Hit & Run

All for Philip Morris!

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Yesterday the Senate overwhelmingly approved legislation giving the Food and Drug Administration sweeping authority to regulate the production and marketing of tobacco products. The bill incorporates the restrictions the FDA tried to impose unlilaterally under David Kessler, including a ban on color and pictures in print ads. It gives the FDA the authority to prevent the introduction or promotion of demonstrably safer tobacco products if it thinks they will ultimately be bad for "the population as a whole." And it protects Philip Morris' position as the market leader by restricting competition through regulatory burdens and limits on advertising (which is why the No. 1 cigarette maker supports the bill and its competitors oppose it).

The upside, according to senators who otherwise would have voted against the bill: It's tied to legislation that gives $12 billion to tobacco farmers to "buy out" their quotas. The money is supposed to come from an assessment on manufacturers and importers. But under the government-enforced cartel established by the agreement that settled state lawsuits against the major tobacco companies, the industry will simply pass the cost on to smokers. In other words, the assessment amounts to a hidden tax increase on a group that is less well-off than the majority.

Meanwhile, the Environmental Working Group estimates that under a $9.6 billion quota buyout plan approved by the House (financed by cigarette taxes), 10 percent of the tobacco quota holders (not necessarily actual farmers) would receive two-thirds of the money, with 462 getting $1 million or more each. So while FDA regulation may be anti-competitive, sacrificing the interests of individual consumers for the sake of a bureaucrat's idea of "the public health," at least it's part of a deal that steals from the poor and gives to the rich.