R.J. Reynolds Smokeless so safe - not fair to tax.??

March 16, 2009 - R.J. Reynolds Tobacco Co. worries that smokeless tobacco products such as their discount moist-snuff Grizzly brand or Camel Snus will create bigger bull's-eye for federal and state politicians looking to fill budget shortfalls with a larger tax on those products.

Marc Basnight, the North Carolina Senate president pro tem - An increase in the state's smokeless-tobacco tax is on the table. The amount of tax revenue that can be raised from smokeless tobacco is small compared with cigarettes. That's because compared with 20 percent of adult Americans who smoke cigarettes, about 6 percent of male adult Americans and less than 1 percent of female adult Americans use smokeless-tobacco products.

Grizzly had an 18 percent increase in cans sold last year (2008) to nearly 280 million. Grizzly's market share in shipments also rose 2.2 percentage points to 23.3 percent. "Snus makes up about 1 percent of smokeless-tobacco sales, so clearly it has a ways to go before having an impact," said Bill Godshall, the executive director of SmokeFree Pennsylvania. Reynolds has given away most of these cans of snus away free - either by given to the retailer or by way of various coupons to get item for free. (Is It Justified - R.J. Reynolds Tobacco Adding Test Cities for Camel SNUS - Is It Justified??)


The federal government has spoken: "Tobacco products are not safe and cannot be made safe and there is no medically established public health benefit associated with tobacco" as written by Michael Leavitt, Secretary of Health and Human Services in the Bush Administration.

Reynolds is plowing ahead with its smokeless-tobacco initiatives as part of what Susan Ivey, its chairwoman and chief executive, calls its transformation into becoming a "total tobacco company." (With the acquisition of UST, Inc. Altria considers themselves the premier tobacco company in the United States with leading brands in cigarettes (Marlboro), smokeless tobacco (Copenhagen, Skoal) and large machine-made cigars (Black&Mild).)

One initiative is running high-profile advertisements for Camel Snus recently in magazines such as Car & Driver, People, Rolling Stone and Sports Illustrated. By comparison, Reynolds has not run print ads for its cigarettes brands for the past 15 months.

The tag line for the Camel Snus ad is "Your cigarettes may get jealous." The company also is running special ads in test markets for next-generation smokeless products such as orbs, sticks and film strips similar to clean-breath products.

Dr. John Spangler, the director of the Tobacco Intervention program at Wake Forest University School of Medicine: "All tobacco products should be taxed at the same rate to discourage use. Smokeless and cigars are gateway products to teen and young adult smoking, and as such there should be strong disincentive by taxing as high as cigarettes to avoid youth uptake of the tobacco habit."

"There is no evidence smokeless tobacco can help people quit smoking. There are no studies we would consider sufficient." Dr. Terry Pechacek, Associate Director of Science at the Centers for Disease Control Office on Smoking and Health. (SNUS the BUMP, Nordic Reach (The Scandinavian Lifestyle Quarterly}, No.17 Volume XIX, 2007, p53).

Reference: Smokeless tobacco target for tax increase by Richard Craver, Winston-Salem Journal, 3/15/2009.