Senator wants to block gray-market tobacco

JEFFERSON CITY, Mo. -- A state senator has made good on his vow to back legislation banning the sale of certain less-expensive tobacco products.

Sen. Bill Kenney is sponsoring legislation to outlaw sales of so-called gray-market cigarettes, which are manufactured overseas for sale abroad but are also sold at low prices in the United States.

Kenney, R-Lee's Summit, filed the measure after a judge threw out a ban enacted last year, ruling that it was improperly included in a bill that addressed a different topic. The Missouri Supreme Court has been asked to hear an appeal of that ruling by Cole County Circuit Judge Thomas Brown.

Kenney's current bill was considered last week by the Senate Environment and Commerce Committee, which did not vote on it. He said he wanted to have legislation ready in case Brown's ruling stands.

Under the legislation, violations of the ban would be a felony with a maximum penalty of five years in prison.

Challenged by retail chain

Last year's version was challenged in court by Dirt Cheap Cigarettes and Beer, a 13-store retail chain in the St. Louis area. The company said such a ban would violate federal interstate commerce laws while also giving large tobacco companies the power to control cigarette sales.

Lobbyists for tobacco giants Philip Morris and R.J. Reynolds both spoke in favor of the legislation. They said the companies' foreign-made cigarettes are of lower quality and might turn off longtime U.S. customers if they were sold in this country.

Fred Teutenberg, president of Dirt Cheap, said the state legislation "goes beyond the federal statute" passed in 2000 that also addressed certain cigarette sales.

The federal law did not ban gray-market cigarettes, Teut-enberg said. Rather, he said, it banned production of cigarettes domestically that are shipped to international waters, then brought back for resale at low prices.

Craig Taylor, owner of U-Gas, which operates 15 stores in the St. Louis region, also spoke against the bill.

"It boils down to big business versus small business," Taylor said. "This is your opportunity to wave the flag for small business."

With the legislature adjourned until April 2, the bill still has to be voted out of committee before debate can begin in the full Senate.

If approved there, it would have to go through a similar process in the House and potential negotiations before being sent to the governor for consideration.

The regular legislative session is scheduled to end May 17.

Gray market bill is SB1266 (Kenney).