Smoking Gun

Proposed FDA empowerment of tobacco would harm retailers, R.J. Reynolds says

Published in CSP Daily News

By
Mitch Morrison, Vice President & Group Editor

NEW YORK -- In the jockeying over Food & Drug Administration (FDA) tobacco legislation, R.J. Reynolds Tobacco Co. is that steady rider maintaining his gait. In this case, the gait is the message.

While Philip Morris USA switched tacks a few years ago in favor of placing tobacco products under the regulatory auspices of the FDA and the National Association of Convenience Stores (NACS) recently withdrew its FDA opposition, Reynolds maintains its steadfast opposition to a bill that has circulated in various machinations over the past decade, from the one spearheaded by Senator John McCain [image-nocss] in 1998 to the current proposal.

"It is a very onerous piece of legislation," said Dave Riser, vice president of government relations and trade marketing at the nation's second largest tobacco concern. "We believe this can have severe consequences to retail, wholesale and manufacturers, especially when you look at the sweeping jurisdiction the FDA would have to do almost anything they feel necessary for the good of public health.… That could be from directing store owners on how it can merchandise, advertise, where to place the product."

He added, "They can't ban the product or take nicotine down to zero, but they could take it to 0.01%"

Riser on Wednesday met with CSP Daily News to showcase Reynolds' new website nocigtax.com, which reports on state-by-state tobacco tax proposals and offers a simple vehicle for tax opponents to contact their elected officials (see tomorrow's CSP Daily News for a complete report on the website). He was joined by Steve Kottak, director of communication at parent company Reynolds American Inc., and Frank Lester, director of legislative policy and advocacy for Reynolds American.

Reynolds' latest push against the FDA proposal was triggered when the House Committee on Energy & Commerce overwhelmingly approved legislation that would grant the federal agency authority to regulate tobacco products. The bipartisan support was buoyed earlier this month when NACS shifted its longstanding position and said it was withdrawing opposition to H.R. 1108.

Explaining NACS' new position, Lyle Beckwith, the organization's senior vice president of government relations, recently said, "The current version of the legislation addresses all the concerns we had raised 18 months ago." Among key concessions, NACS said the new measure creates a level playing field by applying the bill's provisions to all tobacco retailers; and it establishes fair boundaries for retailer liability.

Still Not Enough

Officials at Reynolds, however, say such modifications aside, the bill is ostensibly the same as the previous measures organizations such as NACS had vigorously opposed. "Not only is it bad policy but it really can have a negative effect and impact on retail and wholesale," Riser said.

Interestingly, while Reynolds has been perceived as the anti-FDA in this debate, officials say they could support federal tobacco oversight under the following conditions:

Tobacco products remain legal. Tobacco products remain consumer-acceptable. Tobacco manufacturers be allowed to communicate {market] their products to adult tobacco user. Tobacco makers be able to continue developing new tobacco products. "Unfortunately, the bill being considered in Congress does not accomplish these goals," said Riser, quoting a recent statement by Tommy Payne, executive vice president of public affairs at Reynolds American.
While other trade groups, notably the National Association of Tobacco Outlets (NATO), continue to oppose FDA oversight, Riser acknowledged that the breakup of a once-aligned front of tobacco manufacturers, wholesalers and retailers does change the political dynamic before Congress.

"Anytime you have organizations, whether it's big manufacturers or associations saying they either support or are withdrawing opposition, it takes something that's been going on and considered a marathon and takes it down to a 5k," he said, alluding to the political immediacy. "It doesn't help—and I'll tell you what—our position is we oppose this bill as it is currently written."

By Mitch Morrison, Vice President & Group Editor
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