From July 1 through Sept. 30, Altria Group Inc., Philip Morris USA Inc., R.J. Reynolds Tobacco Co. and ITG Brands LLC will be using a third-party vendor to install one, two or three corrective statement signs in each retail store across the United States that has a manufacturer retail cigarette promotion program.
The placement of corrective statement signs in retail stores is due to a lawsuit settlement agreement reached between these manufacturers and the federal government. The settlement agreement required the manufacturers to amend their retail cigarette program agreements to require the placement of corrective statement signs in retail stores. A total of 17 different corrective statement signs will be printed, each with a different health-related statement. A store that does not have a retail promotional contract with any of the manufacturers is not required to display corrective statement signs.
There are various requirements for corrective statement sign placement depending on the kind of store:
- For regular stores that are not a kiosk-style store, one 348-square-inch corrective statement sign will be displayed. The sign will be either square or rectangular in shape (examples pictured above). The sign will need to be displayed above the main cigarette display, adjacent to the main cigarette display, within 48 inches of either the main store entrance or the cash register, or perpendicular to a main cigarette display.
- For non-kiosk retail stores that have more than 9 feet of horizontal linear visible display space devoted to the manufacturers’ cigarette brands, a second 348-square-inch corrective-statement sign will be displayed.
- For non-kiosk retail stores that have cigarette advertisements displayed elsewhere in the store other than on the main cigarette display (and excluding signage that only identifies the brand, price or has a picture of a pack of cigarettes), an additional 144-square-inch corrective statement sign will be displayed within 48 inches of the main store entrance.
- For kiosk-style stores, which are stores that do not allow customers to enter, have a selling window between the customer and store personnel, or are no larger than 325 square feet in area, not including restrooms, one 144-square-inch sign will need to be displayed near the transaction window or the cash register.
Each retailer that is required to have one, two or three corrective statement signs must keep the signage continuously displayed through June 30, 2025. Photos of the signs as placed in all stores will be uploaded to a database to confirm a store’s compliance with the settlement agreement. Then, on July 1, 2025, the terms of the settlement agreement will have been fulfilled and the corrective statement signage will be removed from retail stores.
If a retailer complies with the terms of the settlement agreement by displaying the required signs, the retailer will not incur any non-compliance penalties. If a retailer does not fully comply with the sign display requirements, then a retailer may incur various consequences or penalties depending on the kind of non-compliance.
“Minor non-compliance” includes obstructing a portion of a sign (other than the smoking/health-related statement) or displaying a sign incorrectly (as long as it remains visible to consumers). Minor non-compliance would result first in counseling by the manufacturers on the proper sign-display requirements and, if not corrected, could lead to a warning letter and the retailer being required to display an additional 144-square-inch sign in the non-compliant store for 120 days.
“Major non-compliance” includes not posting a sign, obstructing or displaying a sign so that the message is not visible, damaging or removing a sign or failing to rotate a sign. The penalties for major non-compliance progressively increase based on the number of violations beginning with counseling by the manufacturers to displaying an additional 144-square-inch sign corrective-statement sign through June 30, 2025, to paying back to each manufacturer that the retailer has a retail marketing promotion contract with a financial penalty equivalent to the retailer’s price-promotion discounts for a period of four weeks or 13 weeks to being suspended from each manufacturer’s retail promotion program for 17 weeks.
Thomas A. Briant is the executive director of NATO, a tobacco retailing association based in Lakeville, Minnesota. Reach him at email@example.com.
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