Tobacco’s Year in Review

NATO underscores 12 months of taxes, restrictions and regulatory actions

MINNEAPOLIS -- As the year end approaches, 2012 can be described as the year in which only a few states enacted higher cigarette and OTP taxes, numerous cities and counties considered adopting local restrictions on tobacco products, and the FDA continued its regulatory actions. Below is a list from the National Association of Tobacco Outlets of the major efforts and issues that NATO worked on during 2012.

NATO Local Project: NATO responded to more than 50 local tobacco restrictions and ordinances in California, Florida, Illinois, Massachusetts, Nebraska, New York, Pennsylvania and Rhode Island.  As a result of NATO’s involvement in these local ordinances, 66% of the proposed regulations and restrictions were either not adopted or amended to be less burdensome and less restrictive.

Advertising Ban Stuck Down: With NATO as the lead plaintiff in a lawsuit against the City of Worcester, Mass., a federal district court judge struck down the city’s tobacco advertising ban ordinance that would have prohibited outdoor tobacco advertisements and in-store tobacco advertisements that could be seen from a public street, park or school.

Flavor Ban and Coupon/Promotion Ban: NATO and other plaintiffs sued Providence, R.I., seeking to overturn an ordinance that banned the sale of certain flavored tobacco products and a second ordinance that prohibited tobacco-coupon redemption and restricted multi-pack tobacco promotional pricing and discounts. A federal district court judge recently issued a decision upholding the ordinances.

State Tobacco Legislation: Of the 23 states that proposed increasing cigarette and/or OTP tax rates, three states passed tobacco-related tax increases. The states enacting higher tax rates include Illinois (increased the cigarette tax by $1/pack, raised OTP to 36% and taxed moist snuff at 30 cents/ounce); Maryland (raised cigar tax to 70%, except on premium cigars, and increased OTP to 30%); and Rhode Island (increased cigarette tax by 4 cents/pack).

Membership Growth: NATO retail membership continued to expand with about 25,000 tobacco stores, convenience stores, service stations, grocery stores and liquor stores now NATO members.

Public Relations: NATO expanded its public relations activity this year by sending commentary letters-to-the-editor opposing either tobacco tax increases or local tobacco ordinances to newspapers in Alabama, Illinois, Miami-Dade County (Florida), Nebraska, New Jersey, New Hampshire, Virginia and Worcester (Massachusetts). A nationwide press release was also issued supporting an investigation undertaken by Congress of the improper use of federal stimulus grant funds by local governments to lobby for passage of tobacco-related restrictions.

Meeting with FDA: NATO staff met with Center for Tobacco Products representatives in June to discuss self-service displays in age-restricted tobacco stores, retail training standards and the FDA’s proposed “Potential Tobacco Product Violations Report” form.

FDA Places Time of Compliance Inspections on Notices: At NATO’s recommendation, the FDA has begun including the time that a FDA retail compliance inspection takes place at a retail store on notices and warning letters subsequently sent to a retailer, which assists in determining the employee(s) working at the time of the inspection.

FDA’s “Potential Tobacco Product Violations Report” Form: NATO coordinated two rounds of comments from association members opposing the FDA’s proposal to allow the public to report a potential violation of federal tobacco regulations. The federal Office of Management and Budget subsequently approved the FDA’s use of the “Potential Tobacco Product Violation” form.

NATO Show 2012: The NATO Show was held in April 2012, and the entire exhibit hall at the Paris Hotel in Las Vegas was sold out, providing retail attendees numerous exhibitors to visit and see the latest in tobacco products and related accessories. The 2013 NATO Show will be held April 22-24 in Las Vegas. Click here for more information.