Bill would toughen tobacco regulation, ban ads aimed at kids
Bill would toughen industry oversight, restrict ads targeting children
By Ruth Mantell, MarketWatch
Last Update: 3:50 PM ET Mar 4, 2007
WASHINGTON (MarketWatch) -- Smokers trying to quit and parents trying to make sure their children never start may gain a helping hand from a piece of recently proposed legislation.
The Family Smoking Prevention and Tobacco Control Act aims to clear the air around tobacco marketing by charging the Food and Drug Administration with regulating claims about reduced-risk products as well as levels of tar and nicotine, and with preventing tobacco advertising that targets children.
MO 83.48 -0.86
RAI 59.66 -0.73
"The restrictions on marketing in this legislation, combined with the improved health warnings, will make it easier for tobacco prevention and cessation," said Matthew Myers, president of Campaign for Tobacco-Free Kids.
Reducing youth tobacco use by 50% would prevent more than 10 million children today from becoming regular smokers and save $75 billion in heath-care costs, according to the bill.
To protect children, the bill would also prevent cigarettes from containing flavors such as strawberry or grape. The legislation was discussed last week at a Senate Committee on Health, Education, Labor & Pensions hearing,
"The elimination of those forms of marketing that have been shown to contribute to tobacco use will make it easier for tobacco prevention programs and, candidly, for parents to be more effective," Myers said.
Giving the FDA power over tobacco could tighten what some observers say has been lax oversight by the Federal Trade Commission. The FTC currently enforces the federal truth-in-advertising laws for tobacco, monitors deceptive claims and reports to Congress on cigarette and smokeless tobacco labeling, advertising and promotion.
"The FTC is essential, unfortunately the FTC hasn't done its job," said Gregory Connolly, a professor with the Harvard School of Public Health.
Connolly noted that the FTC's last s mokeless tobacco report, which was issued in 2003, covered 2000 and 2001. The FTC's last cigarette report was issued in 2005 and covered 2003.
"If anything, the FTC has been protecting the industry...letting them get away with false and misleading claims about light cigarettes," Connolly said.
The FTC declined to respond.
Backhanded approval?
Critics worry that the bill would effectively stamp tobacco products with an FDA seal of approval. Sen. Michael Enzi, R- Wyo., noted at Tuesday's hearing that the bill could undermine the health agency, which would not have the authority to ban tobacco.
"Just having the FDA review and approve cigarettes sends mixed and confusing messages to the public, creating the sense that cigarettes are safe or made safer," he said. "The FDA approves cures, not poisons."
Dr. Alan Blum, director of the University of Alabama Center for the Study of Tobacco & Society, said at the hearing that the FDA would end up "doing the dirty work" for the tobacco industry if the bill is enacted. He noted that the bill does not ban cigarette filters, which he described as the "biggest and longest running scam of big tobacco."
A trio of advertising groups also oppose the bill, worried about starting "down this road to content-based censorship of advertising," according to a letter they submitted for the hearing's record.
"They are creating rules that are so restrictive that perfectly legitimate communication would be impossible," said Dan Jaffe, executive vice president for the Association of National Advertisers, which represents major national advertisers. "We believe this back-door censorship is really a ban."
He added that the bill could censor communication to adults.
"You can't just say 'we're protecting kids' and lower discourse to the level in the sandbox," Jaffe said. "There may be ads that are aimed at children. The FTC has the authority and ability to stop it."
Tobacco companies' agenda
Philip Morris's support for the bill also gives pause to some. The company (MO: news), which is the nation's leading cigarette manufacturer, owning brands such as Marlboro, said in a statement that it believes regulation would "bring predictability and clear standards" to the United States tobacco industry.
David Howard, a spokesman with R.J. Reynolds Tobacco Co. (RAI: news), said the current bill does not allow "effective competition."
"If you take away most every avenue of communication with adult tobacco consumers to make it almost impossible to differentiate your product...that is a definitive benefit to the market leader," he said.
Charles Norton, co-manager of the Vice Fund, which invests in tobacco, alcohol, gambling and defense companies, said the bill would "definitely benefit the largest cigarette makers." Norton said increased regulatory costs would make it harder for smaller manufacturers such as R.J. Reynolds and Lorillard Tobacco Co. to compete.
"An increase in regulatory costs...in effect makes higher barriers to entry for the tobacco industry," he said. "It would be harder Reynolds to gain market share relative to Philip Morris."
Norton said opposition to the bill means it will face a rough road to enactment, but he added that he is still "very positive" on tobacco regardless of what happens with the proposed act.
"I honestly don't think it will have much impact at all," he said. "Consumers of cigarettes are going to smoke regardless of whether the FDA regulates the industry."
Ruth Mantell is a MarketWatch reporter based in Washington.
Market Data 
Markets 
AI
