New Regulations on Tobacco from the FDA

Over the past six months since the U.S. Food and Drug Administration (FDA) began wielding its new powers to regulate cigarettes, smokeless and roll-your-own tobacco, the implementation of the law has been anything but smooth.

Even though Dr. Lawrence Deyton, the FDA’s new head of the Center for Tobacco Products, announced several times during “Listening Session” conference calls with retailers and manufacturers that the FDA desires to communicate regularly and work cooperatively with the tobacco industry, the reality of the situation is characterized by one way communications and punctuated by lawsuits.

Flavored Cigarette Ban
The one way communications started with a letter issued by Dr. Deyton in September regarding the implementation of the ban on most flavored cigarettes (except cigarettes with tobacco or menthol flavors). However, the letter indicated that not only were flavored cigarettes banned, but also “all tobacco products that meet the definition of a ‘cigarette’ [under the new FDA law] even if they are not labeled as ‘cigarettes’ or are labeled as cigars or as some other product.”

Despite the fact that the new law specifically states that the FDA is to regulate cigarettes, smokeless tobacco and roll-your-own tobacco, and even though industry members requested a clarification that this FDA position did not result in a ban on flavored and clove little cigars, the FDA failed to issue any definitive reply.

The result was a lawsuit filed by Kretek International in federal district court in Washington seeking a declaratory ruling that the new law does not ban flavored and clove little cigars. What does this mean for retailers? For now, while most flavored cigarettes are now banned, flavored little cigars remain legal to sell.

Color Advertising Ban
Industry members did not wait for the FDA’s cigarette color advertising ban and graphic warning label requirements to go into effect before filing a lawsuit against the government seeking to declare the advertising ban and the graphic warning labels unconstitutional. Five major manufacturers including R.J. Reynolds, Conwood, Commonwealth Brands, Lorillard and National Tobacco Co., plus NATO retail member Discount Tobacco City & Lottery, filed the lawsuit in Kentucky federal district court.

How will retailers be impacted by these developments? A hearing on the lawsuit seeking to overturn the advertising ban and warning labels has already been held and a decision should be issued by the federal judge very soon. Given past U.S. Supreme Court decisions protecting the free speech right to advertise tobacco products, the law favors the industry’s constitutional rights to advertise cigarettes and not to be subject to overly intrusive package warning labels.

Internet Sales Restrictions
The new FDA law also requires that the agency draft regulations regarding the sale and distribution of tobacco products that occur by mail order or over the Internet to prevent the sale to underage individuals, including requirements for age verification. These regulations must be finalized no later than Dec. 31, 2010. Moreover, by June 22, 2011, the FDA is required to issue regulations to address the promotion and marketing of tobacco products sold in other than a direct face-to-face sale in order to protect underage individuals. The future regulations may help stem the tide of cigarettes and smokeless tobacco products sold over the Internet or by mail order.

While each of the lawsuits already filed against the FDA will work their way through the federal court system, the FDA’s actions have already demonstrated a willingness by the agency to expand regulations to tobacco products other than cigarettes, smokeless tobacco and roll-your-own tobacco and to do so without first communicating with industry members. This kind of “regulate first, talk later” approach will more than likely lead to additional lawsuits against the FDA as it pursues more regulations to severely restrict or even ban other tobacco products. Retailers can expect a bumpy regulatory environment for the foreseeable future.

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