Tobacco.org

• New Web Site Provides Info On Upcoming Smoking Ban  

A new government Web site has been launched to ease the transition with a new law that requires restaurants, bars and lodging establishments that serve food and drink to go smoke-free as of January 2, 2010.

The Web site, www.SmokeFree.NC.gov, provides business owners and customers information on the new law, on the health hazards of secondhand smoke and on resources to help those smokers who may want to quit smoking. There are downloadable fact sheets, no-smoking signs and other tools to help make the transition to smoke-free air an easy one.

"This change is historic for North Carolina and will have a significant positive impact on public health," said Gov. Bev Perdue. "By banning smoking in our restaurants and bars, we will greatly reduce the dangers of secondhand smoke and lower health care costs for families. Our goal is to make sure North Carolina's families and businesses have the information they need about the hazards of second-hand smoke and how to implement the new law."

The new law (G.S. 130A-497) was passed by the General Assembly and signed by Governor Bev Perdue in May, and will make virtually all indoor areas of restaurants and bars in the state smoke-free, with very few exceptions.

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Form 10-Q Quarterly Report  

Overview

The condensed consolidated financial statements (unaudited) include the accounts of Reynolds American Inc., referred to as RAI, and its wholly owned operating subsidiaries. RAI’s wholly owned subsidiaries include R. J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc., referred to as Santa Fe; Lane, Limited, referred to as Lane; Conwood Holdings, Inc.; and Conwood Company, LLC and Rosswil LLC, collectively referred to as the Conwood companies.

RAI was incorporated as a holding company in the state of North Carolina on January 5, 2004, and its common stock is listed on the NYSE under the symbol “RAI.” RAI was created to facilitate the business combination of the U.S. business of Brown & Williamson Holdings, Inc., referred to as B&W, with R. J. Reynolds Tobacco Company on July 30, 2004.

References to RJR Tobacco prior to July 30, 2004, relate to R. J. Reynolds Tobacco Company, a New Jersey corporation and a wholly owned subsidiary of R.J. Reynolds Tobacco Holdings, Inc., referred to as RJR. References to RJR Tobacco on and subsequent to July 30, 2004, relate to the combined U.S. assets, liabilities and operations of B&W and R. J. Reynolds Tobacco Company, a North Carolina corporation.

RAI’s reportable operating segments are RJR Tobacco and Conwood. The RJR Tobacco segment consists of the primary operations of R. J. Reynolds Tobacco Company. The Conwood segment consists of Conwood Holdings, Inc., the primary operations of the Conwood companies and Lane. RAI’s wholly owned subsidiary, Santa Fe, among others, is included in All Other. The segments were identified based on how RAI’s chief operating decision maker allocates resources and assesses performance. Some of RAI’s wholly owned operating subsidiaries have entered into intercompany agreements for products or services with other RAI operating subsidiaries. As a result, certain activities of an operating subsidiary may be included in a different segment of RAI. . . .

Various legal proceedings or claims, including litigation claiming that cancer and other diseases, as well as addiction, have resulted from the use of, or exposure to, RAI’s operating subsidiaries’ products, are pending or may be instituted against RJR Tobacco, the Conwood companies or their affiliates, including RAI and RJR, or indemnitees, including B&W. These pending legal proceedings include claims relating to cigarette products manufactured by RJR Tobacco or certain of its affiliates and indemnitees, as well as claims relating to smokeless tobacco products manufactured by the Conwood companies. A discussion of the legal proceedings relating to cigarette products is set forth below under the heading “— Litigation Affecting the Cigarette Industry.” All of the references under that heading to tobacco-related litigation, smoking and health litigation and other similar references are references to legal proceedings relating to cigarette products and are not references to legal proceedings involving smokeless tobacco products, and case numbers under that heading include only cases involving cigarette products. The legal proceedings relating to the smokeless tobacco products manufactured by the Conwood companies are discussed separately under the heading “— Smokeless Tobacco Litigation” below.

In connection with the B&W business combination, RJR Tobacco has agreed to indemnify B&W and its affiliates, including its indirect parent, British American Tobacco p.l.c., referred to as BAT, against certain liabilities, costs and expenses incurred by B&W or its affiliates arising out of the U.S. cigarette and tobacco business of B&W. As a result of this indemnity, RJR Tobacco has assumed the defense of pending B&W-specific tobacco-related litigation, has paid the judgments and costs related to certain pre-business combination tobacco-related litigation of B&W, and has posted bonds on behalf of B&W, where necessary, in connection with cases decided since the B&W business combination. In addition, pursuant to this indemnity, RJR Tobacco expensed less than $1 million during each of the first nine months of 2009 and 2008 for funds to be reimbursed to BAT for costs and expenses incurred arising out of certain tobacco-related litigation.

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PROHIBIT SMOKING IN OUTDOOR DINING AREAS 

Motion - That the City Attorney be requested to prepare and present an ordinance to prohibit smoking in outdoor dining areas and within five feet of such areas, similar to a recent ordinance enacted by the City of Burbank. . . .

Date Activity 10/22/2009 Arts, Parks, Health and Aging Committee scheduled item for committee meeting on October 27, 2009.

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University of Kentucky Tobacco-Free Policy 

"Enacting the tobacco-free policy at the University of Kentucky in November will greatly improve the campus atmosphere for all members of our community," said UK President Lee T. Todd, Jr. "This policy has already created a healthier environment for patients, workers, and visitors at the UK HealthCare Medical Campus, and we look forward to the long-term benefits of its implementation throughout all areas of the UK campus."

The University of Kentucky campus will become completely tobacco-free on all campus grounds and parking areas on November 19, 2009, coinciding with the American Cancer Society's Great American Smokeout®, held annually on the third Thursday in November. A tobacco-free policy, which prohibits the use of all tobacco products on all grounds and parking areas (cigarettes, chew, pipes, cigars, snuff, etc.), has already been in effect at the UK Medical Center and all UK HealthCare-owned facilities within Fayette County since November 20, 2008, and will now apply to all areas of the contiguous UK campus in Lexington, indoors and out. . . .

Frequently Asked Questions

-When does the tobacco-free policy go into effect?

November 19, 2009, in conjunction with the American Cancer Society's Great American Smokeout.

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Form 8-K Current Report  

Third Quarter and Nine Months 2009 — At a Glance

• Adjusted EPS: third quarter at $1.24, down 3.9 percent; nine months at $3.54, up 0.6 percent

o Excludes non-cash trademark impairments in both years, and prior-year restructuring charges and gain from joint-venture termination

• Reported EPS: third quarter at $1.24, up 72.2 percent; nine months at $2.56, down 30.2 percent

• RAI increases 2009 guidance: Adjusted EPS range of $4.60 to $4.70

• R.J. Reynolds Tobacco Company posts additional margin gains

• Conwood captures 29.9 percent share of moist-snuff market

• RAI again recognized as a leader in corporate sustainability

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New York City Council Attacks Flavored Tobacco 

Well, so this isn’t strictly a story about taxes but the ongoing rush to condemn our favorite past time (as brothers of the leaf) is just ludicrous! Share this with anyone you know in New York and see if we can’t stop the insanity! What follows is a letter to the NYC City Council from the National Association of Tobacco Outlets (NATO):

July 24, 2009 Proposed Flavored Cigarette Ban Superceded by New FDA Law; Extrapolations of Studies and State Laws Do Not Support Flavored Tobacco Ban New York City Council Members New York City Council City Hall, Room 5 New York, NY 10007 Dear Council Member: The National Association of Tobacco Outlets (“NATO”) strongly opposes Proposed Introduction No. 433A that seeks to ban the sale of flavored cigarettes, flavored cigars, flavored chewing tobacco and other flavored tobacco products. While you may already have an opinion about tobacco products, I urge you to read this letter to fully understand how studies and other state statutes have been extrapolated in an illogical manner in a vain attempt to support adoption of this ban on flavored tobacco products. . . .

In short, the report issued by the Committee on Health cannot and should not be relied upon from a legal or factual standpoint to support the passage of Proposed Introduction No. 433-A. All of the studies cited in the report are from anti-tobacco organizations or government health agencies that by any definition are not impartial or unbiased. To exacerbate this lack of scientific impartiality, the report takes far too many liberties with the factual basis of these studies and state laws to have any legal credibility. This lack of integrity found within the report will lay the groundwork for possible legal action to enjoin the administration and enforcement of the proposed regulation if it is passed into law.

For the New York City Council to adopt Proposed Introduction No. 433-A based in whole or in part on the extrapolations and inaccuracies in the Committee on Health report is an example of inappropriate public policymaking. While NATO and its members have always supported the goal of preventing underage youth tobacco use, the extraneous nature of the Committee on Health report calls into serious question whether the regulation is even necessary.

With the new FDA tobacco regulations banning flavored cigarettes across the country and the lack of credible empirical support for a ban on all other flavored tobacco products, I urge you to not proceed with a final vote on Proposed Introduction No. 433-A.

Sincerely yours,

Thomas A. Briant

NATO Executive Director and Legal Counsel

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DCA Initiative / PREVENTING TEEN TOBACCO USE 

WHAT TOBACCO RETAILERS NEED TO KNOW

The DCA licenses cigarette retailers in New York City, and enforces City and State laws that prohibit the sale of tobacco to minors.

The agency takes this responsibility seriously. All retail tobacco dealers in New York City must register with the State Department of Taxation and Finance to sell tobacco products in New York City, and cigarette retailers must get an additional license from the DCA.

The DCA runs one of the best and most comprehensive Teen Tobacco Enforcement Programs in the country, in which teens work with agency inspectors and go undercover to curb illegal sales to minors. Accompanied by a DCA inspector, teens conduct more than 14,000 routine inspections year-round in all five boroughs.

The DCA's Teen Tobacco Enforcement Program is funded by a New York State grant administered by the New York City Department of Health and Mental Hygiene.

Compliance by stores inspected by the DCA has gone from 52%, when the program formally began in 1998, to more than 80% in recent years.

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USDA Reminds Tobacco Quota Holders and Producers of Sign-Up Deadline for 2010 Payment Nov. 2, 2009, Deadline also Applies to Sales of Remaining Payments  

Agriculture Secretary Tom Vilsack today reminded tobacco quota holders and producers not currently enrolled in the Tobacco Transition Payment Program (TTPP) that they have until Nov. 2, 2009, to sign-up to receive a 2010 TTPP payment.

The TTPP, also known as the tobacco buy-out, provides approximately $10 billion in ten annual installments to eligible tobacco quota holders and producers from 2005 through 2014. Payments for 2010 through 2014 will be issued annually in January.

USDA also reminds tobacco quota holders and producers that they have until Nov. 2, 2009, to sell their remaining five annual payments to a successor to receive a lump-sum payment. Certain requirements must be met to qualify for lump-sum payments. More information on lump-sum payments is available at www.fsa.usda.gov/tobacco or by calling the USDA Farm Service Agency at (202) 720-7901. Contract holders who do not complete this process by Nov. 2, 2009, can arrange for the sale of their remaining four payments beginning Jan. 19, 2010.

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Singapore Health Promotion Board receives support for proposed amendments to Smoking Act 

The Singapore Health Promotion Board (HPB), in partnership with Health Science Authority (HSA), conducted a public consultation exercise, from 3 - 28 August 2009, on proposed amendments to the Smoking (Control of Advertisements and Sale of Tobacco) Act and other smoking control measures.

The public consultation exercise on the proposed changes to the Smoking (Control of Advertisements and Sale of Tobacco) Act received 171 responses. Respondents included individuals, tobacco manufacturers, importers and retailers, healthcare professionals and majority were in support of the proposed changes, with many providing suggestions to enhance smoking control measures.

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Regulating Tobacco: Q&A with Lawrence Deyton, M.S.P.H., M.D. 

Q: On June 22, 2009, President Obama signed the Family Smoking Prevention and Tobacco Control Act, which gives FDA the authority to regulate tobacco products. What are your key goals for this legislation?

A: Our objective is to use the best available science to develop and put into action effective public health strategies to reduce the enormous toll of illness and death caused by tobacco products.

According to the Centers for Disease Control and Prevention, tobacco use causes more than 400,000 deaths each year in the United States—about 1 out of every 5 deaths. On average, adults who smoke cigarettes die 14 years earlier than nonsmokers. And more than 8.5 million Americans have chronic illnesses related to smoking. Despite those facts, 1 in 4 high school students report current tobacco use. About 3,600 kids start smoking and 1,100 kids become regular smokers every day.

Our priorities are to

* prevent youth from using tobacco;

* help adults who use tobacco to quit;

* provide accurate information on the contents of tobacco and consequences of tobacco use to the public; and

* use regulatory tools, including tobacco product standards, to reduce the public health burden of tobacco in the United States.

Q: Is FDA going to ban tobacco?

A: No. The law specifically states that FDA cannot ban an entire category of tobacco products, such as cigarettes.

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Candy and Fruit Flavored Cigarettes Now Illegal in United States; Step is First Under New Tobacco Law 

The U.S. Food and Drug Administration announced today a ban on cigarettes with flavors characterizing fruit, candy, or clove. The ban, authorized by the new Family Smoking Prevention and Tobacco Control Act, is part of a national effort by the FDA to reduce smoking in America. Smoking is the leading preventable cause of death in America.

The FDA's ban on candy and fruit-flavored cigarettes, effective today, highlights the importance of reducing the number of children who start to smoke, and who become addicted to dangerous tobacco products. The FDA is also examining options for regulating both menthol cigarettes and flavored tobacco products other than cigarettes.

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• Draft Guidance: The Scope of the Prohibition Against Marketing a Tobacco Product in Combination with Another Article or Product Regulated under the Federal Food, Drug, and Cosmetic Act 

The Center for Tobacco Products is posting a draft guidance document entitled "The Scope of the Prohibition Against Marketing a Tobacco Product in Combination with Another Article or Product Regulated under the Federal Food, Drug, and Cosmetic Act." The availability of this draft guidance will be announced in a notice published in the Federal Register in the near future. . . .

This guidance document is being distributed for comment purposes only. . . .

This draft guidance, when finalized, will represent the Food and Drug Administration's (FDA's) current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. You can use an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations. If you want to discuss an alternative approach, contact the FDA staff responsible for implementing this guidance. If you cannot identify the appropriate FDA staff, call the appropriate number listed on the title page of this guidance.

I. Introduction

This guidance is intended for manufacturers, retailers, importers, and FDA staff. The guidance describes FDA’s current thinking regarding the scope of the provision prohibiting the marketing of a tobacco product in combination with another product regulated under the Federal Food, Drug, and Cosmetic Act (FDCA). It is not intended to be an exhaustive analysis of all activities that may or may not fall within the scope of the prohibition. . . .

A. FDA believes the following activities are included within the scope of section 201(rr)(4) of the FDCA and, therefore, are prohibited:

A tobacco product and a non-tobacco product regulated under the FDCA are physically, chemically, or otherwise combined or mixed to produce a single entity that is marketed as containing both products. For example:

*

* Mouthwash (which may be a drug or a cosmetic under the FDCA) is added to the ingredients of a cigarette and the cigarette is identified as containing mouthwash. . . .

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Transcript for FDA's Media Briefing on Ban on Cigarettes with Certain Characterizing Flavors (PDF) 

Kathleen Quinn: Thank you (Melissa). Hello everybody. I’m Kathleen Quinn with the Center for Tobacco Products. I’d like to start off by thanking you all for joining us today regarding the ban on cigarettes with certain characterizing flavors.

We’re going to start today’s call with some opening remarks. I have with me today Dr. Howard Koh, the Assistant Secretary for Health at the Department of Health and Human Services, Dr. Margaret Hamburg, Commissioner of Food and Drugs, and Dr. Lawrence Deyton, our new director for the Center for Tobacco Products. . . .

Howard Koh: Thank you very much Miss Quinn . . .

I’m very pleased to report that FDA is not facing this challenge alone. To begin, other agencies within HHS and other agencies across the federal government are sharing their expertise with FDA and offering their leadership to launch a new chapter in public health efforts in tobacco control.

Just as an example, the CDC is working closely with FDA to identify key areas for progress in tobacco control by sharing its expertise in the content of tobacco products. And in another example, the NIH is coordinating its research agenda with the specific task facing FDA to support science-based regulation to advance public health. The FDA has just established a Center for Tobacco Products as part of a historic new effort to curb the hundreds of thousands of preventable deaths caused by tobacco products each year.

As you will hear, this Center will be overseeing the implementation of the Family Smoking Prevention and Tobacco Control Act, which was signed into law by President Obama on June 22, 2009. To protect public health, this historic act gives the FDA new authority to regulate marketing and promotion of tobacco products. We are here today because we know that tobacco addiction is a public health catastrophe. . . .

Gardner Harris: Hi. You all have banned flavorings in cigarettes. Have you made any decisions about what to do about flavorings in other forms of tobacco -- small cigars, smokeless tobacco, snuff, other things like that? Thanks.

Lawrence Deyton: This is Dr. Deyton. I’ll start the answer. The act provides us with authority today to ban cigarettes with certain characterizing flavors. Other flavored tobacco products are issues which we will be studying and certainly be discussing with the Scientific Advisory Committee, which is being set up.

Coordinator: Thank you. The next is from Jennifer Corbett, Wall Street Journal. Your line is open.

Jennifer Corbett: Yes, hi. I think this is just a follow to Gardner’s question. The question I have is -- and you mentioned in your press release -- that you’re looking at menthol cigarettes, because my understanding (about) is the - that’s the biggest flavor out there that...

Lawrence Deyton: Yes, the menthol issue is also specifically addressed in the Family Smoking Prevention and Tobacco Control Act, and that is an issue again which we will be discussing with our Scientific Advisory Committee and studying. We’ve been asked specifically by the act to study that.

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Deadlines Under the FSPTCA 

Final rule to be published on cigarettes and smokeless tobacco.

The first day of publication of the FR that is 180 days or more after enactment of FSPTCA

3/19/10

102(a)(2)(F)

The final rule on cigarettes and smokeless tobacco shall be identical in its provisions to part 897 of the 1996 rule published in the FR August 28, 1996.

Rule shall become effective 1 year after the date of enactment of the FSPTCA.

6/22/10

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Federal Register Notice Extends the Call for Industry Nominations to the Tobacco Scientific Products Advisory Committee  

Request for Notification From Industry Organizations Interested in Participating in the Selection Process for a Nonvoting Industry Representative on the Tobacco Products Scientific Advisory Committee and Request for Nominations for Nonvoting Industry Representatives on the Tobacco Products Scientific Advisory Committee; Amendment of Notice . . .

Any industry organization interested in participating in the selection of an appropriate nonvoting member to represent industry interests should send a letter stating that interest to the FDA contact (see ADDRESSES) within 30 days of publication of this document. Within the subsequent 30 days, FDA will send a letter to each organization that has expressed an interest, attaching a complete list of all such organizations; and a list of all nominees along with their current resumes. The letter will also state that it is the responsibility of the interested organizations to confer with one another and to select a candidate, within 60 days after the receipt of the FDA letter, to serve as the nonvoting member to represent industry interests for the Tobacco Products Scientific Advisory Committee. The interested organizations are not bound by the list of nominees in selecting a candidate. However, if no individual is selected within 60 days, the Commissioner of Food and Drugs will select the nonvoting member to represent industry interests.

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