FDA Issues Request for Comments on New Legislation

The FDA has published a request for public comments on how to implement the recently enacted Family Smoking Prevention and Tobacco Control Act which grants the FDA broad powers to regulate the tobacco industry.  As the accompanying published notice states, the FDA is "particularly interested in comments on the approaches and actions the agency should consider initially to increase the likelihood of reducing the incidence and prevalence of tobacco product use and protecting the public health.”

The categories for which comments are being requested include (1) federal, state, and local government collaboration; (2) new product submission and approval; (3) product ingredient disclosure; (4) prevention; (5) tobacco use by specific groups including minors, women, and racial and ethnic minority populations; (6) tobacco addiction; (7) smoking cessation; (8) data collection; (9) products with ‘‘reduced harm/risk" claims; (10) enforcement; (11) research and testing; (12) advertising and marketing of tobacco products; (13) label statements and warnings (including graphic warnings); (14) tobacco product standards (including flavors, ingredients, etc.); (15) sale and distribution of tobacco products; and (16) manufacturing restrictions and facilities controls.

While some of these categories do not specifically pertain to the retail segment of the tobacco industry, NATO will be closely involved with submitting comments on pertinent issues when they are requested by the FDA and will be sending in comments to this published notice.  The notice also states that while the FDA will not respond to any comments submitted, all comments will be considered for implementing the new law.  In addition, the FDA noted that it intends to solicit public input on other specific issues in the future.  Individuals, organizations and companies can submit comments on-line or by mail to the FDA and the comments are due by September 29, 2009.  NATO, through the association’s various committees, will also assist NATO retailers and their customers submit comments to the FDA.

FDA Regulatory Legislation Signed Into Law

On June 22^nd, President Obama signed into law the bill granting the Food and Drug Administration the power to regulate the manufacturing, distributing, advertising and selling of tobacco products.  Accompanying this NATO E-News bulletin is an outline which summarizes some of the key provisions of the new law, especially as those provisions that relate to tobacco retailers.   With the law being 90+ pages in length, the accompanying summary does not cover every new area of industry regulation by the FDA.  If you have specific questions, please contact NATO Executive Director Thomas Briant at 1-866-869-8888 or reply to the e-mail that accompanies this bulletin.

Summary of FDA Regulatory Law

NATO Video Supports Wisconsin Retailers In Tax Fight

In a major effort to oppose a $.75 per pack cigarette tax increase and a 21% hike in the OTP tax in Wisconsin , NATO has issued two television ads and two radio ads to be aired in the state.  The ads focus on Governor Doyle’s promise not to raise taxes and the impact that another round of cigarette and OTP tax increases will have on retailers, jobs and consumers.  To watch the 30 second NATO television commercial that has also been posted to YouTube, click on the video screen arrow below.

NATO and AWMA Issue Joint Letter to U.S. Senate on FDA Bill

NATO and the American Wholesale Marketers Association (AWMA) have sent a joint letter to all U.S. Senators urging them to oppose Senator Ted Kennedy’s FDA legislation but, if they were so inclined to support government regulation of the tobacco industry, to consider an alternative measure being proposed by Senator Richard Burr (Republican-NC) and Senator Kay Hagan (Democrat-NC).  The Burr-Hagen measure would create a new government agency to regulate the tobacco industry rather than grant the authority to the FDA.  The Burr-Hagen proposal would not include some of the most onerous restrictions that are a part of the Kennedy FDA bill.  The letter was faxed to U.S. Senators and a copy has also been hand-delivered to each senator’s office in Washington.  To see a copy of the letter, click here. 

U.S. Senate Considers Non-Tobacco Revenue for Health Care

The U.S. Senate Finance Committee has released a report listing different options to finance reform of the county’s health care system.  While the report discusses policy options including ensuring appropriate payment for medical services, modifying how employer provided health insurance coverage is treated for tax purposes, changing how health savings accounts (HSAs) and flexible spending accounts (FSAs) are administered, the report also includes recommended “lifestyle tax proposals”.

These lifestyle tax proposals include making the federal excise tax on beer, wine and liquor uniform and imposing an excise tax on sugar-sweetened beverages.  Currently, the federal excise tax rates for beer, wine and liquor are all different and the report recommends standardizing the tax rate for all three kinds of alcoholic beverages at an increased tax rate of $16 per proof gallon.  In addition, the report includes a recommendation to impose a federal tax on beverages sweetened with either sugar, high fructose corn syrup or other similar sweeteners.  The report does not contain any recommendation to further raise the federal cigarette and tobacco product excise tax rates.  According to Senate Finance Committee Chairman Max Baucus, the Senate Finance Committee will plan to vote on a health care reform bill sometime in June.

NATO Submits Recommendations to TTB on Tobacco Trafficking

At the request of the U.S. Alcohol, Tobacco Tax and Trade Bureau (TTB), NATO has submitted a letter with recommendations on how the federal government can stop illegal tobacco trafficking in the United States as a result of the SCHIP federal cigarette and tobacco tax increases.  In a letter submitted to the TTB on June 4^th, NATO made the following recommendations: 

1. Enact federal and state legislation that prohibits the delivery by the U.S. Postal Service of cigarettes and tobacco products purchased over the Internet, by telephone or through mail order.

2. Enact federal and state legislation that requires (1) package delivery companies (UPS, Federal Express, DHL, etc.) to verify that the person to whom tobacco products are being delivered is of legal age to receive such tobacco products, and (2) the payment of all applicable federal excise taxes, state excise taxes and state sales taxes on the tobacco products being shipped.

3. Increase the number of federal enforcement agents in applicable federal agencies to enforce all existing laws the purpose of which are to prevent the illegal trafficking of tobacco products and take steps to enforce state laws that require Native American tribes to remit state cigarette and tobacco excise taxes on tobacco products sold on reservation lands to non-Native Americans.

4. Rescind the federal cigarette and tobacco tax increases that went into effect on April 1, 2009.  Given the fact that the significant federal tax rate increases promote illegal trafficking in black market and non-taxed cigarette and tobacco products, the most effective means to stem tobacco trafficking is to rollback the recent federal tax rate increases.

NATO has also urged other industry trade associations to submit recommendations to the TTB to help stop the illegal trafficking of cigarettes and tobacco products. 

NATO Pinnacle Award Recipients

During the NATO Annual Awards Dinner held on Tuesday, May 5^th at the Omni Royal Orleans Hotel in New Orleans, NATO presented Commonwealth Brands, Mary Szarmach of Smoker Friendly, Lee Silverman of Klafter’s, Inc. and R.J. Reynolds State Regional Government Affairs Director Bob Pruett with NATO Pinnacle Awards.  The Pinnacle Award is presented to those NATO members that demonstrate extraordinary support of the association and its legislative efforts.

NATO Pinnacle Award Recipients:  Russ Mancuso representing Commonwealth Brands, Mary Szarmach of Smoker Friendly, Lee Silverman of Klafter’s, Inc., NATO President Andy Kerstein and Josh Pruett (accepting on behalf of his father, Bob Pruett of R.J. Reynolds Tobacco Company).

NATO Thanks Sponsors of Annual Awards Dinner

NATO extends a sincere thank you to the numerous manufacturer and distributor members that sponsored the NATO Annual Awards Dinner.  This special dinner celebrated NATO’s eighth anniversary and was a grand, semi-formal affair attended by more than 300 NATO member guests from tobacco retailers, distributors and manufacturers.  This special dinner was made possible by the following companies:

Platinum Sponsors

  Altria Client Services, Inc. 
Philip Morris, U.S.A.
R.J. Reynolds Tobacco Company

  Gold Sponsors

  Altadis , U.S.A.
Conwood Sales Co., LLC
Swedish Match and General Cigar

  Silver Sponsors

  John Middleton, Inc.
Republic Tobacco Company
Santa Fe Natural Tobacco Company
Swisher International

  Bronze Sponsors

  Commonwealth Brands
National Tobacco Company

  Pewter Sponsors

  BIC Corporation
CAO International
Cusano Cigars/Domrey Cigars
Davidoff of Geneva
Drew Estate
Inter-Continental Cigar Corp.
Liggett Vector Brands, Inc.
M & R Holdings
Premier Manufacturing, Inc.
Rouseco, Inc.

  Patron Sponsors

  Arango Cigar Company
Camacho Cigars
Carolina Tobacco Company
JT International U.S.A. , Inc.
King Maker Marketing
Star Scientific

Manufacturer Websites Oppose Tobacco Issues

Both Philip Morris USA and R.J. Reynolds Tobacco Company have developed websites to assist wholesalers, retailers and adult consumers respond to proposed tobacco tax increases and other tobacco legislative issues.  These websites provide up to date information on federal and state tobacco tax increases and other issues as well offer the means to electronically communicate with elected officials to oppose these legislative initiatives.

  NATO members are encouraged to visit both of these websites regularly to keep informed about tobacco-related legislation on the federal level and in their respective states.  To visit these websites, click on the links below:

SCHIP Cigarette and Tobacco Tax Rates  

New federal cigarette and tobacco tax rates went into effect on April 1, 2009 as a means to fund the expansion of the State Children’s Health Insurance Program (SCHIP).  The new federal cigarette and tobacco tax rates are shown below:

Corrected Floor Stocks Tax Return Instructions Issued

The Alcohol, Tobacco Tax and Trade Bureau (TTB) has issued a corrected set of instructions for retailers and wholesalers to calculate and file a Floor Stocks Tax Return regarding the recent federal cigarette and tobacco tax increases.  In the original set of instructions sent to NATO members on March 14^th, the instructions incorrectly reversed the definitions of small and large cigarettes.  While the floor stock tax return itself correctly describes small versus large cigarettes, the five page set of instructions issued by the TTB had the definitions reversed.

Accompanying this NATO E-News Bulletin is a copy of the Floor Stocks Tax Return and the corrected instructions.  For those NATO members who receive the NATO E-News Bulletin by fax or mail, the corrected floor stocks tax return instructions will be mailed to your store.  Please recall that the Floor Stocks Tax Return needs to be postmarked no later than July 31, 2009 and accompanied by the payment of any federal floor stocks tax on cigarette and tobacco products (except large cigars).

Cigarette and Tobacco Rate Tax Maps

The maps below show the current cigarette tax rates in all 50 states and the current tax rates on other tobacco products for each state.

• Excise Tax Rates Colored
• OTP Excise Map

NATO Manufacturers & Distributors Directory

The NATO website now includes a new page filled with manufacturer and distributor company logos, contact information, product summaries and hotlinks to each member’s website. Retail members are encouraged to visit this new page to learn about NATO manufacturer and distributor members and the products they offer. This is a unique service to assist NATO retail members find manufacturer and distributor websites. For those manufacturers and distributors that have not yet sent in their logo, contact information and website address, please forward that information to NATO at info@natocentral.org.