WASHINGTON -- The House Committee on Energy & Commerce last week completed a markup of legislation that would grant the Food & Drug Administration (FDA) the authority to regulate tobacco products. As reported in CSP Daily News, the committee approved the bill, the Family Smoking Prevention & Tobacco Control Act (H.R. 1108), by a vote of 38 to 12. Industry efforts to reduce the effect of any such legislation on retailers have met with some success.
On April 1, after working with House committee members to include provisions that address retailer concerns, the National Association [image-nocss] of Convenience Stores (NACS) withdrew its opposition to H.R. 1108. NACS had opposed it and similar legislation for many years because of concerns over how the bill proposed to regulate the retail sale of tobacco.
"The current version of the legislation addresses all the concerns we had raised 18 months ago," NACS senior vice president of government relations Lyle Beckwith said in a statement last week. "We will not oppose this House bill as presently crafted," he said.
The association said Friday that through successful negotiation with the committee leadership, it was able to have the bill modified to protect retailers. While still opposed to the overarching idea of having the federal government regulate tobacco sales, NACS determined that it was in the best interest of retailers to work to change the bill. H.R. 1108 has 221 cosponsors in the House and it will be easily passed, it said, especially given the coming elections and the current makeup of Congress.
According to NACS, the "notable wins" for retailers included in the House legislation are:
Creating a level playing field by applying the bill's provisions to all tobacco retailers. Granting procedural safeguards to ensure a fair regulatory process. Providing incentives for retailers to adopt good compliance and training practices. Protecting against the imposition of double fines for the same conduct. Setting fair boundaries for retailer liability.It is because of these changes that NACS was able to withdraw its opposition to the bill before it was marked up in committee, it said. H.R. 1108 will likely be brought up for a vote on the House floor in the near future. NACS still opposes the Senate version of the bill, S. 625, until the above changes are incorporated, it added.
In the most recent NATO E-News bulletin, Tom Briant, executive director of the National Association of Tobacco Outlets, offered some details on the "Manager's Amendment" that was adopted, and which added some new retail and manufacturer provisions.
The Manager's Amendment includes the following new regulations impacting tobacco retailers:
Directs the FDA to enforce the retail sales regulations on Indian Tribes. Requires the FDA to issue regulations within 18 months of the legislation being enacted into law to require age verification for sales of tobacco products that do not occur in a face-to-face transaction to prevent minors from obtaining access to tobacco. This regulation is intended to focus on Internet and mail order sales. Requires the FDA to issue regulations within 24 months of the legislation being enacted into law to protect minors from the promotion and marketing of tobacco products that are sold through means other than a face-to-face transaction. Requires the FDA to consider steps taken by a retailer to prevent tobacco sales to minors when determining whether to modify or terminate a "no-tobacco sale order" (a no-tobacco sale order would be issued by the FDA to prohibit a retailer from selling tobacco products). Directs the FDA to consider any penalties or fines a retailer paid to a state in determining the amount of a FDA federal penalty for the same violation.Briant said that NATO has continued to oppose retail provisions of the FDA bill because of the "broad and sweeping" regulatory powers over the retail sale of tobacco products. Even with the amendments, there are other retail provisions that NATO will continue to try and change as the bill moves to the full U.S. House, he said.
According to NATO, the provisions that need to be amended include:
The ban on color advertising in retail stores and the requirement that tobacco products only be advertised with brand names in black letters on a white background. This ban is contrary to the federal constitutional protection of commercial speech (i.e., advertising) and needs to be amended or removed from the bill. Section 917 of the bill allows federal agencies (other than the FDA), states, counties and cities to ban the sale, distribution, advertising, promotion, possession and use of tobacco products. While states may have an implied power to ban tobacco products, this would be the first time that such a broad power is specifically written into or codified in federal law. NATO is working to change this provision so that only Congress has the authority to ban the sale, distribution, advertising, promotion, possession and use of tobacco products.Filippe Goossens, a research analyst with Credit Suisse, said the committee vote was "still a long way from actual regulation. Before the bill would become actual law, both chambers of Congress would have to pass a floor vote on their respective versions, potentially develop a compromise bill in conference, and then send the bill to the White House."
He said that FDA commissioner Andrew von Eschenbach currently opposes the regulation because he does not believe that the FDA is the appropriate agency to oversee the tobacco industry. Goossens speculated that President Bush would veto it, and that Congress would not be able to override the veto.
"We do not believe that FDA regulation will become a reality in 2008," he said in his research note. "But we feel comfortable with the notion that in 2009 (and definitely no later than 2010) the industry will have to deal with increased regulatory oversight."
He added that while he believes more tobacco advertising and labeling restrictions are inevitable, the largest impact on the tobacco industry could come from the requirement to have new product development pre-approved. "This way, the FDA could stymie innovation before consumers get to decide if there would be demand for a product, potentially making it more difficult for tobacco companies to slow down consumption decline with new product introductions," he said.
Also, "while the bill allows for differentiated health claims based on scientific evidence, it does not describe the nature of the evidence, leaving some observers skeptical that any evidence will ever pass the vague requirements described in the bill."
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