California tobacco tax hike narrowly defeated at polls

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California voters narrowly reject new tobacco tax

A California initiative to increase the tax on tobacco to pay for cancer research has failed by less than a percentage point after remaining too close to call for more than two weeks.

With about 5 million ballots cast, opponents of Proposition 29 led by about 28,000 votes. The Associated Press analyzed areas where the roughly 105,000 uncounted votes remain and determined Friday there were not enough places where "yes" was winning to overcome the deficit.

Cyclist Lance Armstrong, a cancer survivor, headed the plan to add $1 to the cigarette tax. Tobacco companies, led by Philip Morris, meanwhile pushed the opposition campaign, pouring millions of dollars into an advertising blitz that whittled away support. Polls showed approval peaked around two-thirds in March but fell dramatically in the weeks before the June 5 balloting.

On Friday, the Prop 29 was failing 50.3 percent to 49.7 percent.

Support for the initiative was strongest in the San Francisco Bay Area, while more conservative places like Southern California's Inland Empire opposed it.

Had the measure passed, Californians would still have paid only the 16th highest tobacco tax in the nation, at $1.87 per pack.

Proponents said they would be back.

"This came so close, I think this is worth another try," said Stan Glantz of the University of California, San Francisco's Center for Tobacco Control Research and Education. "I think it would be horrible if Philip Morris and Reynolds get away with this."

He suggested that cigarette tax supporters might turn to the Legislature, though lawmakers routinely reject attempts to raise tobacco taxes.

The opposition campaign will wait until all the votes have been counted before declaring victory, spokeswoman Beth Miller said.

Opponents of the measure raised $47 million to fight it, a huge sum even by California standards. By comparison, Jerry Brown spent about $36 million in his successful 2010 bid to become governor of California. Wisconsin Gov. Scott Walker and his allies spent $47 million to beat back his recall challenge on June 5.

Armstrong and a coalition of anti-smoking groups raised about $12 million to bolster the measure, including $500,000 from New York City Mayor Michael Bloomberg.

In a statement Friday, Lance Armstrong Foundation President Doug Ulman framed the issue as one of life and death.

"The defeat of this life-saving initiative is a genuine tragedy," he said. "Big Tobacco lied to voters to protect its profits and spent $50 million to ensure it can continue peddling its deadly products to California kids."

While raising the price of tobacco is a proven way to reduce smoking rates, especially in young people, campaign ads sponsored by tobacco companies focused on pocketbook issues. The ads noted money would be raised in California through the tax but wouldn't necessarily stay in the state for research. The campaign also raised the specter of an out-of-control bureaucracy that would be set up to oversee collection and distribution of the money.

The strategy didn't just stir doubt in the minds of voters.

Several major newspapers, including The Los Angeles Times, opposed the measure while expressing general support for such sin taxes and reluctance to side with tobacco companies. They argued that the revenue should go directly to the state, which now faces a $15.2 billion deficit.

The result was reminiscent a 2006 California cigarette tax measure that led by wide margins in early polling until tobacco companies spent $66 million to defeat it with ads featuring physicians.

It was unclear Friday whether the failure of Prop 29 constituted the narrowest defeat of a statewide ballot measure in California's history. Previously, the closest vote in the past two decades was on school bond measure 1B in 1994, which failed 49.6 percent to 50.4, according to Secretary of State spokeswoman Shannan Velayas. The second closest was another tobacco tax measure, which passed 50.5 percent to 49.5 percent in 1998.

California was once at the forefront of smoking restrictions and taxes, but the famously health-conscious state has not raised tobacco taxes since 1998.

Missouri voters are expected to weigh in on a tobacco tax increase in November and similar taxes are working their way through the legislative process in the Rhode Island, Massachusetts and Illinois.

The overwhelming majority of recent tobacco taxes across the nation have been approved in statehouses, not at the polls.

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States Use Only Fraction of Tobacco Revenues to Fight Smoking, Study Finds

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Report: State tobacco prevention funding lacking

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Australia says big tobacco aiding WTO challengers

Reuters – 6 hrs ago GENEVA (Reuters) - The tobacco industry is providing legal advice to Ukraine and Honduras in their challenges to Australia's new tobacco packaging rules at the World Trade Organization, Australian Health Secretary Jane Halton said on Tuesday.

"We know that the tobacco companies, because they have admitted it, are providing legal advice to WTO members in order to encourage them to take action against Australia," she said.

Halton was speaking at an event on the sidelines of the World Health Organization's annual ministerial assembly in Geneva, where WHO director-general Margaret Chan called for stepping up the "tooth-and-nail fight against one of public health's biggest enemies -- the tobacco industry."

Australia is planning to introduce tough new packaging regulations for tobacco from October 1 which will force producers to abandon distinct colorful branding and sell their cigarettes in uniformly drab packets with no adornments. Other tobacco products such as cigars must follow suit by December 1.

"We believe this deals with one of the last forms of tobacco advertising in our country - the packet," Halton said. "We are very very confident that we can withstand these attacks, our government will not be intimidated."

Smoking rates in Australia have declined to 15.1 percent in 2010 from some 30.5 percent in 1998. "Our objective in the next few years is to reach 10 percent and hopefully lower," she said.

Ukraine and Honduras have challenged the move at the WTO by saying it unfairly restricts trade, even though neither country has a significant share of the Australian market.

"We are a long way from both countries and we have very, very little trade with them," Halton said.

Both complainants have "requested consultations" with Australia, the first step in the WTO legal process. The first round of negotiations was held in the past month, she said.

"Our belief is that some people in the meeting were British American Tobacco lawyers," she told Reuters, adding that she wasn't aware of any date for a second round.

A spokesman for British American Tobacco confirmed to Reuters that the company had provided assistance for the WTO challenges but could not confirm that BAT lawyers were directly involved in the talks.

If the case is not settled by negotiation, Honduras or Ukraine could ask the WTO to set up a panel of arbitrators to judge the dispute. If Australia were to lose, it could be forced to undo some of its rules on tobacco.

The two trade suits have attracted a large number of countries as third party observers to the disputes, and some diplomats see them as test cases in the struggle by tobacco firms to halt a global tide of regulation that has sharply tightened the rules on cigarette sales over the past decade.

British American Tobacco, Imperial Tobacco and Philip Morris have launched High Court challenges against the Australian laws, saying they infringe their trademark rights.

Halton told Reuters that she expected that the High Court's decision could come by October.

She also said health must be factored into trade in future.

"When we negotiate new trade agreements, we need to be very clear that the right to protect health of our community is paramount. We will make sure we live up to our obligations under the Framework Convention on Tobacco Control," she told the talks, referring to the WHO's treaty ratified by 174 countries.

Philip Morris' chief financial officer Hermann Waldemer has said he expects more countries to challenge Australia's rules at the WTO, according to a transcripts analyst calls provided by ThomsonReuters Streetevents.

A Philip Morris spokeswoman told Reuters earlier this month that the firm was open to supporting governments that challenge Australia on plain packaging but it was not providing support to Ukraine in its WTO complaint.

(Reporting by Stephanie Nebehay and Tom Miles; Editing by Bob Burgdorfer)

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Australia takes on big tobacco firms in court

"A combo of images, released by the Australian Government Department of Health and Ageing, shows both sides of a generic cigarette packaging with health warnings, taking up 85% of the pack and a minimal border. (AFP Photo/)" title

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Tobacco display ban comes into force in England

"Cigarette packs on display at a kiosk in 2010. A ban on tobacco displays in large shops and supermarkets has come into force in England, meaning such stores must hide cigarettes from public view. (AFP Photo/Gaizka Iroz)" title

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FDA Calls on Tobacco Companies to List Harmful Ingredients

HealthDay – 1 hr 46 mins ago FRIDAY, March 30 (HealthDay News) --The U.S. Food and Drug Administration announced Friday that it will require the tobacco industry to report on a range of toxic chemical ingredients, and to also back up any claims for "safer" tobacco products.

Both actions are preliminary at this point, and subject to a period of public comment.

While there are more than 7,000 chemicals in tobacco and tobacco smoke, the FDA has a working list of 93 chemicals that cause or may cause harm to smokers or non-smokers. These include formaldehyde, nicotine, arsenic, cadmium, ammonia and carbon monoxide. Tobacco companies will be required to list quantities of 20 different ingredients associated with cancer, lung disease and other health problems on consumer-friendly packaging by April 2013.

"For the first time, all tobacco manufacturers will be required to report quantities of potential harmful compounds in every regulated tobacco product they sell in the U.S.," said Dr. Lawrence Deyton, director of FDA's Center for Tobacco Products, during a media briefing. "Tobacco itself contains many chemical compounds, many of which are harmful in raw state but also when smoked."

Exactly how and where this information will be conveyed to the public is not yet known. "We are doing research on how to best communicate that information in a consumer-friendly way to the public," he said.

The second FDA action announced that tobacco companies must back up any claims they make if they want to market a tobacco product as "less risky" to health.

"Products can't be marketed as reducing risks unless that claim is supported by science," Deyton said. At this time, this primarily refers to roll-your-own and smokeless tobacco products.

The Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) gives the FDA the power to regulate certain aspects of tobacco marketing and manufacturing. The preliminary rules are open for public comments until June 4, 2012.

More information

Learn more about the Family Smoking Prevention and Tobacco Control Act at the U.S. Food and Drug Administration.

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