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- World mourns Nelson Mandela and celebrates his life; burial set for Dec. 15
- Bill O’Reilly reminds: Nelson Mandela ‘was a communist’
- John Boehner says GOP should support gay candidates: ‘I do’
- Grass-Whopper: Pan-fried cricket burgers go over big in New York City
- CDC sees measles spike and ‘failure to vaccinate’
Big Tobacco rolls on
Now, in the 10 states where S&M; does business, profits are stagnating.
Meanwhile, Philip Morris USA is doing well. In the first quarter of this year, the nation’s largest cigarette maker saw its domestic market share grow to 50 percent, from 48.3 percent two years earlier.
The new escrow laws also provided opportunities for companies such as Liggett Group Inc. and Commonwealth Brands Inc., which joined the settlement under favorable terms that let them pay an average of less than $2 per carton in 2003, rather than $4.
The settlement has put the states in the awkward position of working with large tobacco interests.
For more than six years, the agreement looked bulletproof — but that might be changing.
On April 15, Liggett, Commonwealth and other companies withheld about $100 million, reducing this year’s total settlement payment to $6.3 billion. They cited a little-known clause in the agreement that allows reduced payments if the states do nothing while the little guys grab sales.
There is also the possibility that large companies could start withholding large sums. Industry leaders told states last month that they want a review of past payments because of increased competition, according to letters obtained by the Associated Press.
The companies could withhold as much as $1.2 billion next year, said Richard Larkin, an analyst with J.B. Hanauer & Co.
Nonparticipating manufacturers also have filed federal lawsuits over the escrow laws and other issues in at least five states — Kentucky, Oklahoma, Tennessee, New York and Arkansas.
The small tobacco companies have won few fights, but last year, a federal appeals court revived an antitrust challenge in New York and a district judge issued a preliminary injunction against the state’s enforcement of the escrow law.
Iowa Attorney General Tom Miller said the settlement still makes most companies pay, which increases prices and reduces cigarette consumption.
“If there’s less smoking and we’re paid less money, that’s the best money we never got,” Mr. Miller said.
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Independent voices from the The Washington Times Communities
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