Hard Habit To Kick Despite Friday’s Mammoth Settlement And Broad Attacks, Tobacco Likely Will Remain One Of World’s Most Profitable Industries.


At Friday’s news conference announcing the stunning $368.5 billion settlement between the tobacco industry and 40 states, the attorneys general who negotiated the deal hailed it as the beginning of the end of smoking in America.

But even before the ink was dry on the massive agreement, critics were attacking the settlement as unlikely to bring about the demise of smoking.

For instance, David Kessler, the former commissioner of the Food and Drug Administration, said various loopholes will prevent the FDA from being able to regulate tobacco, a power it has long sought.

Other health groups blasted the proposal for being overly fair to the tobacco industry and promised to fight the plan in Congress, which must approve it.

And some smokers, like Ana Maria Fernandez, head of Miami’s IAC Advertising Group, resented the settlement. Although she has cut down on smoking herself, she has concerns that, in its zeal to curb an American vice, government is trampling on people’s rights.

“Obviously, it is socially unacceptable,” she said. “Obviously, it is unhealthy. But it is still a personal decision.”

And many people continue to choose to smoke. In fact, U.S. consumption of cigarettes has been rising slightly in recent years. And in Florida, three decades after the surgeon general’s report that linked cigarettes to cancer, roughly one in four adults still smoke.

At least one thing is clear: Tobacco will remain, at least for now, one of the most profitable industries in the world. A report by the investment house of Sanford Bernstein predicted that profits will drop only to $6.7 billion from $8.4 billion for Big Tobacco next year.

A longer-term question was left unanswered: Does smoking have a future?

No success yet

Analysts said that, if history is any guide, efforts to keep people from smoking are highly unlikely to be universally successful. Government leaders have been trying virtually since European settlers landed in North America.

“King James I thought tobacco was a cursed product,” said Chris Geist, a professor of popular culture at Bowling Green State University in Ohio. “Yet, it was the thing that made his colony profitable.”

The conundrum - of tobacco being too profitable, at least for some, to kick - has dogged the American economy ever since.

Just how profitable is tobacco? Consider the nation’s huge convenience store industry. It takes in $70 billion annually in revenue. Of that, more than $18 billion comes from the sale of smokes, according to the National Convenience Store Association.

“It’s one of their most profitable products,” said Darryl Jayson, vice president of the Tobacco Merchants Association.

That kind of popularity, coupled with the fact that many people are physically addicted to tobacco, virtually guarantees that cigarettes aren’t likely to disappear from the landscape anytime soon.

Some even questioned whether increased government involvement might backfire.

“The thing that concerns us is that sometimes we seem to be returning to Prohibition,” said Lewis Maltby, director of the workplace rights project of the American Civil Liberties Union. Prohibition is considered one of the country’s great legislative fiascoes.

“There are some who think smoking is not an individual choice,” he said. “If people want to smoke cigarettes in their own home, government should leave them alone.”

But the attorneys general essentially disagreed. Their argument is that smoking takes a toll on all Americans, whether they smoke or not.

Since 1964, it is estimated, smoking has cost the nation $68 billion in medical expenses and lost productivity. States, through Medicaid payments for ill smokers, have had to foot much of the tab. And 400,000 people die of smoking-related illnesses annually.

Statistics like these have Ahron Leichtman, head of Citizens for a Tobacco-Free Society, hopeful that Friday’s agreement will indeed lead to a reduction in cigarette smoking in the United States.

Impact predicted

“It could bring about a substantial decrease in America,” he said. The combination of higher prices and better-funded education programs should lead people to curtail cigarette use, he said.

Such an effort in California resulted in a drop in the proportion of adults who smoke, to 16.7 percent from 26.8 percent, between 1988 and 1995.

But others believe the possibility remains that, in its zeal to curb tobacco use, government may simply drive it underground. A heavy tax on cigarettes levied by Canada several years ago led to the formation of a black market in tobacco products.

Already, some smokers say they feel like they’re living in a social netherworld, defiantly practicing a behavior that is increasingly subject to legal restrictions.

“There are many more closet smokers than you think,” said Fernandez, the advertising executive. “You’re beginning to see a subculture develop.”

Click here to comment on this story »

Back to Spokesman Mobile