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February 28, 2005

 

 

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

By: Thomas A. Briant, Executive Director

September 2004                                                                                    Volume 4, No. 6

FDA Legislative Update

House/Senate Conference Committee to Hold Hearings on Bill with FDA Regulations:  In September, a U.S. Senate and House Conference Committee will hold hearings to negotiate the differences between the Senate’s corporate tax bill that also grants the Food and Drug Administrative sweeping powers to regulate the manufacture and sale of all tobacco products and the House’s version of the corporate tax bill that does not contain the FDA regulations. The conference committee will begin negotiating in the first part of September after Congress returns from its summer recess.

NATO and NATO Members Fight FDA Regulations:  To protect the right of tobacco stores to advertise and sell tobacco products to adults without unnecessary government restrictions, the National Association of Tobacco Outlets is using every resource at its disposal to fight the FDA regulations. During the month of August, NATO has undertaken the following efforts to defeat the FDA regulations:

  • Drafted letters for NATO retail, wholesale and manufacturer members nationwide to send to their specific U.S. Senators and Representatives urging them to defeat the FDA regulations.
  • Provided alert sheets for each of the 2,000+ retail store members, wholesalers and manufacturers to urge employees and customers to call senators and representatives to defeat the FDA bill.
  • Mailed alert letters to more than 8,300 adult tobacco consumers who signed up for Project STOP and asked them to call their specific senators and representatives to oppose the FDA regulations.
  • Joined with more than 60 national and state trade associations as a signatory on a letter to key Senate and House leaders educating them about the severe impact of the FDA regulations.

Did You Receive Your FDA Letters and Alerts?:  If you did not receive your letters and alerts from NATO in August, please contact NATO Executive Director Thomas Briant immediately so that the letters and alerts can be resent to you. Several NATO members have indicated that they did not receive the letters and alerts sent to them by e-mail. The NATO toll-free number is 1-866-869-8888.

NATO to Take Further Action to Defeat FDA Regulations:  When Congress returns to work next week, NATO will continue its efforts by (1) sending all of the senators and representatives who are serving on the FDA bill conference committee a letter educating them about the significant economic impact of the proposed regulations on retailers and wholesalers, (2) schedule personal meetings between NATO retailers and their senator or representative if their elected official is appointed to the conference committee to allow the retailer to explain firsthand the impact of FDA regulations and (3) complete a letter writing campaign by NATO Texas members to House Majority Leader Tom DeLay of Texas to demonstrate support for his steadfast refusal to grant the FDA such broad regulatory powers.

Action Needed by NATO Members:  NATO members are reminded to mail their letters to their senators and representatives if they have not already done so and to continue to have employees and customers call the senators and representatives listed on the alert sheet urging them to oppose the FDA regulations.

NATO Response to Philip Morris U.S.A.
Letter on the FDA Regulations

On August 12, 2004, Philip Morris U.S.A. sent a letter to retailers and wholesalers explaining its support for the Senate’s proposed FDA regulations in H.R. 4520. Included in the letter is an explanation of key retail features of the FDA legislation. According to Philip Morris U.S.A., the letter was sent because “there has been information distributed to Congress, retailers and wholesalers that we believe does not accurately reflect the contents of the legislation.” NATO believes that certain explanations in the Philip Morris letter need to be clarified and that the association has an obligation to ensure that NATO members have a clear understanding of the bill and the impact of the FDA regulations. Philip Morris U.S.A. did not respond to NATO’s attempts to obtain clarification from a Philip Morris representative regarding the company’s explanations. The left side of the table below contains excerpts from the Philip Morris August 12th letter and the right side of the table is NATO’s clarification.

Philip Morris U.S.A. Explanation
NATO Clarification
“No Ban of Any Category of Tobacco Products.  The FDA may not ban cigarettes, smokeless tobacco or any other category of tobacco products.” While Philip Morris is correct in that the FDA is not allowed to ban any tobacco products, Section 917 of the FDA bill states that a federal agency, a state or a city can adopt and enforce a law or regulation that is more stringent than regulations adopted by the FDA “including a law, rule, regulation, or other measure relating to or prohibiting the sale, distribution, possession, exposure to, access to, advertising and promotion of, or use of tobacco products by individuals of any age…”
“No National Minimum Age Higher than 18.  The FDA may not establish a national minimum age to purchase tobacco products higher than 18.” While Philip Morris is correct in that Section 906(3)(A) of the FDA bill prohibits the FDA from establishing a minimum age to purchase tobacco products higher than 18, Section 917 of the bill would allow states or cities to adopt higher minimum age laws. Currently, Alabama, Alaska and Utah have laws setting the minimum age to purchase tobacco products at 19
“Reasonable Restrictions on Self-Service. Under the bill, the FDA will be required to reassess its previous rule against self-service displays to ensure that all advertising restrictions are applied equally to all outlets. Nothing in the legislation would require tobacco products to be stored out of sight, or under lock-and-key.” Section 102(a)(2) of the FDA bill incorporates the 1996 rules drafted by the FDA. These 1996 rules ban self-service tobacco displays in all kinds of retail stores unless “the retailer ensures that no person younger than 18 years of age is present, or permitted to enter, at any time.” From a practical point of view, this ban on self-service displays would require all tobacco products to be stored behind a counter or in locked cabinets on the store floor. NATO agrees that the actual language of the bill does not state “out of sight” or “under lock-and-key.” However, storing tobacco products out of sight behind a counter or in locked cabinets would be the primary methods for tobacco retailers to comply with the ban.
 “Package Warning Rules Only Impact Manufacturers. The bill provides for new warning messages on cigarette and smokeless packages. Those requirements apply to retailers only if a retailer manufactures and distributes its own product.” Section 201 of the FDA bill states as follows: “A retailer of cigarettes shall not be in violation of this subsection for packaging that is supplied to the retailer by a tobacco product manufacturer, importer, or distributor and is not altered by the retailer in a way that is material to the requirements of this subsection except that this paragraph shall not relieve a retailer of liability if the retailer sells or distributes tobacco products that are not labeled in accordance with this subsection.” Contrary to the Philip Morris letter, the actual language of Section 201 does not state that a retailer is liable only if it manufactures and distributes its own products.
 “No Discrimination Between Retail Categories.  The legislation…requires FDA to ensure that any of its advertising restrictions apply equally to tobacco stores and other retail outlets. All such rules must be on an equal, level playing field basis for all retailers.” The 1996 FDA regulations incorporated into the FDA legislation would ban all in-store advertising of tobacco products and only allow brand names and prices to be displayed using “black text on a white background”.  While the 1996 FDA regulations allow a tobacco store which prohibits access to minors to display tobacco advertising in the store, Section 913 of the actual FDA bill would override this exception for tobacco stores and ban all in-store advertising. The prohibition on advertising would be subject to constitutional standards.

Other NATO News


Brief Talking Points for Sharing Concerns About the FDA Bill: The more people that learn about the negative impact of the proposed FDA regulations on retail and wholesale businesses that sell cigarettes and tobacco products, the greater the likelihood that Congressional members will decide to follow a reasonable course of action and oppose the FDA regulations. Below is a list of short talking points that you can use in any number of situations when discussing the FDA bill:

  • Tobacco products are one of the most heavily regulated products in the country and another layer of federal government regulations is not needed.
  • The FDA bill gives states and cities the authority to outright ban the sale of cigarettes and tobacco products and usher in a new era of prohibition. This country prohibited liquor in the 1920’s and the experiment was a dismal failure.
  • The FDA bill will require retailers to put all tobacco products behind counters or under lock and key unless customers are not allowed to bring their small children into the store with them. Congress should not pass the FDA regulations and force parents to leave a child in the car or on the sidewalk outside a tobacco store when they go shopping for legal tobacco products.

Nominations Open for NATO Board Positions:  This November, the terms of seven NATO board members will expire and NATO members will vote to elect five retailers and two manufacturer/accessory/wholesaler representatives to serve two year board terms. To be eligible for an open board seat, a candidate must be an owner, partner, shareholder, officer or employee of a member in good standing. The duties of the board include setting goals for the association, approving actions to be implemented by the association and overseeing the management of the association. The NATO board meets approximately once every two months with three meetings held via telephone conference call and three other meetings conducted in person during the year. One of the best ways to become more active in the association is to run for a board seat. If you want to be nominated as a candidate for a seat on the NATO board, please call NATO Executive Director Thomas Briant at 1-866-869-8888 by October 15th.

Coupon Clearinghouse Feedback Survey:  The NATO Retail Survey Committee is asking for input from NATO members if they have experienced reduced payments from clearinghouses that process retail coupons. Several NATO retail members have reported accurately counting coupons before submitting them only to be informed later by the clearinghouse that the number of coupons submitted was less than the number claimed by the retailer. In these kind of situations, there is generally no recourse for the retailer to recoup the amount that the clearinghouse claims was short. If you have experienced a similar problem, please contact NATO Retail Survey Committee Member Joan Livingston at 254-791-0876.

Annual Membership Dues:  Just a reminder for those NATO retailers, wholesalers and manufacturers who have not yet remitted their 2004 annual membership dues. The principal revenue source for NATO is the annual membership dues paid by members. If you recently received a telephone call or a memo and an invoice from NATO for outstanding 2004 membership dues, please take a minute to issue a check to pay your membership dues. NATO will continue to protect the tobacco store segment of the industry and the payment of each member’s annual dues will enable NATO to carry out its mission.

New Retail Promotions to be Announced in October:  A second round of money saving special promotions will be announced in the October NATO Monitor Newsletter. The promotions will be offered by NATO manufacturers exclusively to NATO members from October through December.

Welcome New Manufacturer Members: NATO welcomes Felipe Gregorio Tobacco World, SX Brands and NIBO Group as new NATO manufacturer members.


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