Top companies point to diminishing sales
Jump to full article: The Arizona Republic, 2006-04-28
Author: Jon Kamman The Arizona Republic
Intro: As Americans kick the habit or smoke cheaper cigarettes, the reaction by major tobacco firms is proving hazardous to the financial health of 46 states, including Arizona.
For the first time since cigarette-makers agreed in 1998 to distribute billions of dollars a year to the states to compensate for the costly effects of tobacco use, Big Tobacco balked last week at paying the full amounts. The dispute puts in limbo at least $755 million the states expected to receive this year.
It also portends what could be protracted resistance by tobacco companies to paying huge compensation at a time when their sales and market share are eroding. The tobacco companies contend the states are allowing their competitors an unfair advantage.
Sixteen states have filed lawsuits in quick succession so far, seeking their full shares, and Arizona is moving toward filing its own, lawyers in the state Attorney General's Office said.
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