Newly proposed legislation in both the U.S. House of Representatives and the Senate seeks to give the Food and Drug Administration (FDA) power to regulate cigarettes and other tobacco products.
The Senate proposal was introduced May 20 (2004) by Mike DeWine, R-Ohio, and Edward Kennedy, D-Mass. A similar proposal in the House was introduced by Rep. Tom Davis, R-Va., and Henry Waxman, D-Calif. Industry leader Philip Morris USA supports both bills but other major cigarette companies are on record as opposing FDA regulation.
Among other provisions, the companion bills would give FDA power to determine some aspects of cigarette design, rework the warnings used on cigarette labeling and advertisements and limit or ban some ingredients from cigarettes (and limit but not ban nicotine). It would also allow FDA to regulate tobacco advertising and give the agency authority to implement educational programs on cigarette use.
During the Clinton Administration FDA attempted to assume regulatory power over the tobacco industry but the federal courts ruled the agency cannot assume such authority unless it is granted by Congress. The proposed legislation attempts to grant that authority.
Many tobacco farmers are hopeful a tobacco quota buyout plan will eventually be linked to the legislation. This plan would give payments to quota holders and growers for each quota pound of tobacco they own or currently grow.
Philip Morris USA agrees.
"These bills would establish, for the first time, a comprehensive and coherent national tobacco policy in this country and, importantly, we believe they provide momentum for passage of tobacco grower buyout legislation which is critical for America's tobacco farmers," says Michael Szymanczyk, chairman and chief executive officer (CEO) of Philip Morris USA.
"As the Congress considers the important legislation introduced today, Altria and Philip Morris USA continue to believe the best way to secure passage of FDA regulation of tobacco products is to combine it with legislation providing fair compensation to quota holders and growers."
The most frequently proposed and discussed plan for a buyout, bringing the federal tobacco support system to an end, would pay quota holders $8 per pound for their tobacco poundage and pay growers $4 per pound for each pound of tobacco they grow. Growers who both own and grow their own quota pounds would get combined payments of $12 per pound.
Tobacco companies would most likely fund the buyout as part of an overall FDA authority and quota buyout agreement. Philip Morris supports a quota buyout. Some other major tobacco companies oppose it. Likewise, other major tobacco companies oppose FDA regulation, reportedly because restrictions on advertising would possibly hinder them from gaining any market share from Philip Morris USA.
A month before the proposed new FDA regulation was introduced in the House and Senate, President Bush stated he opposes elimination of the federal tobacco quota system.
For more information on the new proposed legislation, visit www.philipmorrisusa.com/pressroom/home.asp