The Consumer Federation of the Southeast Presents: "The Cigarette That's Eating Tallahassee"

- Tongue-in-Cheek Web Video Encourages Lawmakers to Close Tobacco Tax Loophole -

April 17, 2009

TALLAHASSEE - "There's a new terror lurking. Horribly huge! Devilishly dangerous! Spewing toxic policy. It's the cigarette that's eating Tallahassee!" That's the opening of a new video released today by the Consumer Federation of the Southeast (CFSE) to raise awareness of a major shortcoming in Florida's tobacco tax policy.

The satirical Web video, inspired by horror movie trailers from the 1950s and 1960s, illustrates how powerful low-priced cigarette manufacturers are blocking an effort to close a loophole in Florida's tobacco tax that could provide additional health care revenue to the state. These cigarette makers are known as non-participating manufacturers (NPMs) because they did not participate in Florida's historic tobacco settlement.

"Cigarettes made by NPMs like Miami-based Dosal carry the same health consequences as other brands of cigarettes, yet NPMs do not have to pay into Florida's Chiles Endowment to fund health programs and anti-tobacco education efforts," said Walter Dartland, Executive Director of the CFSE. "The Florida Legislature needs to act now to close this tobacco loophole to end what amounts to a state subsidy of cheap cigarettes."

Currently, the nation's three largest cigarette companies, Altria, Reynolds American and Lorillard, pay an assessment of approximately 45 cents a pack into the Lawton Chiles Trust Fund as part of Florida's historic tobacco settlement. NPMs do not pay this assessment. This has allowed off-brand cigarette companies to charge less and grow their market share - eating into funding from the 1997 settlement.

At the time of the settlement, the large tobacco companies accounted for 98 percent of the cigarette market share. But the market share of the NPM cigarette companies has grown to as much as 20 percent by some estimates, eroding payments to the Lawton Chiles Trust Fund from $440 million a year to less than $390 million. It's estimated adding a 40-cent assessment to NPMs in Florida could generate $89 million in additional revenue to the state.

To see the "The Cigarette that's Eating Tallahassee" video, go to www.consumerfederationse.com.