; and point-of-saleads--$13:6, million. We would appreciate your additional comments~on 00 ; whether Congress should permit state and local governments -11 to, regulate *eachl of these types of advertising,--constrained, ~', . of course, by the First Amendment, as applied by the courts r,b C11 . O

_V Honorable Daniel Oliver July 6, 1988' page Four to any particular state or local requirement or prohibition. In particular, would Saction, 3 have varying effects,, depending upon the type of advertising?' What would be the impact on each type of advertising,if Congress prohibited additional, non-federal cigarette warning labels but otherwise gave state and local governments the power to regulate cigarette advertising and promotion that they now possess regarding other products? We are attempting to address a major societal problem that now kills 900 people each day and costs $170 million daily inimedi'cal costs and lost productivity. Given the urgent need for a solution, we request that the Commission sul'Smi.t'itsaddiitional commentswithin3D1days~ of~ reced:ptof this letter. Sincerely, Bob Whittaker - / 6'Y'hftaf" l~: Luken Ranking,Republican Member Chairma