NATO Fights Tobacco Tax Hikes With PACT Act

This month, NATO launched a new strategy to fight state excise tax increases on tobacco in states where lawmakers are proposing to raise cigarette and tobacco product tax rates.

The strategy focuses on educating lawmakers about the pending tax windfall that all 50 states will receive due to the passage of the federal Prevent All Cigarette Trafficking Act (PACT Act), NATO stated.

Under the PACT Act, Internet sellers are required to collect cigarette/smokeless taxes plus sales taxes, and remit them to states. In addition, the PACT Act prohibits the delivery of these tobacco products through the U.S. Mail. These regulations will significantly reduce Internet sales, NATO stated. Without the Internet's low-priced tobacco, consumers will revert to buying products at local stores -- resulting in the tax windfall to states, according to NATO.

Currently, states are losing an estimated $1.4 billion a year in state excise taxes and sales taxes on cigarettes and smokeless tobacco products sold over the Internet.

As part of NATO's new campaign to fight state tax increases, the association is sending lawmakers in select states a letter informing them of the estimated size of the tax windfall that their respective state may expect to receive as a result of the PACT Act. In some cases, NATO believes the size of the expected tax windfall is estimated to be more than the additional revenue the state might collect if the cigarette and/or smokeless tobacco rates were increased. Elsewhere, the estimated tax windfall may allow lawmakers to reduce the amount of any proposed tax increase, NATO stated.

NATO has sent letters to lawmakers in Kansas ($.55 per pack cigarette tax increase and OTP tax increase from 10 percent to 40 percent); Minnesota (taxing little cigars as cigarettes); New Hampshire (20-cent per pack cigarette tax increase); New York ($1 per pack cigarette tax increase); and South Carolina (50-cent per pack cigarette tax increase).

In other NATO news, the company received a wave of exhibitor commitments to the 2011 NATO Show, being held April 12-14, 2011, at the Rio Hotel in Las Vegas.

The latest exhibitors to sign up for the NATO Show include:

-- A&T Tobacco Imports
-- Bags of Bags
-- Bahama Mama Cigars
-- Beach Cigar Group Inc./Gurhka Cigars
-- Cheyenne International
-- DWC Enterprises
-- Global Tobacco
-- Great Midwest Tube & RYO Machines
-- International Tobacco Partners
-- Liaison Sales and Marketing
-- M & R Holdings
-- National Honey Almond
-- Rouseco
-- Tantus Tobacco

"Having a great trade show means that retailers find value in attending, and the retailers are telling manufacturers and distributors, this is the show to attend. When that happens, companies can't wait to sign up," Jim Colucci, senior vice president of sales and marketing for Altadis USA and a member of the NATO Trade Show Committee, said in a statement. "Also, these companies realize NATO has put more resources into fighting legislative battles than ever before, and helping support the trade show means more resources to fight anti-tobacco legislation. That's a big point of difference between NATO and other shows which will not be using the proceeds to fight tobacco-related legislation."

Other tobacco companies that have committed to exhibiting include:

-- Nat Sherman
-- New Image Global
-- Smokey Mountain Chew
-- Zander-Greg
-- K. K. International Corp.
-- Arango Cigar Co.
-- Carolina Tobacco
-- Dom Rey Cigar Inc./Cusano Cigars
-- Drew Estate
-- Harold Levinson Associates
-- House of Oxford
-- King Maker Marketing
-- Renegade Tobacco/House of Windsor
-- Smoker Friendly Intl.
-- U.S. Flue-Cured Tobacco Growers
-- Zippo Lighter Co.
-- Altadis USA
-- Swisher International
-- Swedish Match
-- Republic Tobacco
-- National Tobacco Co.

Freedom Smokeless Electronic Cigarette Sales Are Smoke ‘N

Freedom Smokeless announced today that they are now selling their premium brand electronic cigarettes via the internet. Previously, Freedom was sold exclusively through retail outlets. Glenn Kassel, Freedom’s President and Co-founder said, “The response that we have received from our retail customers has been overwhelming and selling on the internet was a natural progression for our Company to make.” Freedom put over a year into the research, design and development of their product. Their two-piece electronic cigarettes are tobacco-free, ash and smoke-free and do not produce second hand smoke. Mike Lewis, Freedom’s CEO said, “As a smoker myself, I am very sensitive to the needs of our customers. We have a custom designed, technologically advanced delivery system that inhales and exhales a “smoke like” water vapor exactly like a tobacco cigarette without flame, smell or all of the carcinogens contained found in tobacco.”

Freedom has partnered with Digital Brand Group (DBG) to launch and sustain this campaign. Jeremiah Jacks, CEO of DBG said, “I am pleased to partner with Freedom. Their emphasis on quality and unparalleled customer support mirrors that of DBG. We look forward to dominating the market together!” The campaign will include aggressive affiliate marketing, both domestically and internationally.

Freedom has a starter kit that consists of a lithium ion battery, USB charger, AC wall adapter and a 4-pack of atomizers. Customers have the option to upgrade to either a deluxe kit that includes a second battery (either in white, black or chrome) or the platinum kit that also adds a carry case and extra pack of atomizers. To help the launch, all customers that order will receive a free car charger. The battery, carry case and chargers all carry the distinct Freedom logo. The atomizers are available in two flavors (tobacco and menthol) and four nicotine strengths-high, medium, low and zero. About Freedom Smokeless

Founded in 2008, Freedom proudly assembles their electronic cigarette products in the United States. Striving for technological excellence, Freedom has invested heavily into R & D and has produced an electronic cigarette that has proven to be the most reliable and satisfying experience in the market today. The products are designed to provide a fresh alternative to traditional tobacco for the smoker.

About Digital Brand Group

Digital Brand Group is one of the leading digital business companies for emerging small and middle-market companies. DBG's proven business and technology integration expertise spans across multiple industries that include (but is not limited to): manufacturing, real-estate, apparel, food & beverage, health & beauty care, transportation, automotive, government, educational institutions and non-profit organizations. DBG's International team also offers a specialized competency in culturally-oriented / family-owned businesses.

Gates Foundation cuts funding linked to tobacco companies

Some people may wonder why a board member for a unit of one of the world’s largest tobacco companies would plan a campaign for tobacco control in Africa. Bill and Melinda Gates certainly thought it seemed like a conflict of interest.

The Bill & Melinda Gates Foundation withdrew a $5.2 million grant to the International Development Research Center for planned tobacco control work in Africa after learning that chairwoman Barbara J. McDougall has served as a Director of Imperial Tobacco Canada.

The New York Times reports that McDougall’s affiliation with the tobacco company had not been included on news releases about her appointment to the research center. Anti-tobacco activists revealed her industry connection last month.

The Gates said, "We are deeply disappointed by this revelation and feel this conflict is unacceptable as we work to support meaningful tobacco control programs in Africa."

Officials for the research center say they are disappointed, but they understand and respect the Gates’ decision. So do members of the African Tobacco Control Alliance.

Rachel Kitonyo, chairwoman of the African Tobacco Control Alliance, praised the decision. She believes McDougall’s participation would have threatened the integrity of the program as the tobacco industry "seeks to avoid, delay, dilute and defeat laws and policies designed to reduce tobacco use" around the world.

While the Gates will no longer be funding the International Development Research Center on this project, the foundation will continue its work on tobacco control and hopes to partner with other institutions to reduce tobacco use in Africa.

In Africa, tobacco use is more than a health problem – it is also a developmental problem. According to the World Health Organization, money spent on tobacco limits the funds put toward essentials like education, food and medicine.

Notably, the Gates Foundation provided the WHO with $10 million last year for tobacco control in Africa.