ALBANY — Despite a ballooning budget deficit, the Paterson administration quietly has written off taxes it had been expecting to collect on sales of cigarettes by American Indian retailers — an admission that yet another governor has no plans to resolve the long-standing, thorny matter.
In April, Gov. David A. Paterson and lawmakers agreed on a budget for the state's current fiscal year that projected revenue of $65 million from taxing cigarettes sold to non-Indians in smoke shops, through the mail or over the Internet from reservation-based businesses.
But with no fanfare — or even public notice — the administration has eliminated the $65 million, meaning the governor now does not expect to begin collecting the taxes at least until April 1, the start of the new fiscal year.
The decision drew immediate and sharp criticism from health groups and an association that represents non-Indian retailers who say they cannot compete with the American Indians, who do not charge the state's sales $2.75-per-pack excise tax.
"It's embarrassing, and it's outrageous that the Empire State can't seem to figure out how to collect this tax when just about every other state does," said Russell Sciandra, director of the Center for a Tobacco Free New York, which is connected with the American Cancer Society.
Critics say the state loses $1 billion annually by not collecting the cigarette tax. Seneca Nation of Indians retailers lead the country in the sales of untaxed cigarettes.
For years, state officials have worried about potential violence, such as the clash between state troopers and Indians on the Thruway in 1995, when then-Gov. George E. Pataki tried to end the tax-free sales.
Seneca Nation officials, who were working Friday on flood relief efforts, were unavailable to comment.
Last week, the Paterson administration released a 329-page update on state spending through the first quarter of the fiscal year.
The report said the administration believes the state now faces a $2.1 billion deficit this year, and Paterson is looking at spending cuts and other options to propose to a special session of the State Legislature, expected to be held next month. Lawmakers have not ruled out raising taxes to close the gap.
Deep in its pages, the spending update briefly mentions lower cigarette tax revenues, but makes no specific reference to jettisoning the cigarette tax collections.
During an interview on an unrelated topic, Robert Megna, the governor's budget director, revealed to The Buffalo News that the state is backing away from the projection of $65 million from the potential revenue source.
Matt Anderson, a spokesman for Megna, later said the $65 million was deleted from the budget "to prudently address potential risks to our receipts forecast."
"We continue to work diligently toward a negotiated settlement of this issue," he added.
Laws on the books already permit the state to collect the tax, which has been an issue going back to the days of Mario M. Cuomo's tenure as governor. Over the past decade, the dispute has intensified as the state increased cigarette taxes, widening the playing field between Indian and non-Indian retailers.
The Senecas have maintained that treaty rights going back to the days of George Washington give them the right to sell products, including cigarettes, without taxes.
They have long said they never will act as agents of the state government in collecting taxes, which they say would kill off a flourishing Western New York business that employs hundreds of people.
On numerous occasions, the State Legislature has sought to force Paterson, and governors before him, to collect the tax.
In January, Paterson said he wanted to resolve the issue through negotiation. But critics say that, with the stakes so lucrative, the Indian tribes, especially the Senecas, have little reason to negotiate.
"It's sending totally the wrong signal," James Calvin, executive director of the New York Association of Convenience Stores, said of the administration quietly striking the Indian cigarette tax money from the budget.
"If the state has a $2.1 billion deficit, it's crazy not to access the hundreds of millions of dollars in tax revenue that's readily available from this source," he added. "It's already a law. It's collectable. The United States Supreme Court has said we can collect it. Why would you ignore close to $1 billion when staring at such a huge deficit?"
In June 2008, the state raised its excise tax on a pack of cigarettes by $1.50 to $2.75. That gives an Indian retailer who does not charge the tax a built-in price advantage of $27.50 per carton.
"By the end of the fiscal year, the state and Gov. Paterson, we conservatively estimate, will have forgone $1 billion that is owed on Indian cigarette sales," Sciandra said.
Aug 26, 2009
Cigarette Packaging May Still Mislead Consumers
NEW YORK (Reuters Health) - While many countries have banned terms like "light" and "low-tar" from cigarette packs, other aspects of the products' packaging may also be misleading consumers, a new study suggests.
Studies have shown that long-used terms like "light," "mild" and "low- tar" confuse many consumers into thinking that so-described cigarettes carry lower health risks. Dozens of countries have now banned tobacco companies from using the terms on cigarette packs.
But in the new study, Canadian researchers found that other packaging details -- words like "smooth" and "silver," and even the color of the pack -- influence consumers' perceptions of a brand's health risks.
The findings suggest that current regulations are not going far enough to remove misleading elements from cigarette packs, the researchers report in the Journal of Public Health.
One remedy would be to require "plain packaging," free of logos and other brand imagery, write David Hammond and Carla Parkinson of the University of Waterloo in Ontario.
"Plain-packaging regulations came very close to being implemented in Canada in the early 1990s, and they are receiving serious consideration in several other countries at the moment," Hammond noted in an email correspondence to Reuters Health.
The tobacco industry is opposed to such measures, which is not surprising, Hammond noted, since packaging is a key marketing tool, particularly in countries where other forms of tobacco advertising are restricted.
And a cigarette pack's appearance does seem to influence many consumers' perceptions, Hammond and Parkinson found.
For their study, the researchers had 312 smokers and 291 non-smokers look at cigarette packs that had been specifically designed for the study. Participants viewed the packs in pairs, with the two products differing in one element of package design.
Overall, the study found, 80 percent of participants thought that the product labeled "smooth" carried fewer health risks than the one labeled "regular." Similarly, when they viewed products labeled as either "silver" or "full-flavored," 73 percent thought the "silver" product was less hazardous.
Even numbers included as part of the brand-name influenced perceptions. Eighty-four percent of participants thought the product that included a "6" in the name was less risky than another product labeled with a "10."
Color also mattered. More than three-quarters of the men and women thought that the light-blue pack they viewed carried fewer risks than its dark-blue counterpart.
While the tobacco industry opposes the notion of plain packaging, Hammond said he is "confident" it will be a reality in the next five years -- likely with one country setting the precedent, and others quickly following suit.
Ultimately, Hammond said, the public may look back at today's cigarette packaging in the same way they now view the practice of having smoking sections on airplanes.
"People will wonder how such a lethal product was ever allowed to be sold in packages with pictures of flowers and pretty coloring that appeal to young people and provide false reassurance to consumers about the risks of smoking," he explained.
Studies have shown that long-used terms like "light," "mild" and "low- tar" confuse many consumers into thinking that so-described cigarettes carry lower health risks. Dozens of countries have now banned tobacco companies from using the terms on cigarette packs.
But in the new study, Canadian researchers found that other packaging details -- words like "smooth" and "silver," and even the color of the pack -- influence consumers' perceptions of a brand's health risks.
The findings suggest that current regulations are not going far enough to remove misleading elements from cigarette packs, the researchers report in the Journal of Public Health.
One remedy would be to require "plain packaging," free of logos and other brand imagery, write David Hammond and Carla Parkinson of the University of Waterloo in Ontario.
"Plain-packaging regulations came very close to being implemented in Canada in the early 1990s, and they are receiving serious consideration in several other countries at the moment," Hammond noted in an email correspondence to Reuters Health.
The tobacco industry is opposed to such measures, which is not surprising, Hammond noted, since packaging is a key marketing tool, particularly in countries where other forms of tobacco advertising are restricted.
And a cigarette pack's appearance does seem to influence many consumers' perceptions, Hammond and Parkinson found.
For their study, the researchers had 312 smokers and 291 non-smokers look at cigarette packs that had been specifically designed for the study. Participants viewed the packs in pairs, with the two products differing in one element of package design.
Overall, the study found, 80 percent of participants thought that the product labeled "smooth" carried fewer health risks than the one labeled "regular." Similarly, when they viewed products labeled as either "silver" or "full-flavored," 73 percent thought the "silver" product was less hazardous.
Even numbers included as part of the brand-name influenced perceptions. Eighty-four percent of participants thought the product that included a "6" in the name was less risky than another product labeled with a "10."
Color also mattered. More than three-quarters of the men and women thought that the light-blue pack they viewed carried fewer risks than its dark-blue counterpart.
While the tobacco industry opposes the notion of plain packaging, Hammond said he is "confident" it will be a reality in the next five years -- likely with one country setting the precedent, and others quickly following suit.
Ultimately, Hammond said, the public may look back at today's cigarette packaging in the same way they now view the practice of having smoking sections on airplanes.
"People will wonder how such a lethal product was ever allowed to be sold in packages with pictures of flowers and pretty coloring that appeal to young people and provide false reassurance to consumers about the risks of smoking," he explained.
Aug 19, 2009
Union holds up tobacco restructuring
Union resistance means the Thailand Tobacco Monopoly must reconsider its organisational restructuring, said chairwoman Jantima Sirisaengtaksin.
Mrs Jantima said it was incumbent on management of the state enterprise to reopen talks with the TTM's 3,000- strong union and that restructuring did not imply a privatisation.
"The policy to change the TTM into a juristic person is not a privatisation, but a restructuring of the organisation aimed at improving flexibility and reducing obstacles to operations," she said.
Currently, the TTM must essentially seek Finance Ministry approval for nearly any strategic decision, significantly hindering the agency's ability to respond to changes in the market.
Mrs Jantima warned that without change, the TTM may very well face collapse, similar to cigarette producers in other countries.
The TTM produces the market-leading brand Krong Thip, but has seen its revenues fall sharply in recent years due to stiffer anti-smoking regulations as well as competition from foreign producers such as Philip Morris, Japan Tobacco and British American Tobacco.
Mrs Jantima said trade liberalisation had caused the TTM's market share to fall to 77%. While still dominant in the market, the TTM's market share had never fallen below 80% until recently.
The TTM hopes to boost its market share to 85% by 2010-11 through better cost controls, more efficient production processes and product innovations.
Foreign producers, meanwhile, continue to make inroads in the market, with foreign cigarette sales totalling 418.86 million packs in 2007, compared with just 12 million in 1991. The TTM saw its own sales drop to 1.59 billion packs in 2007 compared with 2.31 billion 10 years earlier.
Sales for fiscal 2009 ending next month are projected at 28.8 billion cigarettes, or 5% below targets. Revenues, however, are expected to exceed targets slightly at a projected 44 billion baht this year.
Mrs Jantima said it was incumbent on management of the state enterprise to reopen talks with the TTM's 3,000- strong union and that restructuring did not imply a privatisation.
"The policy to change the TTM into a juristic person is not a privatisation, but a restructuring of the organisation aimed at improving flexibility and reducing obstacles to operations," she said.
Currently, the TTM must essentially seek Finance Ministry approval for nearly any strategic decision, significantly hindering the agency's ability to respond to changes in the market.
Mrs Jantima warned that without change, the TTM may very well face collapse, similar to cigarette producers in other countries.
The TTM produces the market-leading brand Krong Thip, but has seen its revenues fall sharply in recent years due to stiffer anti-smoking regulations as well as competition from foreign producers such as Philip Morris, Japan Tobacco and British American Tobacco.
Mrs Jantima said trade liberalisation had caused the TTM's market share to fall to 77%. While still dominant in the market, the TTM's market share had never fallen below 80% until recently.
The TTM hopes to boost its market share to 85% by 2010-11 through better cost controls, more efficient production processes and product innovations.
Foreign producers, meanwhile, continue to make inroads in the market, with foreign cigarette sales totalling 418.86 million packs in 2007, compared with just 12 million in 1991. The TTM saw its own sales drop to 1.59 billion packs in 2007 compared with 2.31 billion 10 years earlier.
Sales for fiscal 2009 ending next month are projected at 28.8 billion cigarettes, or 5% below targets. Revenues, however, are expected to exceed targets slightly at a projected 44 billion baht this year.
Aug 14, 2009
Analysis Finds Toxic Substances in Electronic Cigarettes
Electronic cigarettes contain traces of toxic substances and carcinogens, according to a preliminary analysis of the products by the Food and Drug Administration.
The findings, which were announced on Wednesday, contradict claims by electronic cigarette manufacturers that their products are safe alternatives to tobacco and contain little more than water vapor, nicotine and propylene glycol, which is used to create artificial smoke in theatrical productions. When heated, the liquid produces a vapor that users inhale through the battery-powered device.
“We’re concerned about them because of what we know is in them and what we don’t know about how they affect the human body,” said Joshua Sharfstein, the F.D.A.’s principal commissioner.
The agency analyzed 19 varieties of cartridges, which hold the liquid, and two cigarettes, one manufactured by NJoy and another by Smoking Everywhere.
The analysis found that several of the cartridges contained detectable levels of nitrosamines, tobacco-specific compounds known to cause cancer. One Smoking Everywhere cartridge was found to contain diethlyene glycol, a common ingredient in antifreeze that counterfeiters have substituted for glycerin in toothpaste, killing hundreds worldwide.
Dr. Sharfstein said the agency was “not sure” what type of effect the diethlyene glycol and other carcinogens have on the human body when inhaled through electronic cigarettes.
The Electronic Cigarette Association, an industry trade group, said in a statement that the F.D.A.’s testing was too “narrow to reach any valid and reliable conclusions” and that its members sell and market their products only to adults.
A statement from the chief executive officer of NJoy, Jack Ledbetter, said a third party had tested its products and found them to be “appropriate alternatives” for cigarettes, but he did not release the findings. The company said its experts would review its tests and the F.D.A.’s.
Electronic cigarettes, which are manufactured in China, are subject to little quality control, Dr. Sharfstein said. The study found the levels of nicotine to vary even in cartridges whose labels claim to have the same amount of nicotine. Some of the cartridges that claimed not to contain nicotine actually did, the analysis found.
The F.D.A. has called electronic cigarettes drug delivery devices and said they should not be allowed in the country. It has turned away about 50 shipments of the devices at the border, but they still continue to be sold in malls nationwide and online. The agency would not comment on whether it planned to ban or seize the devices. In April, Smoking Everywhere sued the F.D.A., claiming that it did not have jurisdiction to bar the electronic devices from entering the United States.
The agency and public health officials are especially worried that electronic cigarettes, which are offered in flavors including cherry and bubblegum, are enticing to children and may be easy for those under 18 to obtain online or in malls.
The findings, which were announced on Wednesday, contradict claims by electronic cigarette manufacturers that their products are safe alternatives to tobacco and contain little more than water vapor, nicotine and propylene glycol, which is used to create artificial smoke in theatrical productions. When heated, the liquid produces a vapor that users inhale through the battery-powered device.
“We’re concerned about them because of what we know is in them and what we don’t know about how they affect the human body,” said Joshua Sharfstein, the F.D.A.’s principal commissioner.
The agency analyzed 19 varieties of cartridges, which hold the liquid, and two cigarettes, one manufactured by NJoy and another by Smoking Everywhere.
The analysis found that several of the cartridges contained detectable levels of nitrosamines, tobacco-specific compounds known to cause cancer. One Smoking Everywhere cartridge was found to contain diethlyene glycol, a common ingredient in antifreeze that counterfeiters have substituted for glycerin in toothpaste, killing hundreds worldwide.
Dr. Sharfstein said the agency was “not sure” what type of effect the diethlyene glycol and other carcinogens have on the human body when inhaled through electronic cigarettes.
The Electronic Cigarette Association, an industry trade group, said in a statement that the F.D.A.’s testing was too “narrow to reach any valid and reliable conclusions” and that its members sell and market their products only to adults.
A statement from the chief executive officer of NJoy, Jack Ledbetter, said a third party had tested its products and found them to be “appropriate alternatives” for cigarettes, but he did not release the findings. The company said its experts would review its tests and the F.D.A.’s.
Electronic cigarettes, which are manufactured in China, are subject to little quality control, Dr. Sharfstein said. The study found the levels of nicotine to vary even in cartridges whose labels claim to have the same amount of nicotine. Some of the cartridges that claimed not to contain nicotine actually did, the analysis found.
The F.D.A. has called electronic cigarettes drug delivery devices and said they should not be allowed in the country. It has turned away about 50 shipments of the devices at the border, but they still continue to be sold in malls nationwide and online. The agency would not comment on whether it planned to ban or seize the devices. In April, Smoking Everywhere sued the F.D.A., claiming that it did not have jurisdiction to bar the electronic devices from entering the United States.
The agency and public health officials are especially worried that electronic cigarettes, which are offered in flavors including cherry and bubblegum, are enticing to children and may be easy for those under 18 to obtain online or in malls.
Aug 11, 2009
Cigarette Packaging is Still Misleading
Last month, President Barack Obama signed The Family Smoking Prevention and Tobacco Control Act into law, allowing the federal government broad authority over tobacco products. Unfortunately, new research indicates that regulations have not fully enabled the removal of misleading information from cigarette labeling, reports ScienceDaily.
Verbiage such as “silver” or “smooth,” says ScienceDaily, allow consumers to believe that cigarettes are not as dangerous. Including low numbers into cigarette brand names, lighter colors, or pictures of filters, add to the misconception, Science Daily added.
The new regulation was enacted to allow regulators to control cigarette packaging and marketing as well as how much nicotine—the addictive component in cigarettes—is added in tobacco products, explained the Washington Post previously.
“Research has already shown that using words such as ‘light,’ ‘mild,’ and ‘low tar’ on cigarette packaging misleads consumers into thinking that one brand carries a lower health risk than another and that’s why those words have been outlawed in more than 50 countries, but there has been virtually no independent research on these other packaging tactics to support broader regulation,” said study’ leader, David Hammond, a professor of health studies at the University of Waterloo in Ontario, Canada, quoted ScienceDaily. “Our study found that commonly-used words not covered by the bans, as well as other packaging design elements such as colour, the use of numbers and references to filters, were just as misleading, which means there’s a loophole that needs to be closed,” Hammond added.
ScienceDaily explained that the study involved 603 adults and was published in yesterday’s online edition of the Journal of Public Health. Canadian researchers are urging for the list of banned words to go beyond what is now prohibited: “light,” “mild,” and “low-tar,” reported ScienceDaily. The group also called for the removal of other “pack elements” to better ensure consumers do not mistakenly believe any one brand of cigarettes is less dangerous than another, said ScienceDaily.
ScienceDaily pointed out that not only is tobacco use the number one cause of preventable death worldwide, but the World Health Organization (WHO) estimates that over five million people die annually from smoking. According to the LA Times previously, citing the National Institutes of Health (NIH), about one-third—30 percent—of “youth” smokers will die prematurely from a “smoking-related disease” and those who begin smoking before they are 21 years of age have the most difficult time quitting. The NIH reports that about 25 percent of all U.S. high school students smoke, said the LA Times.
“An important function of tobacco marketing has been to reassure consumers about the product’s risks and a central feature of the strategy has been to promote the perception that some cigarettes are less hazardous than others, so that health-concerned smokers are encouraged to switch brands rather than quit,” Hammond said. “We’ve seen research described in internal tobacco industry documents indicating that reference to filters and the use of lighter colours conveys that message successfully, but now we have independent confirmation, plus evidence on other words in widespread use,” Hammond added, quoted ScienceDaily. “The truth is that all cigarettes are equally hazardous, regardless of the filter type, what colour the pack is or what words appear on it. These tactics are giving consumers a false sense of reassurance that simply does not exist,” said Hammond.
Verbiage such as “silver” or “smooth,” says ScienceDaily, allow consumers to believe that cigarettes are not as dangerous. Including low numbers into cigarette brand names, lighter colors, or pictures of filters, add to the misconception, Science Daily added.
The new regulation was enacted to allow regulators to control cigarette packaging and marketing as well as how much nicotine—the addictive component in cigarettes—is added in tobacco products, explained the Washington Post previously.
“Research has already shown that using words such as ‘light,’ ‘mild,’ and ‘low tar’ on cigarette packaging misleads consumers into thinking that one brand carries a lower health risk than another and that’s why those words have been outlawed in more than 50 countries, but there has been virtually no independent research on these other packaging tactics to support broader regulation,” said study’ leader, David Hammond, a professor of health studies at the University of Waterloo in Ontario, Canada, quoted ScienceDaily. “Our study found that commonly-used words not covered by the bans, as well as other packaging design elements such as colour, the use of numbers and references to filters, were just as misleading, which means there’s a loophole that needs to be closed,” Hammond added.
ScienceDaily explained that the study involved 603 adults and was published in yesterday’s online edition of the Journal of Public Health. Canadian researchers are urging for the list of banned words to go beyond what is now prohibited: “light,” “mild,” and “low-tar,” reported ScienceDaily. The group also called for the removal of other “pack elements” to better ensure consumers do not mistakenly believe any one brand of cigarettes is less dangerous than another, said ScienceDaily.
ScienceDaily pointed out that not only is tobacco use the number one cause of preventable death worldwide, but the World Health Organization (WHO) estimates that over five million people die annually from smoking. According to the LA Times previously, citing the National Institutes of Health (NIH), about one-third—30 percent—of “youth” smokers will die prematurely from a “smoking-related disease” and those who begin smoking before they are 21 years of age have the most difficult time quitting. The NIH reports that about 25 percent of all U.S. high school students smoke, said the LA Times.
“An important function of tobacco marketing has been to reassure consumers about the product’s risks and a central feature of the strategy has been to promote the perception that some cigarettes are less hazardous than others, so that health-concerned smokers are encouraged to switch brands rather than quit,” Hammond said. “We’ve seen research described in internal tobacco industry documents indicating that reference to filters and the use of lighter colours conveys that message successfully, but now we have independent confirmation, plus evidence on other words in widespread use,” Hammond added, quoted ScienceDaily. “The truth is that all cigarettes are equally hazardous, regardless of the filter type, what colour the pack is or what words appear on it. These tactics are giving consumers a false sense of reassurance that simply does not exist,” said Hammond.
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