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June/July
1999

YOU CALL THIS A SLUMP?
LAS VEGAS DEFIES THE ODDS...

If this is what a trade show for an industry weathering a downturn looks likes, then imagine if the staggering growth had kept up. This year’s RTDA Trade Show will clock in at 50% larger than the same show two years ago. You remember - the one we all were certain would be the last big one. Who would have guessed?

Skeptics might easily remain non-plused by this development. “There are buildings full of unwanted cigars out there...of course this show is big! They have to try to sell them to someone!” grumble humidor managers weary of the bombardment of brands. But along with the bargain-priced closeouts has emerged a new generation of reasonably-priced, quality brands from reputable companies. Even better, manufacturers are supporting these brands and their old standbys via retail promotions at the store level with a gusto not seen in years. If you haven’t taken advantage, yet it’s about time you did.

Of course, betting on the future of tobacco in this country is about as safe a bet as playing the roulette tables. Backlash against any hot trend is practically a given; when it involves tobacco, though, the fireworks really begin to fly. The World Health Organization (WHO) continues to aim its guns on tobacco in general, and now cigars and pipes in particular. In April, a WHO study reported that cigars and pipes are as damaging to one’s health as cigarettes, and called for governments worldwide to treat them with the same advertising bans, strict health warnings, and high taxes. The report, prepared by a French research arm of WHO, is being billed as the first large-scale European study to prove the high risks of cigar and pipe smoking. Antismoking forces traditionally seize onto these reports to advance more restrictive legislation, and we can expect nothing less this time around.

Unfortunately, the work of rabid anti-tobacco forces eventually trickles down into popular opinion. “Assuming they can’t be outlawed, the Federal Trade Commission should at least require health warning labels on cigars,” the Seattle Post-Intelligencer barked recently, while the Allentown Morning Call notes that the absence of warning labels feeds the illusion that cigars are safer than cigarettes. Even as the FTC studies the labeling issue, California has again taken the matter into its own hands. It is on the verge of expanding its current labeling requirements on cigars to include three rotating warnings, similar to those currently found on cigarettes, and Massachusetts continues to pursue its own. Labeling requirements at the state level places a logistically complex burden on manufacturers and distributors, and is essentially unheard of for other consumable products. The adoption of a single Federal labeling requirement will continue to look more appealing as cigar paranoia keeps clogging state legislatures.

Much more amusing is the sordid story of state-level infighting on how to spend the money from the $246 billion tobacco settlement. Not surprisingly, the entire premise for the Attorney General’s assault on Big Tobacco - recouping Medicare costs related to treated smoking-related illnesses - has morphed into a magic funding free-for-all for every cause imaginable. The spending proposals have been relentless: they’ve included everything from supporting local school systems to funding higher education, expanding drug courts, training of health-care professionals. Even President Clinton has expressed his own dismay that “so few states are devoting tobacco settlement funds to reducing youth smoking.” They have been quick to propose legislation waiving the federal government’s claim to the settlement funds, ensuring their ability to spend the proceeds any way they like. It all proves what horrible policy the settlement is destined to be remembered for.

At least we can all enjoy a few days to concentrate on the heart and soul of our business at the RTDA convention. Be sure to make the most of the show!

E. Edward Hoyt III
Editor