Tobacco Documents Online

FDA regulations could have dramatic economic effec:ts The proposed FDA regulations would have immediate and devastating effects on the advertising, publishing, public entertainment, vending machine, and retail industries. Yet FDA bureaucratic oversight would do little, if anything, to af.Fect youth smoking rates. A wide variety of commercial entities- from small, independently operated mom & pop stores to advertising agencies - depend on revenues received from the tobacco industry and will unnecessarily be hurt by these punitive and reckless regulations. The advertising provisions of the proposed FDA regulations zanount to a de facto ban on advertising. Advertising, graphic design and print ad shops that depend on tobacco clients and the numerous publishers that sell advertising spaci: in order to keep their publications in circulation will be profoundly affected by the ban. Outdoor advertising provisions banning tobacco ads on billboards within 1,000 feet of schools or playgrounds and text-only billboards beyond that distance would force many boards to go unrented in cities and would needlessly put people out of work. The outdoor advertising rules would also affect retailers, who would be prevented from using exterior signage to advertise brands. Retailers within tLe "forbidden zone" would be placed at a competitive disadvantage with those outside the 1,000 foot barrier. In addition, retail outlets would suffer from a ban on open-shelf displays. Manufacturers of most products compete for "shelf space" in stores. Retaile:rs receive revenues from tobacco and other product manufactur6rs in exchange for prei erential product placement. Placing cigarette packs behind the counter eradicates those revenues and limits both the quantity and variety of product that the retailer can offer, lead ing to a reduction in sales. In some cases retailers would be forced to make expensive physical renovations in order to comply with FDA's overzealous regulations. Why should cigarette sales be singled out from other age-resbicted products like beer and wine that can be displayed openly - especially when the decision to sell or not to sell is still dependent on the decision of the store owner, operator, or employ.e'!? Likewise, the proposed rules dealing with corporate sponsorship of sporting and cultural events do nothing to affect youth smoking rates, but will cause significant economic injury. There is simply no compelling evidence that the spon:,oring of events under , tobacco brand names causes people to smoke. However, it is clear that many sports and

cultural organizations are dependent on the underwriting of events that tobacco companies have provided and will suffer under these regulations. Smokers and nonsmokers alike may be deprived of this free or low-cost entertainment. No other adult- oriented products face the censorship ax being wielded by Dr. Kessler's FDA. While at first glance banning cigarette vending machines might seem like an effective way to reduce youth smoking, the vast majority of machines are located in areas where kids generally don't have access, such as industrial plants and bars. Instead of simpiy restricting the machines to make sure that they are not youth accessible, the FDA cynically bans them all. According to the Amusement and Music Operators Association, the ban on vending machines could eliminate 10,000 jobs in ihis industry overnight. The economic contribution of the U.S. tobacco industry reaches far beyond the tobacco- growing states. Over 2.2 million people nationwide depend on jobs directly or indirectly provided by the tobacco industry. In addition, federal, state, and municipal excise taxes on tobacco products totaled more than $12.2 billion in 1994, and well over $14 billion when sales taxes on those products are included.

FDA Regulations Would Trample the First Amendment

The FDA's proposal would constitute a de facto ban on tobacco advertising -- violating the First Amendment FDA's proposal to mandate a"tombstone" format and black and. white text-only a advertisements for tobacco products would create a virtual ban on such ads. The United States Supreme Court has consistently affirmed significant prote;ctions for commercial speech, specifically ruling that the use of pictures, other illustralions and color in advertising is futly protected by the First Amendment. The broad restrictions proposed would violate First Amendment protections against restricting s:peech "more extensively than necessary " In what some might consider an unusual situation, both the American Civil Liberties Union and the Washington Legal Foundation are on record in agreement on this issue. Calling legislative proposals to restrict tobacco advertising unconstitutional, Barry Lynn of the American Civil Liberties Union stated in a Washington Legal Foundation Legal Backgrounder: "The 'words only' approach is really nothing short of a ban in sheep's clothing, providing potential customers with virtually nothing to alert them to the existence of lawful tobacco products." Advertising interests consider the FDA proposal a very serious threat to the First Amendment and the Constitutional protections afforded to freE: speech. The members of the Freedom to Advertise Coalition (FAC) filed suit in the Middle District of North Carolina against the FDA, strongly denouncing the Agency's proposed restrictions on tobacco ads as "a frontal assault on the Constitution." "The sweeping regulations proposed by FDA demonstrate that agency's disregard for the First Amendment," asserts John Fithian, legal counsel to FAC. Says Dan Jaffe, executive vice president of the Association of National Advertisers: "They want the ads to become invisible. The government has now become the copywriter and the ad dire,,-tor for tobacco advertising. They can speak through your ads, but you can't. It's a very substantial step in a free society." Further, Congress gave the Federal Trade Commission (FTCI ) jurisdiction over all advertising, including tobacco product advertising. While th.- FDA and the FTC -- in a successful partnership - effectively share responsibility to re gulate other products, FTC

retains the responsibility over all advertising concerns. The FTC has demonstrated that it has the capability and expertise to regulate advertising in a responsible manner. In addition, the FDA proposal to assess the tobacco companies S150 million per year to fund an anti-smoking advertising campaign, 80 percent of whic:ii would consist of television spots, also violates the First Amendment. Under a long line of Supreme Court and other case law, this item would violate the First Amendment by compelling tobacco companies to order "corrective advertising" and represents a forbidden taking of private property for a public purpose without just compensation. The $150 million per year assessment would be used for gover.nment-approved ads - like those state-sponsored ads in place in California and Massachusetts. In California, according to "Tobacco Use in California: An Evaluation of the Tobacco Control Program, 1989-1993," the state spent $72.9 million on anti-smDking ads and an additional $147 million on school-based programs. After spending $220 million over four years, "Smoking prevalence among California adolescents has not declined since the start of the Tobacco Control Program" (p. 53 of the above report). As the FDA has acknowledged, the FTC did not require the industry to fund an anti- smoking television campaign in the 1960s. Rather, television stations that ran cigarette commercials were required under the Fairness Doctrine to provide time for anti-smoking messages. (According to the FDA, $75 million was the appro ximate annual value, in "commercial air time," of the anti-smoking messages, but most of the messages ran at reduced non-commercial rates.) The government did not require cigarette companies to pay for those messages.

Tobacco is Hithly RmulatE:d

Tobacco products are already highly regulated Many of those pushing the FDA's regulation of cigarettes and smokeless tobacco products cry out that tobacco is "unregulated." That claim is patently false. Tobacco products are subject to dozens of federal laws and regulations, as well as laws in al150 states. The federal regulation of tobacco starts at the seedbed and follows the product through its manufacture, packaging, taxation, advertising, sales, and use. From seedbed to factory Federal regulation begins before the tobacco is planted, with Department of Agriculture production quotas and price levels for tobacco leaf. USDA also grades tobacco for auction, inspects imported leaf, and regulates the use of pesticides. By law, tobacco growers pay an assessment to cover USDA's requirements in the production control and "no net cost" price support program. Manufacture and packaging By law, the ingredients used in cigarettes and smokeless tobacco products are monitored by the Department of Health & Human Services. Manufacturers must submit annually a list of all ingredients to HHS. The Secretary of HHS is required to submit to Congress information on any ingredient that the Secretary deems "pose;; a health risk." In 1993, Congress imposed a requirement that U. S. cigarette manufacturers must use at least 75 percent domestic tobacco leaf in their products. International trade agreements prompted Congress to alter this requirement, but it remains in effect until a new tariff rate quota is ordered by the President. With the oversight of the Federal Trade Commission, manufacturers are required to support a testing laboratory for the measurement of "tar," nicotine and carbon monoxide yields for each cigarette. The labeling of cigarette packages is set by law, with govermnent-specified warnings that Congress has updated. The Bureau of Alcohol, Tobacco & Firearms regulates certain packaging practices.

Taxation By law, the first tax on each pack of cigarettes or container of srr,okeless tobacco is paid to the Department of the Treasury when the product is removed from the factory. Every state in the U.S. also taxes cigarettes, and 44 states tax smokeless products. Most states add the sales tax on top of the excise. Taken together, these federal, state and local taxes on all tobacco products amount to more than $14 billion a,year--financing a broad range of services enjoyed by all Americans, not just those who buy the product. Advertising & sales Cigarette advertising on television, radio and other electronic mE;dia has been banned by law for 25 years. Recently, the Department of Justice entered into a consent agreement that will restrict cigarette advertising in sports stadiums. By law, all product advertising must carry certain government warnings, and the FTC ensures compliance with these requirements. The FTC requires manufacturers to submit detailed information on product advertising and promotion to the FTC for its annual report to Congress. By a 1970 agreement with the FTC, cigarette manufacturers have included "tar" and nicotine information in their advertising and submit that information to the FTC for an annual report to Congress. In 1992, Congress passed a law, known as the Synar Amendment, that directs the 50 states to take action to reduce sales of tobacco products to minors. Since that law was enacted, more than half the states have adopted their own new laws and restrictions on the sale of tobacco products even though - three years later - HHS has failed to promulgate a rule setting standards for enforcement. Restrictions on use As if the alphabet soup of federal agencies involved in getting tobacco products to the consumer weren't thick enough, these agencies limit the publii:'s use of cigarettes and other products: . DOT - The Department of Transportation is required by la.w to ban smoking on most domestic airline flights, and the Secretary of DOT has sigrked agreements banning smoking from certain international routes.

. ICC - The Interstate Commerce Commission prohibits smoking on most bus trips that cross state lines. . AMTRAK - Smoking is banned on almost all passenger trains. • GSA - The General Services Administration requires smoking to be restricted in nearly all buildings owned or occupied by federal agencies. Many agencies have banned smoking entirely. • USPS - The Postal Service has banned smoking in all its facilities. . DoD - The Department of Defense prohibits smoking in all As facilities, except residential accommodations and private clubs. . EPA - While it has no Congressional authority to regulate i:adoor air, the Environmental Protection Agency created a"voluntary" prc gram to encourage office building owners to ban smoking in their property. . OSHA - The Occupational Safety & Health Administration is considering a regulation that would ban or severely restrict smoking in all. indoor workplaces. Continuing oversight Congress has set in place for itself a process for considering potential need for new requirements to tobacco products. In addition to the FTC reparts to Congress on advertising expenditures and on smoke constituents, and the HHS reporting requirement for ingredients, HHS and the Surgeon .General are required to submit an annual report on tobacco and health issues, together with any recommendations for legislative or administrative action. Congress has declined repeatedly, however, to take any action toward granting the Food & Drug Administration any regulatory powers over tobacco products.

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