NEW YORK -- Legislation approved by the U.S. Senate -- giving the Food and Drug Administration authority to regulate tobacco products -- could aid in efforts to curb underage smoking and counterfeit sales of cigarettes in retail outlets, according to executives at Philip Morris USA, based here.
ng problem," he said, citing U.S. Customs statistics showing that in 2003, cigarettes accounted for close to 45% of all seizures of counterfeit merchandise. Philip Morris was able to confirm counterfeit sales in 18 states, he added, and the company suspects it is taking place in close to two dozen more. Counterfeit cigarettes create an uneven playing field for legitimate manufacturers and also erode consumer confidence due to lower quality standards, Holleran said. Philip Morris has thus far filed lawsuits against 2,800 retailers who were found to be selling counterfeit versions of its brands.
"Well over 95% of counterfeit cigarettes we have seen have counterfeit state excise tax stamps, so the states are losing money on these sales as well," Holleran said. And, recent reports from the federal Government Accountability Office point to increasing evidence between "these tremendous profits that are generated from contraband cigarette trafficking and ties to terrorist organizations and organized criminal activity financing," he added.
The situation is even worse in certain overseas markets, where counterfeit product accounts for about 30% of tobacco sales.
"We are fearful of that kind of future in the U.S.," said Mark Berlind, vice president and associate general counsel, Altria Corporate Services, during the media briefing. Altria is the parent company of Philip Morris USA.
Berlind pointed out that the new legislation reinforces previous rules concerning the equal treatment of all retailers that sell tobacco products. Advertising restrictions in the retail environment can't discriminate based on channel of trade, nor can the FDA ever seek to limit the customer base by raising the legal smoking age to over 18, Berlind said.
The new legislation also contains provisions that call for the FDA to strictly regulate any new tobacco products that claim to possess reduced levels of harmful toxins, and to educate the public on the dangers of tobacco use.