Altria Group Inc (NYSE:MO) and Reynolds American Inc (NYSE:RAI) have raised the prices of their cigarette packs by six cents. This is the first round of price hikes implemented this year. The tobacco companies raised the prices of cigarettes twice last year, the second of which was in December 2011.
The move is yet to be matched by Lorillard, which has decided to let the prices remain unchanged for now. The six cents hike works out to be an increase of 1.5% for Marlboro, which represents 87% of Altria’s volume.
The excise taxes have been relatively stable of late so an increase in the retail prices will boost the profitability of tobacco companies. Price hikes are likely to continue in the future as well.
Cigarette volumes have been declining as more consumers are aware of the repercussions of cigarette consumption.
Hence, tobacco companies have resorted to raising their product prices periodically in order to maintain profitability. This is possible because cigarettes are known to exhibit low negative elasticity (i.e. a large price hike causes cigarette consumption to fall only slightly).
четверг, 21 июня 2012 г.
On Friday, June 8, at 12:55 p.m. officers of the Santa Monica Police Department went to the 1800 block of 17th Street in response to an assault report. When the officers arrived, they were presented with the sight of a man who was banging on the door of a residence that he had apparently been locked out of. This man was cursing and vigorously demanding to be allowed into the residence.
The officers spoke with this man and quickly deduced that he was highly intoxicated. The officers then spoke with the reporting party, who told them that she had allowed this man to stay at her residence on occasion, but this time she had asked him to leave after he responded to her enquiry to him about the whereabouts of her cigarettes by pushing her.
This woman told the officers that she was not, however, seeking a prosecution. The officers then informed this man that he was going to be arrested anyway for public intoxication, at which point he began resisting their efforts to carry out said arrest. The officers then took this man down to the ground and applied their handcuffs to him.
They then carried him to their police vehicle and put him in the back. This 28-year-old Santa Monica resident was charged with public intoxication, resisting arrest, and a pair of outstanding warrants.
A newsagent from Tyneside has lent his support to a campaign aiming to make cigarettes less appealing to children. The ‘Plain Packs Protect’ campaign is pushing for cigarettes to be sold in plain, standardised packaging.
It's backed by organisations including FRESH, the British Heart Foundation, and Cancer Research UK. John McClurey has run a newsagent in Newcastle for 30 years and says the introduction of plain packets will reduce the appeal of eye-catching brands.
Manpower and Transmigration Minister Muhaimin Iskandar called on Wednesday for a delay in implementation of the tobacco impact control bill, which would mandate pictorial health warnings on cigarette packaging and no-smoking zones. The minister said some 500,000 people stand to suffer job losses if the new law passes, and said the law failed to account for the interests of tobacco farmers and clove cigarette businessmen. Muhaimin said he heard multiple complaints from tobacco farmers on a recent visit to Pamekasan, East Java.
“They are worried they will lose their livelihood,” he said. “They want delay of regulation passage.” Agung Laksono, the coordinating minister for people’s welfare, said recently that the regulation introducing mandatory graphic pictorial warnings on cigarette packs could be implemented by the end of June. The pictures will also be coupled with further restrictions on tobacco advertisement and sales. Agung added that the new law could be signed by President Susilo Bambang Yudhoyono “this month or in July.”
Muhaimin said that he would be ready to mediate a dialogue between tobacco farmers, the cigarette industry and the Ministries of Health and People’s Welfare, and said the cigarette industry has contributed significantly to state revenues. But Tulus Abadi, manager of the Indonesian Consumer Protection Foundation (YLKI), criticized Muhaimin’s assertions. “He is obviously defending the interests of cigarette industry instead of protecting people,” Tulus said, adding that Muhaimin’s claim that people would lose their livelihood was irrational. “The regulation stipulates pictorial warnings and cigarette-free zones,” he said.
“There is nothing in the regulation banning people from smoking or prohibiting the industry from [cigarette] production. It is nonsense.” While Muhaimin asked for a delay, Tulus said instead that the regulation should be passed immediately. “The health law mandating the regulation should have been passed in 2010,” he said. “Delaying it again means the government is violating the law.” Health Ministry data shows that seven percent of teenagers were smoking in 1995, with the figure soaring to 19 percent in 2010.
Professor Tjandra Yoga Aditama, the ministry’s director-general for disease control and environmental health, said many low-income people were smokers, and the amount they spent on cigarettes exceeded the Rp 100,000 ($11) monthly aid they receive from government. A University of Indonesia Demographic Institute (LDUI) study in 2009 showed that 57 percent of the poorest households in the country spent a significant part of their income on cigarettes.
From large hand-rolled cigars and smaller machine-made cigars to little cigars that are similar in size to cigarettes, there are nearly as many cigars as there are aficionados to enjoy them. And as federal regulators weigh standards for the entire industry, some in the cigar world are pushing to make sure their livelihoods and the products they enjoy don't go up in smoke. While the Food and Drug Administration has expressed its intention to regulate cigars under a 2009 law that gave it authority over the tobacco industry, it has yet to specify what's ahead as it ramps up efforts to curb the death and disease caused by tobacco.
If it's anything like the FDA's regulation of cigarettes and smokeless tobacco, that could mean banning certain flavors, requiring new health warnings, limiting the sizes and shapes of cigars, or imposing restrictions for marketing, advertising and retail sales. Cigars also may be restricted from being sold separately and the agency also could limit the amount of nicotine in the products. The premium cigar industry argues any number of the potential restrictions could hurt both cigar makers and specialty tobacco stores, whose products make up only a small fraction of tobacco sales, don't pose the same concerns as cigarettes, and the range of sizes and shapes of cigars makes across-the-board standards almost impossible.
Even the House Appropriations Committee weighed in on issue in its report on the fiscal year 2013 Agriculture Appropriations bill on Tuesday, reminding the FDA that "premium cigars have unique characteristics and cost prohibitive price points and are not marketed to kids. Any effort to regulate cigars should take these items into consideration." "If you're going to focus your efforts on regulating tobacco products to meet the spirit and intent of the Tobacco Control Act, where is best to spend those scarce resources — on a tenth of a percent of the market or on a huge chunk of the market?" asked Bill Spann, CEO of the International Premium Cigar & Pipe Retailers Association, an industry group representing more than 2,000 tobacco retailers and more than 350 cigar manufacturers, distributors and others.
According to the latest federal data, there are about 13.3 million cigar smokers in the U.S., far less than the 45.3 million U.S. cigarette smokers. U.S. tobacco sales topped $107 billion in 2011, but only 7 percent, or $7.77 billion, consisted of cigars, according to statistics from Euromonitor International. And of the 7 billion cigars sold annually, only about 250 million of them qualify as premium, handmade cigars that range in price from $6 to $30 and are — as far as Spann is concerned — akin to fine wines and craft beer. While Spann recognizes the need for tobacco regulation, he believes smoking premium cigars is a hobby, not a habit, and they aren't marketed or sold to children.
"You don't have a middle-schooler or high-schooler standing on the corner with a $15 Davidoff (a brand of cigar) sticking out of their mouth," Spann said. Possible restrictions to premium cigars have been a topic of conversation at any one of Craig Cass' specialty tobacco shops in North Carolina and South Carolina, where smokers often make use of lounge areas to smoke and chat. "They're worried about losing the artisan nature of our products, where every time they come in there's something new to select from," Cass said, adding that customers aren't just coming in to "grab their smokes," they are looking for a particular cigar to suit their mood or the situation.
If regulations force cigar makers to conform their products, that could limit the number of cigars available for aficionados to choose from the store's large, walk-in humidors. "All of that range of flavor is very unique to every single box in the humidor," Cass said. "If we were like the other category of tobacco like a cigarette, you could walk in the humidor and have 10 boxes of cigars in there. ... We have 700." Cass' interaction with customers could also change under federal regulations, putting the cigars behind the counter rather than in a humidor where customers can smell, touch and see a variety of cigars. In Canada, for example, cigar shops now have binders with a list of available cigars that customers can point to on a piece of paper.
Cass and Spann have joined with others in the cigar industry to seek a change in Congress to protect premium hand-rolled cigars from FDA regulation and save 85,000 small business jobs around the country. Resolutions in both the House and the Senate remain in committee. In the House, the resolution sponsored by U.S. Rep. Bill Posey, a Republican from Florida — home to many of the nation's premium cigar makers — has gained more than 200 co-sponsors. The Senate resolution, sponsored by Democratic U.S. Sen. Bill Nelson, also from Florida, has more than 10 co-sponsors. As far as regulation is concerned, the greatest need is to "put an end to the production and marketing of products that have the greatest appeal to youth," said Matt Myers, president of the Campaign for Tobacco-Free Kids, singling out machine-made large cigars, little cigars and tobacco wrappers that sold at convenience stores for low prices and in a variety of flavors like peach and strawberry. Nearly 19 percent of high school boys currently smoke cigars, according to the 2009 Youth Risk Behavior Survey.
That's slightly less than the 2005 rate of 19.2 percent. "These highly flavored little cigars clearly appeal disproportionately to young people and have the potential to serve as starter tobacco products," Myers said. While all cigars increase the risk of disease, Myers said "the FDA has the ability to segment which cigar products pose the greatest risk both in terms of disease and in terms of youth use and to design regulations appropriate for each, which is what we'd like to see them do." Richmond, Va.-based Altria Group Inc., owner of Black & Mild cigar maker John Middleton, said in a statement that if the FDA asserts regulation over cigars, it should be "science-based and apply to all cigar manufacturers."
Machine-made Black & Mild cigars and cigarillos are sold in flavor varieties such as sweet, wine and apple. Altria also owns the nation's biggest tobacco company and maker of top-selling Marlboro cigarettes, Philip Morris USA. But for Rocky Patel, who quit his job as an entertainment lawyer in California to start a boutique cigar business out of his garage, legislative or regulatory exemption of premium handmade cigars is vital to his survival and the about 2,000 people he directly or indirectly employs. "I gave up a law practice to start this dream ... I worked relentlessly and built this company and started with nothing," Patel said of his Florida-based cigar company. "We went from making 100,000 cigars to about 18 million cigars (each year) and all this could be taken away with the stroke of a pen from the FDA."
While anti-smoking efforts worldwide inform people of smoking's dangers on a daily basis, many adults continue to smoke cigarettes knowing the health risks. A new public service announcement from the Thai Health Promotion Foundation took a different approach to get smokers to think about their health - by enlisting young kids to walk up to smokers on the street, pull out a cigarette and ask for a lighter.
Does this Belgian Alzheimer's PSA go too far?
Darren Aronofsky directs terrifying anti-meth PSAs How would you react if a small child asked you for a light during your smoke break? Watch below to see kids deliver a dose of perspective in this public service announcement out of Thailand
Springfield's year-old smoking ban is legal and does not violate the rights of bar owners to allow their customers to smoke, an appeals court ruled Tuesday. Jean Doublin, owner of Ruthie's Bar in Springfield, had sued after voters approved the ban last year, contending the city ordinance conflicted with state law on the issue. Her attorney, Jonathan Sternberg, argued that a provision in the state Indoor Clean Air Act of 1992 that allows bars and taverns to post signs "making nonsmoking areas unavailable" essentially allows smoking in those establishments.
Attorneys for the city argued that the Springfield ban, which prohibits smoking almost anywhere someone works or the public has access, simply goes further than state law in regulating smoking, The Springfield News-Leader reported. On Tuesday, a panel of Southern District Appellate Court judges ruled for the city. The state law "is not a statute that was enacted to permit smoking or to protect the rights of smokers," but instead is meant to prohibit smoking, the judge's ruled. Although Springfield's ban is more restrictive than state law, it does not "prohibit what the statute permits," the opinion says. City attorney Dan Wichmer said the judges' decision affirms the city's position.
"To us the state law was a nonsmokers bill of rights and we were just furthering that law," he said. Sternberg said he will ask the Missouri Supreme Court to consider the case, but he's not optimistic because the high court turned down his appeal of a ruling in a similar case concerning a Kansas City smoking ban. Rep. Melissa Leach, R-Springfield, filed a bill during the last legislative session to exempt bars and some other businesses from smoking bans statewide. The bill died in committee but Leach has said she may file it again. Springfield voters have approved the ban twice, once in 2011 and again this year after opponents successfully got it placed on the ballot again.
вторник, 12 июня 2012 г.
Monday night, Lancaster County leaders planned to roll out a proposed new ban on smoking. Patterned after similar laws in Rock Hill, Greenville and Myrtle Beach, the ordinance would outlaw smoking almost everywhere indoors. "We're not asking people to quit smoking. We're asking people not to smoke in places where there are families and people who don't smoke," said Lancaster County Council member Larry Honeycutt. Honeycutt helped create the proposal as part of the county's Health and Wellness Commission.
"We've been working on this two years, and I think it's an ordinance people can live with where they don't feel their rights will be absolutely violated," he said. Dianna Doster doesn't feel that way at all. She smoked for 25 years, quit two years ago, but said smokers are losing all their rights. "If you're taking away smoking from people, you're taking away their rights for everything. To me, it's wrong," she said. Linda Clifton is also a smoker, and feels the same. "I just think they ought to not take everybody's rights," she said.
However, her son, Mitchell, who's smoked since he was 12 years old, said a ban on smoking could help him finally quit the habit. "If they're gonna ban smoking, they should just take it all out of the stores and not sell it anywhere in South Carolina," he said. The ban would only allow smoking in bars, private clubs or tobacco shops. Restaurants would no longer be able to allow smoking or have smoking sections. When asked, several county leaders could not name more than one or two places that still allowed smoking inside anyway. Most have banned it on their own. However, Honeycutt said the proposed law is still needed.
"We do still have restaurants that allow smoking," he said. Honeycutt said several restaurants in the county that have already banned smoking have seen their business increase, and customers return. Glenn McCain said he and his wife would be more likely to eat out at a place where smoking was not allowed. "It makes a big difference. My wife has never smoked either and the smell of it bothers her," McCain said. The Lancaster County Council will discuss the issue Monday night. A first vote is not expected until June 25.
South Bend's Common Council gave first reading to the controversial ordinance that would ban smoking in bars and restaurants during its meeting Monday evening. "We certainly recognize change is difficult and we're presenting a change, but ultimately I hope that everyone in the community and our colleagues on the council will look at the evidence that has been presented," said Valerie Schey (D) - District 3. Schey, along with Fred Ferlic, Oliver Davis and Gavin Ferlic co-sponsored the bill. In order to pass it, they would only need one vote, but may struggle to get it.
"If a business person has built up their business and their establishment, in my view it’s up to them whether they would like to have them continue or not," said Derek Dieter (D) - At-Large. The bill may also drive smokers to nearby cities or into the county where smoking would still be allowed. "I think it should be county wide. It's not fair to a city resident or city business that if this were to pass and I have no idea if it would, for someone to be able to go into the county and the same thing, so my own personal opinion I would not be for it," said Dieter. During the Health and Public Safety Committee earlier Monday afternoon, Code Enforcement expressed some concerns about enforcing the ordinance, although it had been formally reviewed yet.
Proponents said it would not take many more resources to enforce this ordinance, if it passes. "Certainly we will be working with the code department and their officers to really go through the training required. It's really more of a self-policing type of ordinance where the bar owners will be asked to ask guests that are smoking to stop smoking," said Schey. In anticipation of many people speaking on both sides, the council scheduled the public hearing for June 18 at 5 p.m. A vote could come during the regular meeting on June 25.
In California Tuesday night, voters are deciding whether to impose a new tax on tobacco products. For cigarette smokers, it would mean an extra dollar a pack. But it could cost the tobacco companies a lot more than that. The ad war over Proposition 29 in California has been raging for weeks. One ad said: "A 'yes' vote on Prop 29 will save lives, provide cancer research money, and keep our kids from smoking." But another ad said: "It raises $735 million in tobacco taxes. But not one penny goes to new funding for cancer treatment." Health advocates thought the $1 per pack tax on cigarettes would be an easy sell.
California has been at the forefront of banning smoking in public places. Mark DiCamillo conducts the California Field Poll. "A cigarette tax on its face is usually a popular kind of tax with voters," he said, "and the reason for that is that most voters don't smoke." Just 12 percent of Californians smoke. Donations to pay for ads supporting Prop 29 rolled in from Lance Armstrong's foundation and New York Mayor Michael Bloomberg. A March poll found 67 percent favored the proposal. Then big tobacco fought back in a big way. "Prop 29 is flawed. It raises nearly a billion in taxes, but doesn't require it to be spent in California creating jobs," said an anti-Prop 29 ad. Tobacco giants Phillip Morris and R.J. Reynolds launched a counterattack with a $46-million war chest.
Their campaign has cut support for the tax to just 53 percent Daniel Newman runs a research firm that has tracked the money spent by both sides. "The tobacco groups are spending triple what the 'yes' side -- the cancer groups -- are spending," he said. "The tobacco companies have the resources to spend whatever they feel they need to spend to defeat this measure." If passed, the tax would raise an estimated $735 million to fund cancer research and education. Critics say it will do nothing to solve California's biggest problem: its massive budget deficit. Joel Fox is president of a small business association opposed to the tax.
"We have a $16-billion deficit and they're trying to wall off some more money," he said. "Not a penny goes to education, not a penny goes to the social welfare programs in the state." Health researchers tell us that if the tax does pass, they expect the number of smokers here in California to drop from 12 percent to about 8 percent. That alone could cost the tobacco companies about $1 billion, so that is a big part of why they are fighting so hard to defeat this.
Health-conscious Californians may mostly oppose smoking for its costs to public health and the economy but an aggressive tobacco industry campaign and general anti-tax sentiment may block a measure to raise taxes on smokers. Airwaves in the most populous U.S. state are filling up with advertising for and against Proposition 29, a June 5 ballot measure that would add a $1 tax to a pack of cigarettes, taking the tax to $1.87, mainly to fund medical research on tobacco usage and programs to prevent and control it. More than $40 million, mostly from the tobacco industry, has been raised to defeat the measure, dwarfing its proponents' war chest. But proponents are showing an ability to punch above their weight, most recently with a television commercial whose characters satirically explain why they support "Big Tobacco."
One character says "I support Big Tobacco because they killed my wife and that's one less mouth to feed." More tough TV spots may follow as survey results released this week showed just over half of likely voters supporting the measure - down from just over two-thirds in March. "Today, 53 percent say they will vote yes, 42 percent say they will vote no, and 5 percent are undecided on the measure," the Public Policy Institute of California's survey report said. The ballot measure in California, the world's ninth largest economy, is of national importance because other U.S. states often follow its lead in confronting problems in public health, the environment and other areas of public policy.
The drop in support puts Prop 29 below a critical level for revenue measures with election day fast approaching, said Larry Gerston, a political scientist at San Jose State University. "You've got to have 60 percent going in because there are always people who for whatever reason back off," he said, noting the drop also shows how effective advertising that taps into distrust of the state government has been against the measure. That distrust is working against the general idea of raising tobacco taxes, which 63 percent of likely voters favor, said Mark Baldassare, the institute's president. END RUN AROUND LEGISLATURE "Sixty-two percent of likely voters say the state government wastes a lot of money," Baldassare said. "Any time you're asking voters to raise state taxes for any purpose and there is questioning of the functioning of state government it's going to raise doubts."
Californians have been questioning the finances of their state for a decade due to its persistent budget shortfalls. Governor Jerry Brown earlier this month revised the state's projected deficit to $15.7 billion from a $9.2 billion gap forecast in January. To close the shortfall, he proposed cuts to state employees' pay and health, social and welfare programs. He also urged support for a tax measure in November to lift the state's sales tax and raise income taxes on wealthy taxpayers. Supporters of Prop 29 did not expect smooth sailing to sway voters, but a tobacco tax increase has better odds at the ballot box than in the state legislature, said Jim Knox, a legislative advocate for the American Cancer Society. By his count more than 30 efforts over the last three decades to have lawmakers raise tobacco taxes have failed.
There is no incentive for the legislature as a body to embrace a consequential tobacco tax increase, said Stanton Glantz, director of the Center for Tobacco Control Research and Education at the University of California, San Francisco. Democrats won't turn down support from the tobacco industry that helps cement their majority in the legislature while its Republican minority opposes taxes in general and needs any help it can get to retain seats. "The legislature is just simply dominated by tobacco interests," said Glantz, whose work based on documents from a tobacco industry whistleblower helped produce the 1998 Tobacco Master Settlement Agreement. That settlement between 46 states and tobacco companies was the biggest civil litigation settlement in U.S. history.
Big Tobacco’s branding a proposed California cigarette tax as a government boondoggle sent a message that could echo in other states. Through a barrage of campaign ads, the industry was able to cut support for a $1-a-pack cigarette tax backed by cycling legend Lance Armstrong from a two-thirds majority in March to a dead heat on Election Day. While the outcome remained unclear Wednesday afternoon, experts said the vote could scare off tobacco foes in other states. The $47 million ad campaign _ which scarcely motioned the word “tobacco” _ also showed that cigarette makers are shifting from arguing about their product to finding other ways to attack tax initiatives. Anti-smoking advocates say they will keep fighting for increased taxes, which have been shown to cut smoking rates.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. A California initiative to raise the tax on tobacco products was losing early Wednesday but the vote was still too close to call because hundreds of thousands of ballots potentially remained uncounted. The day after Election Day, Proposition 29 was losing by just over 1 percent, or about 64,000 votes out of more than 3.8 million counted. However, even with all precincts reporting, there typically are many late-arriving ballots from early and absentee voting not counted until after election day. These ballots typically comprise up to 20 percent of all votes, meaning potentially hundreds of thousands of votes were still to be counted statewide. It could be days or longer before a winner is declared.
Cycling legend Lance Armstrong backed the measure to impose an additional $1-per-pack tax on cigarettes to fund cancer research. A $50 million opposition ad campaign was led by Big Tobacco. In March, a statewide poll suggested the Proposition 29 would pass with two-thirds approval. The situation reminded some of a 2006 California cigarette tax measure that was leading by wide margins until tobacco companies spent $66 million to defeat it. The attempt to hike taxes on cigarettes and other tobacco products grew into a national fight last month with tobacco companies pouring in millions to quash the effort and celebrities including the New York City Mayor urging voters to support it. As returns came in, both camps said they expected a close race but remained confident they would emerge the winner.
A California initiative to raise the tax on tobacco products was losing early Wednesday but the vote was still too close to call because hundreds of thousands of ballots potentially remained uncounted. The day after Election Day, Proposition 29 was losing by just over 1% or about 64,000 votes out of more than 3.8 million counted. However, even with all precincts reporting, there typically are many late-arriving ballots from early and absentee voting not counted until after election day. These ballots typically comprise up to 20% of all votes, meaning potentially hundreds of thousands of votes were still to be counted statewide.
It could be days or longer before a winner is declared. Cycling legend Lance Armstrong backed the measure to impose an additional $1-per-pack tax on cigarettes to fund cancer research. A $50 million opposition ad campaign was led by Big Tobacco. In March, a statewide poll suggested the Proposition 29 would pass with two-thirds approval. The situation reminded some of a 2006 California cigarette tax measure that was leading by wide margins until tobacco companies spent $66 million to defeat it. The attempt to hike taxes on cigarettes and other tobacco products grew into a national fight last month with tobacco companies pouring in millions to quash the effort and celebrities including the New York City Mayor urging voters to support it. As returns came in, both camps said they expected a close race but remained confident they would emerge the winner.
"We expected that as voters took a look at the measure, they would recognize the serious flaws, and as well intentioned as the measure is, they would realize it's not right for California," Beth Miller, spokeswoman for the No on 29 campaign said Wednesday. Tobacco taxes have been proven to reduce smoking. But opponents said the initiative would create an unaccountable bureaucracy in charge of doling out the tax revenue, which is expected to start at $735 million a year. An extra tax in the nation's most populous state also could mean major losses for tobacco companies, and Proposition 29 supporters said industry heavyweights were inventing arguments to obscure their true motive — safeguarding profits. "I think the public health message has gotten through the smoke screen of the tobacco companies' nearly $50 million misinformation campaign," Jim Knox of the American Cancer Society said Tuesday.
Armstrong and a coalition of anti-smoking groups raised about $18 million to bolster the measure. New York City Mayor Michael Bloomberg gave $500,000 to the campaign to help offset the industry donations. Majorities in the Democratic-leaning counties along the Northern California coast favored the tax, while majorities in most other regions others opposed it. Voters on both sides expressed strong convictions as they cast their ballots. "I think that we should aggressively discourage smoking — make it less convenient, make it more expensive," said Susan Hyman of Long Beach. In nearby Glendale, Craig Jerpseth, a 43 year-old nurse, was equally certain about voting the measure down. "I hope we don't get any more taxes.
That's pretty much it," he said. A slew of newspapers, including the Los Angeles Times, opposed the measure while proclaiming their reluctance to side with tobacco companies. They argued that the revenue should go to the state, which Gov. Jerry Brown announced last month now faces a deficit of $16 billion. With a smoking rate of 12.1%, California has not raised these taxes since 2000. If the measure passes, California would still have only the 16th highest tax rate in the nation.
A California ballot initiative that pitted big-spending tobacco companies against cycling legend Lance Armstrong and New York City Mayor Michael Bloomberg was too close to call Tuesday night. In a testament to the power of a month-long onslaught of radio and television campaigns financed by tobacco companies, Californians were split on whether slap an additional $1-per-pack tax on cigarettes and other tobacco products to fund cancer research. The measure had almost 51 percent of the vote with more than 2 million ballots cast.
The Public Policy Institute of California found that support for the initiative dropped from 67 percent in March to 53 percent by late May. The attempt to increase cigarettes taxes in the nation's most populous state has attracted nationwide attention, with tobacco companies pouring in millions to quash the effort and celebrities urging voters to support it. Tobacco taxes have been proven to reduce smoking. But opponents said the initiative would create an unaccountable bureaucracy and hurt the economy by sending tax money raised in California to other states. An extra tax in the state also would mean major losses for tobacco companies. Both camps said Tuesday night that they had expected a close race and remained confident. "It's going to be a long night, and that's what we expected," said Beth Miller, spokeswoman for the no on 29 campaign.
"It's been a question of the voters taking a look and deciding that they really didn't want to support this measure, but it's also coupled with the fact that people generally do support cancer research." Supporters said the tax revenue would stay in California and create jobs. They said tobacco companies are inventing arguments to obscure their true motive -- safeguarding profits. Patrick Reynolds, grandson of the founder of tobacco company R.J. Reynolds and the executive director TobaccoFree.org, said Tuesday night that he was feeling confident and was happy to see the measure eking out a narrow lead. Armstrong and a coalition of anti-smoking groups raised about $18 million to bolster the measure. New York City Mayor Michael Bloomberg gave $500,000 to the campaign to help offset the industry donations.
The tax would generate about $735 million a year in revenue, according to the independent legislative analyst's office. At polling places around the state Tuesday, voters on both side of the issue expressed strong convictions. At a sleepy poll site in Long Beach, attorney Susan Hyman cast her ballot for a new tobacco tax without hesitation. "I think that we should aggressively discourage smoking -- make it less convenient, make it more expensive," said Hyman, a Democrat. At a nearly abandoned polling site at a parochial school in the Los Angeles area, Craig Jerpseth, 43, said he's voting against anything or anyone who might mean more taxes.
"I hope we don't get any more taxes. That's pretty much it," said the Glendale nurse. A slew of newspapers, including the Los Angeles Times, have opposed the measure while proclaiming their reluctance to side with tobacco companies. They argue that the revenue should go to the state, which Gov. Jerry Brown announced last month now faces a deficit of $16 billion. With a smoking rate of 12.1 percent, California has not raised these taxes since 2000. If the measure passes, California would still have only the 16th highest tax rate in the nation.
It’s a first of its’ kind bust in Florida — Drug Enforcement Agents taking down a South Florida man suspected of distributing fake pot. Monday, the U.S. Attorney’s Office in Miami said Joel Lester, 52, pleaded guilty to one count of conspiring to possess with the intent to distribute synthetic marijuana. Drug Enforcement Agents say they found bags and boxes of fake pot — with catchy names like Mr. Nice Guy Mango, Mr. Nice Guy Strawberry and Blueberry Afterlife — when they busted Lester. Federal prosecutors say Lester sold fake pot to convenience stores and gas stations which then sold it to the public.
Mark Trouville, the Special Agent in Charge of DEA’s Miami Field Division, said the case against Lester signifies a new front in the fight against illegal drugs. This is a significant case for us,” Trouville said. “It’s the first federal prosecution of synthetic marijuana investigations. The DEA is going to aggressively pursue this.” Trouville said the makers and sellers of synthetic marijuana are crafty at keeping their products on store shelves.
Even though the DEA and state legislators have banned many ingredients in fake pot, authorities say the makers have slightly altered the recipe to keep it legal. Trouville said that’s what makes fake pot so dangerous. “These are cousins of THC which is the active ingredient in marijuana and the potency is absolutely uncontrolled,” Trouville explained. “Some of the chemists who are doing this don’t even understand themselves how powerful this stuff is.” And it has led to serious injuries and even death. Just ask Gail Beard of Sunrise.
Her son Sean nearly died when his kidneys failed after smoking fake pot. “It needs to be stopped,” Beard told CBS 4′s Carey Codd. “It really does. The quicker that we get these places shut down and find out who these people are the better off we’re going to be.” The bottom line — says the DEA — if you use fake pot you don’t know what you’re putting in your body. “What may be something that got you high on one day, the same package two weeks from then could kill you,” Trouville warned. Federal prosecutors say Joel Lester will be sentenced in August. He could face up to 20 years in prison and a fine of up to $1-million dollars.