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February 23, 2005

A Newsletter of the National Association of Tobacco Outlets, Inc.

By: Thomas A. Briant, Executive Director

NATO Board Elections

Every November, all NATO members are asked to exercise their right to vote to elect individuals to serve on the NATO Board of Directors. Since each NATO member can cast one ballot, the main contact person for each retail, wholesale, accessory and manufacturer member is receiving with this newsletter an Official 2005 Board of Directors Ballot.

In this election, there are five retail board seats open and two manufacturer board positions that need to be filled. The seven retail candidates that are seeking the five retail board seats are:

• Joe Cohen, Classic Cigars & British Goodies
• Mary Szarmach, The Cigarette Store Corp.
• Bob Thorud, Tobacco Outlet Plus
• David Newman, Cigarette World
• Andy Kerstein, Smoker’s Haven
• David Biddle, Mr. Smokes
• Jeff Kathman, Cut Rate Tobacco

The four manufacturer candidates are:

• Bob Culley, Liggett Vector Brand
• Joel Sherman, Nat Sherman Company
• Dean Rouse, M&R Holdings
• Steve Sandman, Altadis, U.S.A.

Please take a few minutes to review the ballot and the accompanying biography information for each candidate on the back of the ballot. Then, cast your votes, sign your ballot and either mail or fax the ballot back to the NATO office by December 15, 2004. Your vote is important so please complete and return your ballot.

Money Saver: Credit Card Fees

The NATO Membership Benefits Committee is announcing a new money saving credit card processing arrangement exclusively for NATO retail members. After reviewing proposals from major credit card processing companies, NATO has selected First Data Merchant Services to offer one of the lowest cost credit card processing services to NATO retailers. In fact, several NATO retail board members have calculated their annual savings to be in the thousands of dollars.

This program should save NATO retailers significant dollars because First Data is offering NATO retailers the same low credit card processing rates offered to the largest retail chains. For many NATO retailers, the yearly savings may pay for your annual NATO member dues multiple times over. Below is a chart of sample transactions fees under First Data’s arrangement.

There are no per transaction fees, application fees, or annual fees. A monthly statement fee is charged and new equipment leases are available. Supplies are free if the retailer pays for shipping. Next month, NATO retailers will receive detailed information about the program and how to sign up for this credit card service. This is another example of NATO working for its retail members.

On October 22nd, President George Bush signed into law a major corporate tax reform bill that included a tobacco farmer quota buy-out program, but did not include Food and Drug Administration regulations over the tobacco industry. NATO and its members worked diligently to urge Congress to remove the FDA regulations from the corporate tax bill. NATO will be ready to respond to any attempts during the 2005 Congressional session to revive the FDA regulations.

Thank You Letters 
Sent on FDA Bill

NATO has sent a thank you letter to each U.S. Representative that served on the U.S. Senate/U.S. House Conference Committee indicating NATO’s appreciation for their opposition to the FDA regulations. Many times, elected officials hear from constituents when legislation is pending that would negatively impact their business. NATO believes it is just as important to thank members of Congress for understanding the concerns of NATO members and opposing restrictive legislation. For this reason, NATO sent personal thank you letters to the representatives that served on the conference committee that negotiated the corporate tax relief bill and removed the FDA regulations from the legislation.

Voters Pass Excise Tax Hikes

On November 2nd, voters in Colorado , Montana and Oklahoma voted in favor of adopting higher cigarette and tobacco product excise taxes. The Colorado cigarette tax increases to $.84/pack and the OTP tax will rise to 40% of the manufacturer’s list price. In Montana , the new cigarette tax will be $1.70/pack and the OTP tax will be 50% of the wholesale price. In Oklahoma , the new cigarette tax will be $1.03/pack with a proportionate increase in the OTP tax. These voter approved higher taxes will take effect on January 1, 2005.

Legislative Tracking Services

As a part of NATO’s on-going commitment to provide the highest quality grassroots legislative assistance to its members, the association’s board of directors has entered into an agreement to receive daily legislative tracking services from STATENET. The legislative tracking service will include daily reports on tobacco-related bills in all 50 states and Congress. In addition, NATO has also signed an agreement with the Tobacco Merchants Association (TMA) to receive its exceptional legislative reporting service plus and its Tobacco Tax Guide. The tracking services from STATENET and the reporting service/tax guide from TMA will provide NATO’s consultants with up-to-the minute reports so they can work closely with NATO members to respond to tobacco legislation.

Welcome to New Members

In the past two months, NATO has been contacting companies that are planning to exhibit at the upcoming 2005 NATO Expo and urging them to consider joining NATO. As a result of those efforts, the following companies have become NATO members:

• B.G. Sales
• Blazer Products
• F&K Cigar
• Greenwing Corporation
• Ideal Tobacco Wholesale
• International Tobacco Partners
• Mitchell Thomas Trading Company
• OMI Industries
• Royal Blunts
• S.A.G. Imports
• Sheffield Exchange
• Tobacco Holdings
• Western Humidor
• WildHorse Distributing

Have a Happy Thanksgiving!

Happy Holidays to You and Your Family!

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