Tobacco.org

Ruling on Tobacco Settlement Payments Expected 

Billions in future tobacco settlement payments to the states are at stake in an expected ruling today. An independent economic firm, the Brattle Group, is scheduled to rule on a dispute brought by major tobacco companies.

The companies have argued that annual payments to 46 states resulting from the 1998 tobacco Â"Master Settlement AgreementÂ" should be reduced because the majors have lost market share to smaller competitors.

The feud between big tobacco companies and state attorneys general draws attention to the corrupt, inner workings of the $240 billion tobacco deal. In exchange for receiving billions of dollars in annual payments from the four major tobacco companies, states agreed to pass laws to protect the majors from competition. However, despite imposing burdensome and unwarranted escrow payments on small companies that were never part of the settlement agreement, some upstarts were nonetheless able to win consumers by offering lower-price cigarettes.

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