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December,
2004

FDA OVERSIGHT OF TOBACCO IS AVERTED...
FOR NOW...

On October 11th, the American Jobs Creation Act (H.R. 4520) was passed by the the U.S. Congress; most significantly for the domestic tobacco industry, it did not contain hotly debated legislation that would have granted the Federal Drug Administration (FDA) regulatory oversight of tobacco. A bullet was dodged... this time.

The tobacco regulations that were ultimately stricken from the legislation would have been highly detrimental to tobacco retailers, distributors, and most manufacturers. In fact, only one tobacco manufacturer - Philip Morris - supports FDA regulation of the tobacco industry, and is expected to continue backing future legislative efforts to achieve FDA oversight.

The defeated provisions would have:

  • Granted the FDA the authority to ban conventional tobacco products based on their use of natural or added ingredients, or require restrictions on the components of smoke generated by a tobacco product, altering the taste and smoking characteristics of many current products.
  • Granted the FDA the power to ban all flavored tobacco - cigarettes, cigars, pipe tobaccos, and RYO/MYO cigarette tobaccos. The pipe tobacco industry alone could be put out of business entirely.
  • Added new labeling requirements requiring tobacco merchandise to include the name and address of the packer, the quantity of the contents, and an accurate statement describing the percentage of domestic versus foreign grown tobacco, which could drive retailers out of business under the burden of excessive administrative and labeling costs.
  • Funded the program with "user fees" assessed on tobacco manufacturers and importers which, along with the costs of complying with FDA regulations and requirements, would have driven the price of tobacco products to levels high enough to drive business from retail stores.
Industry associations, including the National Association of Tobacco Outlets (N.A.T.O.) and the Retail Tobacco Dealers of America (RTDA), among others, did a stellar job of lobbying key legislators involved in the debate and rallying members to do the same - perhaps the largest effort ever to fend off a major threat to tobacco retailers.

The victory was an important one, but the effort may need to be repeated again in the next Congress, and the importance of participation by every retail member cannot be underscored enough.

E. Edward Hoyt III