Tobacco

RJR Nixes Flavored Cigs

Settles with 38 state attorneys general

ALBANY, N.Y. -- New York Attorney General Eliot Spitzer has announced that R.J. Reynolds Tobacco Co. and the attorneys general of 38 states have entered into a settlement that ends the sale of candy-, fruit- and alcohol-flavored cigarettes manufactured and sold by the company.

Under the settlement, Reynolds agreed to a ban in the United States of its Camel, Kool and Salem flavored cigarettes. The agreement also imposes significant restrictions to prevent RJR from marketing a flavored cigarette to youth in the future.

The following [image-nocss] restrictions apply to any cigarettes manufactured by RJR in the future that have a characterizing flavor other than tobacco or menthol:

The name of the cigarette may not be that of a candy, a fruit or an alcoholic beverage, and may not include any of a number of specified terms that evoke imagery of candy, fruit or alcoholic beverages. RJR may not use print advertising, point-of-sale (POS) materials, exterior packaging, or non-age verified direct mail or internet advertising that contain names of a candy, a fruit or an alcoholic beverage; any of a number of specified terms that evoke imagery of candy, fruit or alcoholic beverages; or imagery of candy, fruit, sweet desserts or alcoholic beverages. RJR may not distribute scented promotional materials, such as "Lift and Sniffs" or "Scratch and Sniffs."

The states had asserted that RJR was violating the 1998 tobacco Master Settlement Agreement's prohibition on youth targeting through its advertising, marketing and promotion of its flavored cigarettes.

The evidence that led the states to conclude that RJR was targeting youth included use of candy, fruit and alcohol flavors with high youth appeal; use of advertising and packaging with graphics, typography, colors, styles and themes that were enticing to youth; and use of "Scratch and Sniff" and "Lift and Sniff" promotional cards scented with sweet, candy aromas, but with none of the scent of tobacco, the AGs said.

The brand styles of flavored cigarettes sold by RJR that are banned by the agreement are Camel Exotic Blends: Mandarin Mint, Dark Mint, Crema, Izmir Stinger, Twist, Cinnzabar, Mandalay Lime, Aegean Spice, Bayou Blast, Beach Breezer, Margarita Mixer, Midnight Madness, Back Alley Blend, Kauai Kolada, Twista Lime, Winter MochaMint, Warm Winter Toffee, Blackjack Gin, Screwdriver Slots and SnakeEyes Scotch; Salem Silver: Dark Currents, Fire & Ice, Deep Freeze and Cool Myst; and Kool Smooth Fusions: Mintrigue, Mocha Taboo, Midnight Berry and Caribbean Chill.

Joining Attorney General Spitzer in today's settlement are the AGs of Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming. The Commonwealth of the Northern Marianas also joined in the agreement.

"This agreement codifies R.J. Reynolds' practice for some time of not using language describing fruit or candy flavors in magazine and newspaper advertising or point-of-sale communications in non-age-restricted venues," said Lynn J. Beasley, Winston-Salem, N.C.-based RJR's president and COO.

In addition to the conditions of the agreement, which are specific to the company's specialty blends, RJR said it will voluntarily extend comparable guidelines to all of its brands.

"We believe that this agreement and our new policy is responsible, appropriate and resolves the issues that have been of concern," Beasley said.

Under the agreement, RJR said, other than in adult-only venues and communications, RJR's specialty blends will not use the name of a fruit, candy or alcoholic beverage in the future naming of its cigarette brand styles. The company further agreed to limit its use of fruit, candy and alcoholic beverage names and images in a variety of non age-restricted marketing communications.

Most of RJR's specialty flavored cigarettes were marketed as part of the Camel Exotic Blend family of styles, which were originally introduced in 1999 as a super-premium priced product. In total, these styles represented less than 1/10th of 1% of the company's annual cigarette volume. In May, it ceased manufacturing the last three of its remaining Camel Exotic Blends.

"We recognize that the past use of certain names on a limited number of our brand styles resulted in unintended perceptions and concerns. Today's agreement is the appropriate step in resolving these perceptions and this issue," Beasley said.

R.J. Reynolds Tobacco Company, an indirect subsidiary of Reynolds American Inc., makes Camel, Kool, Winston, Salem and Doral cigarettes.

Click here to view the settlement, andclick here to view Appendix A.

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