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A Vector Group unit must pay about $700,000 to the family of a retired trucking-company supervisor who died of lung cancer after smoking for 55 years, a Florida jury ruled.
A state court jury in Fort Lauderdale concluded Friday that Vector's Liggett Group LLC is liable for Joseph Ferlanti's death in 2004.
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Tobacco products, because of their addictive qualities, remain a relatively unscathed market even in uncertain economic times. And with the market ups and downs, these businesses could even see an increase in sales from smoking clientele looking to quell their nerves.
However, the steady cash returns from tobacco stocks come with some tradeoffs:
* They offer limited growth prospects, especially as tobacco customers die off (as smokers tend to suffer greater death rates actuarially than nonsmokers). * These stocks represent investments in what some refer to as a "sin" sector, eschewed by "socially responsible" portfolio managers. * These stocks' companies stand in the crosshairs of some former-customers-turned-angry-plaintiffs as well as tax-hungry legislators. * Anti-smoking forces have been taking aim at retail distribution of cigarettes as well as venues for smoking and advertisements that they claim are targeting youth to replace the base of mature smokers.
These built-in risks, not to mention the currently treacherous stock market, should be enough to compel any investor interested in investing in tobacco stocks to first consider carefully their investment.
Still, if an investor is unbothered by moral arguments against tobacco and is willing to test the roily investment waters, some arguments exist for considering tobacco stocks.
The U.S. Environmental Protection Agency has fined a North Carolina company for violations at a Kauai facility.
Vector Tobacco, a subsidiary of Vector Tobacco Group of Durham, N.C., was fined $65,040 for allegedly misusing pesticides during application at its agricultural research facility in Kekaha on Kauai in 2005 and 2006, according to the EPA. On 93 occasions, the company failed to follow label directions intended to protect workers from exposure to pesticides.
"Employers of agricultural workers must ensure their employees are provided with information and protections that minimize the risk of potential exposure to pesticides . . .
The company also failed to prevent workers from entering areas where pesticides had recently been applied and then denied them prompt transportation to a medical facility after the workers reported adverse health effects due to the pesticide exposure, the EPA said.
The Hawaii Department of Agriculture discovered the violations during inspections in 2006 and began an investigation. The EPA said Vector Tobacco has shut down the Kekaha facility since the inspections.
Vector Group Ltd., the parent of Liggett Group Inc. tobacco company, announced today that it has donated $2.4 million to provide for the expansion of spiral CT scanning research at the Joan and Sanford I. Weill Medical College of Cornell University in New York City. The project is headed by Dr. Claudia Henschke of Weill Medical College, who has assembled an international, multi-site collaboration for lung cancer screening. . .
Bennett S. LeBow, Chairman and CEO of Vector Group said, ``We are very proud and thankful that we are able to help support this very important cause and believe it's the right thing to do. Spiral CT scanning can potentially save millions of lives a year. We are especially pleased to partner with Weill Cornell Medical College and Dr. Henschke and her esteemed colleagues to further efforts to ensure the availability and reliability of this critical cancer screening method. We hope the other companies in the industry join us in our efforts.'' . .
Dr. Henschke, Professor of Radiology and Chief of Chest Imaging at the Weill Medical College of Cornell University, stated, ``Thanks to the contribution of Mr. Lebow and Vector Group, we have raised the initial funding needed to support this important research and data collection on the effectiveness of spiral CT scanning. In the U.S. alone, there are currently 48 million former smokers and 40 million smokers waiting to be screened by this method. This endowment brings us one step closer to amassing the data needed to ensure that this screening is reliable, affordable and accessible to all who need it going forward.''
The press release quotes Bennett LeBow, chairman and CEO of Vector Group: . . .
The document is posted at http://www.tobacco.org/news/54637.html. . . .
Over the past four years, Henschke received over $100,000 in grants and contracts from ACS, the society said. This included several $10,000 to $15,000 contributions for the annual meeting of the I-ELCAP, and a $61,850 contract to support the I-ELCAP pathology and cytology evaluation program.
Each time she accepted ACS funds, Henschke signed a document certifying that she didn’t represent a tobacco company or subcontract work to those who do.
The ACS definition of a “tobacco company” contained in each of these documents includes “any company that manufactures tobacco products and is commonly considered to be part of the tobacco industry, including subsidiaries and parent companies, as well as philanthropic foundations and other organizations closely linked with the tobacco industry.” . . .
Though scientists who receive Legacy money are precluded from accepting concurrent funds from tobacco sources, surpluses of funds received from tobacco companies in the past are exempted from this prohibition, Cartwright said.
“The American Legacy Foundation requires grant recipients to agree not to accept tobacco funds or anything else of value from tobacco companies during the Legacy grant period,” she said in an e-mail. “It does not include a look-back provision, i.e., we do not disqualify grantees on the basis that they may have previously received tobacco support. . . .
On March 10, at a gala at the Pierre hotel, Legacy gave Henschke its “Humanitarian in Medicine and Public Health Award.”
In 2007, the Flight Attendant Medical Research Institute gave $8.7 million to Weill Cornell to set up a “multidisciplinary research and clinical program to enhance early detection and treatment of diseases related to secondhand smoke exposure-including cancer, heart disease, emphysema, asthma, chronic bronchitis and osteoporosis.”
The initiative, called the FAMRI-I-ELCAP Collaborative Network, was expected to recruit 5,000 individuals from industries associated with exposure to secondhand smoke.
Two days ago, Philip Morris backed NC-State scientists announced they'd genetically engineered tobacco plants to have reduced levels of some carcinogens. Further investigation by Wired.com revealed that the tobacco giant has applied for 34 field test permits for genetically modified tobacco since May of 2005, according to the USDA field trials database. 33 of the permits were issued.
Over the last three years, the USDA received 117 total applications to test GM tobacco strains, including 19 by North Carolina State University, which received $17.5 million from Philip Morris in December 2002 to map the tobacco genome.
Little can be determined about the types of studies that Philip Morris has run because they've labeled the details of their field permit applications, "Confidential Business Information," sealing them from public scrutiny. . . .
Vector Tobacco, which has developed a low-nicotine variety of the crop, has applied for 14 field permits since 2005, although five were rejected. RJ Reynolds has applied for six, and had one denied.
But the scale of the Philip Morris' genetic engineering program caught even staunch anti-GMO groups off-guard. Bill Freese, of Center for Food Safety, commented, "I'm shocked."
Many groups that fight genetically modified organisms focus on genetically modified food or "pharming," or the practice of synthesizing pharmaceuticals in plants. Tobacco, however, is a natural drug crop and falls between the cracks of most watchdog groups.
Vector Group Ltd.'s (NYSE: VGR), subsidiary, Liggett Group, announced today that it plans to introduce Grand Prix snus, a Premium quality pouched tobacco product designed for adult smokers who are interested in smokeless tobacco alternatives to cigarettes. Grand Prix snus will be available in a variety of test markets beginning in May 2008.
The product is the latest addition to the Grand Prix brand, the fastest growing U.S. cigarette brand over the past two years. Grand Prix snus will be sold at value pricing and will be available in three varieties: Original, Spearmint and Wintergreen.
Grand Prix snus will be manufactured in Sweden under an agreement with Snusab, a Stockholm-based manufacturer of premium snus products.
Public health advocates are within striking distance of a goal that has eluded them for generations: widespread availability of cigarettes with nicotine levels that are too low to become addictive.
They are pinning their hopes on a bill sponsored by Senator Edward M. Kennedy, Democrat of Massachusetts, which would give the Food and Drug Administration sweeping regulatory authority over tobacco products.
That new power would include the ability to reduce cigarettes' harm, which many say eventually could lead to the market being flooded with cigarettes that contain less nicotine -- the chemical component that makes them addictive. While the FDA can regulate nicotine-replacement therapies now, it lacks regulatory oversight over cigarettes and smokeless tobacco, and it can't prevent tobacco sales to youths.
Already, near rolling hills where generations of North Carolina farmers have grown traditional tobacco plants, a small biotech firm has planted tobacco specially engineered to eliminate most nicotine. And tobacco research labs, like one at the University of California, are testing experimental cigarettes in hardcore smokers to see if gradually lowering nicotine helps them kick the habit.
The moves run counter to recent tobacco industry efforts that secretly boosted nicotine in cigarettes. . . .
Benowitz's aim is to reduce nicotine delivery to less than one-tenth of a milligram per cigarette, weaning smokers from the chemical responsible for their urge to light up.
A few years ago, Benowitz tested his theory in a pilot project involving 20 volunteer smokers who smoked at least 10 cigarettes per day and who had smoked at least a decade. . . .
The cigarettes, manufactured by Philip Morris USA for research purposes, look like Marlboros and contain the same levels of tar. . . .
"Three-quarters went back to their regular cigarettes," said Dr. Michael Siegel. "It was an unacceptable cigarette. People were not willing to smoke it."
That's the market peril faced by such companies as 22nd Century Ltd., a New York biotech that tinkered with tobacco to create plants that reduce nicotine levels to almost zero without raising levels of other harmful chemicals.
Taking constituents out of the process of combustion -- benzene and other things -- are, in fact, the greatest benefit that we can make to health.Senator Richard Burr, R-NC, who will soon introduce a bill that would lower the level of chemicals in cigarettes that are directly linked to cancer, instead of regulating nicotine levels.
If we get into that trap, we'll be debating this issue for another 200 years. What the industry doesn't want us talking about is nicotine. That's where the profits are. Gregory N. Connolly, a professor at the Harvard School of Public Health, on removing carcinogenic elements from cigarettes.
On March 3, The New Mexican published "Tobacco firm lobbied to defeat cigarette tax," regarding the Philip Morris (Altria) company's attempt to defeat a proposed increase in the state cigarette tax. Additionally, there is a proposed legislative effort to further restrict indoor smoking. There are solid and valid health benefits to these efforts.
As a former employee of Philip Morris USA and Liggett Vector Brands, I can testify that their interests lie only with their profitability. If anyone is under the illusion that these companies care that their products kill their consumers, think again.
A recent Florida Supreme Court decision in a high-profile case against the tobacco industry has left a multi-million-dollar jackpot in limbo.
At issue is a $709 million escrow account formed as part of a highly unusual side agreement struck in 2001 between the plaintiffs and three of the cigarette companies . . .
the three companies - Altria Group Inc.'s (MO) Philip Morris USA, Loews Corp.'s (LTR) Lorillard Tobacco Co. and Vector Group Ltd.'s (VGR) Liggett Tobacco Co. - were feeling vulnerable and agreed to place the millions in escrow to be used for the benefit of the class named in the case - win or lose.
In exchange, Stanley Rosenblatt, the attorney for the plaintiffs, agreed not to challenge a state bond cap that had been added to the state's books. The bond cap was critical because it allowed the cigarette companies to pursue their appeal of the massive judgment without fully securing it. . . .
But by breaking up the class, the Florida Supreme Court left many questions unanswered regarding how the funds in the escrow account should be dispersed.
The escrow agreement may have been made "null and void" by the decertification of the class, said Anthony Sebok, a professor at Brooklyn Law School. He said the unusual nature of the agreement makes it difficult to predict how a judge will rule on this matter.
A study by researchers at the Transdisciplinary Tobacco Use Research Center of the University of Pennsylvania School of Medicine found that many smokers make false inferences about the safety of new low nicotine Quest® cigarettes. This research appears in the March issue of Psychology of Addictive Behaviors.
“This study is the first to evaluate how regular smokers responded to a print ad for Quest cigarettes, a newly developed cigarette marketed as a way to gradually reduce nicotine exposure via smoking cigarettes that are lower in nicotine,” said author Caryn Lerman, PhD, Associate Director for Cancer Control and Population Science at the Abramson Cancer Center of the University of Pennsylvania, and Professor in Penn’s School of Medicine and the Annenberg Public Policy Center.
Quest® cigarettes are a brand of low-nicotine cigarettes manufactured by Vector Tobacco, Inc., and currently marketed in eight US states. Quest® cigarettes, both regular and menthol, are manufactured with three progressively lower nicotine levels and marketed as allowing smokers to “step-down” nicotine levels . . .
While Quest® cigarettes do offer reduced nicotine levels, they do not have progressively less tar and thus, still pose significant health risks. Given evidence that many smokers misinterpret the information contained in marketing campaigns for such “light” cigarettes it is important to understand how smokers perceive this newly marketed low nicotine cigarette.
Vector Group (NYSE: VGR), through its Liggett Vector Brands subsidiary, and Sunoco announced today that the companies have entered into a multi-year agreement under which Liggett Vector Brands will supply, and Sunoco will sell, Silver Eagle, a premium quality branded cigarette delivered at a value price. Silver Eagle, made in the USA exclusively for Sunoco, is currently available in more than 800 Sunoco APlus branded retail outlets. The Silver Eagle brand is available in all key menthol and non-menthol styles, including kings, 100's and box packs.
"We are delighted to launch Silver Eagle, the most recent addition to our 'Partner Brands' program, which has been established to meet the demands of today's challenging retail market," said Ronald J. Bernstein, President and Chief Executive Officer of Liggett Vector Brands. "The introduction of Silver Eagle allows us to expand our relationship with Sunoco, one of the premier gasoline/convenience store chains in the U.S. with over 4800 stores, and offer long-term price stability with the highest quality product."
Drew Kabakoff, Sunoco's National Category Manager for Tobacco, said, "Silver Eagle marks the beginning of an exciting new partnership between Sunoco and Liggett Vector Brands. Sunoco is committed to offering customers the best value cigarette proposition in the marketplace and with our partnership with Liggett Vector Brands, we will fulfill that commitment. We are thrilled about the Silver Eagle launch and are confident our consumers will be excited about the high quality and great value of Silver Eagle as well."
Silver Eagle marks the beginning of an exciting new partnership between Sunoco and Liggett Vector Brands. Sunoco is committed to offering customers the best value cigarette proposition in the marketplace and with our partnership with Liggett Vector Brands, we will fulfill that commitment. We are thrilled about the Silver Eagle launch and are confident our consumers will be excited about the high quality and great value of Silver Eagle as well.Drew Kabakoff, Sunoco's National Category Manager for Tobacco, on the company's partnership with Liggett Vector. Just what we need--a partnership between Oil and Tobacco.
Vector Group's foray into low-nicotine and no-nicotine "safer" cigarettes manufactured in North Carolina isn't exactly up in smoke, but the strategy is burning at a low ember.
The Miami holding company, which has its only manufacturing plant in Mebane, has postponed the national rollout of Quest, a much-ballyhooed brand produced out of tobacco stock developed at North Carolina State University.
Vector has suspended print advertising that was supporting a limited rollout of the product and taken non-cash writedowns on its nicotine-free product inventory.
The company's new hope is a long shot: that the U.S. Food and Drug Administration will approve Quest for sale as a product to help smokers kick the habit by stepping down their addiction. . . .
As for Quest, it continues to be marketed in eight Northeastern states and in Arizona but is promoted only with in-store advertising.
Cigarette-maker Vector Group Ltd. has filed a suit against the state of Kentucky for what it alleges are violations of the tobacco industry's landmark 1998 settlement by giving preferential treatment to another tobacco company.
Vector Group's cigarette-making subsidiaries, Liggett Group Inc. and Vector Tobacco Inc., are based in North Carolina. Liggett produces conventional cigarettes at its Mebane production plant. Vector Tobacco produces low- and no-nicotine cigarettes and is based in Research Triangle Park.
Joined by three other tobacco companies, Vector asked the court Thursday to void an agreement signed last year between Kentucky and Vibo Corp., a Miami cigarette company that does business as General Tobacco, that allowed General Tobacco to participate in the tobacco industry's settlement.
The Vector-led group is alleging that General Tobacco received unauthorized favorable financial terms in its agreement with the states, said Ronald Bernstein, Vec-tor's president and chief executive.
Cigarette-maker Vector Group Ltd. has filed a suit against the state of Kentucky for allegedly violating the tobacco industry's landmark 1998 settlement by giving preferential treatment to another tobacco company.
Joined by three other tobacco companies, Vector Thursday asked the court to void an agreement signed last year between Kentucky and Vibo Corp., a Miami cigarette company that does business as General Tobacco, that allowed General Tobacco to participate in the tobacco industry's settlement.
The Vector-led group is alleging that General Tobacco received unauthorized favorable financial terms in its agreement with the states, Vector President and Chief Executive Ronald Bernstein said.