FAIRFAX, Va. -- The American Wholesale Marketers Association (AWMA) and the National Association of Tobacco Outlets (NATO) issued a joint letter late last week to all 435 U.S. representatives explaining serious concerns both national organizations have with the pending bill in Congress to grant the U.S. Food & Drug Administration (FDA) authority to regulate tobacco products.
The two groups' collective memberships are comprised of tobacco wholesalers, tobacco stores and other retailers—including convenience stores—that sell tobacco products.
"While a number of companies [image-nocss] and organizations have recently changed their positions and decided to support this bill, we remain vigorously opposed to it," said AWMA president Scott Ramminger. He noted that AWMA members will be taking this message directly to their elected officials on May 7-8 when they are in Washington, D.C., for the annual AWMA Day on the Hill program.
As national wholesale and retail trade organizations representing thousands of family-owned businesses in all 50 states, AWMA and NATO remain firmly opposed to H.R. 1108, which they said would grant the FDA overly broad and sweeping powers to regulate the manufacturer, distribution, promotion and sale of tobacco products.
AWMA and NATO have serious concerns regarding the unprecedented authority that Congress seeks to bestow upon the FDA to regulate virtually every aspect of the tobacco industry, they said. One of their main concerns with H.R. 1108 is that the FDA will be granted "sweeping, virtually unlimited power to adopt future regulations which will severely impact the wholesale and retail industries we represent," they said.
The scope of the regulatory authority being granted in Section 906(d)(1) of H.R. 1108 to the FDA would allow the agency to adopt restrictions or regulations involving tobacco products based solely on public health concerns with no statutory obligation to take into account the negative impact on the thousands of small businesses that sell tobacco products, NATA and AWMA said. The FDA would not be required to consider the financial hardships that wholesale distributors and retailers would suffer from the loss of product promotional compensation and complying with onerous recordkeeping and reporting requirements, nor the out-of-pocket costs they would incur from remodeling store displays and checkout areas to conform to new regulations, they added.
A second major concern, the groups stated in the letter, is over the powers granted to the FDA, other federal agencies, states, counties and cities that could ultimately lead to the prohibition of tobacco products. It is conceivable that when drafting regulations, the FDA could adopt such onerous restrictions on the distribution, promotion, advertising and sale of tobacco products that wholesalers and retailers would be unable to comply with such regulations and that these businesses would be forced to discontinue offering tobacco products to American consumers.
"Only Congress should have the authority to ban the sale, distribution, advertising, promotion, possession and use of legal tobacco products, which would pre-empt federal agencies, states, counties or cities from ushering in a new era of prohibition," they said.
A third concern is that the measure would assess billions of dollars in new "user fees" to support an entirely new bureaucracy—the Center for Tobacco Products—within the FDA to regulate tobacco products. According to the Manager's Amendment to H.R. 1108 adopted by the U.S. House Energy & Commerce Committee on April 2, the user fees would amount to $5.47 billion from fiscal 2008 through fiscal 2018 plus another $712 million each subsequent year. Given the amount of the user fees and the use of the revenue to fund the Center for Tobacco Products, the fees would more appropriately be labeled a new tax that would be borne by consumers in the form of higher prices for tobacco products, said AWMA and NATO.
H.R. 1108 is a complex piece of legislation that creates a new federal bureaucracy to enact onerous regulations that will likely place hundreds of wholesalers and thousands of retail stores in jeopardy of going out of business with the consequent laying off of untold millions of employees, they said. "Given the very real potential for H.R. 1108 to severely impact the wholesale and retail industries, AWMA and NATO oppose the bill and ask members of Congress to consider our concerns when the bill comes before the full House of Representatives."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.