THE TOBACCO INDUSTRY SETTLEMENT: UP IN SMOKE; PROPOSED TOBACCO SETTLEMENT WOULD HAVE WIDE-RANGING EFFECTS ON RETAILERS AND SMOKERS

The proposed tobacco settlement has some retailers concerned because it would mean added costs to the nation's convenience stores, grocery stores and other tobacco outlets.

The proposed settlement, negotiated by states, private attorneys and the tobacco industry, would have to be ratified by Congress before it could take effect.

The far-reaching agreement would cost cigarette-makers $360 billion over 25 years and restrict everything from advertising to the sale of tobacco. Under the agreement, tobacco could only be sold behind the counter or from a restricted area that was off limits to those under 18 years of age.

"We would have to spend $100,000 just to remodel our stores to accommodate this," said Paul Dirnberger, managing officer of the Rhodes 101 Stop chain of convenience stores.

Rhodes, headquartered in the Cape Girardeau area, operates 15 stores in Southeast Missouri.

Dennis Marchi, manager of Schnucks in Cape Girardeau, said the settlement restrictions would mean the store couldn't have cigarettes stacked on shelves along aisles as is currently the case.20It would be an inconvenience and an added expense to comply with such a restriction, he said.

Stores could end up offering fewer brands of cigarettes, and some retailers might quit selling cigarettes entirely, he said.

For those that continue to sell cigarettes, the added cost of doing business ultimately would get passed on to the consumer, he said.

Marchi, however, isn't looking to change store operations yet since any agreement must make its way through Congress first.

"I am not getting excited about it until it passes, and then we can go from there," said Marchi.

The proposed settlement includes a nationwide licensing system for all tobacco-sellers.

Dirnberger said his business already has to deal with lots of government red tape. A new licensing system would add to the red tape, he said.

Still, the Rhodes company isn't looking to get out of the tobacco business.

Cigarette sales account for 28 percent of total business at Rhodes convenience stores.

Dirnberger said if the government is going to so stringently regulate cigarettes it might as well ban them.

"Where does it stop?" he questioned. "Are we becoming a police state where everything is controlled by the government?"

Dirnberger said the company is sympathetic to keeping tobacco out of the hands of children, but there already are laws and regulations restricting tobacco sales.

Federal Food and Drug Administration regulations prohibit the sale of cigarettes, cigarette tobacco and smokeless tobacco to anyone under 18.

Stricter regulations were imposed in February. "We have got to card them if they are under the age of 27," Dirnberger said.

Retailers bear the brunt of the regulations, he said.

It isn't illegal for persons under 18 to smoke. "They can walk down the street smoking a cigarette," he said. They just can't buy cigarettes.

"Their parents can come in and buy it for them," Dirnberger said.

Teen-agers often get their friends to buy packs of cigarettes for them. The friends turn around and sell a pack of cigarettes for $5 to the underage smoker.

Some young smokers won't take no for an answer. "We have had real problems with thievery because we won't sell it to them," Dirnberger said.

The proposed settlement comes at a time when Congress is already looking at tighter regulations on tobacco use.

The National Association of Convenience Stores has opposed licensing in the past. But it has embraced a licensing plan being considered by Congress because it offers an alternative to more burdensome FDA regulations such as having to place all tobacco products behind the counter.

Former smoker Linda Hurt likes some provisions of the proposed settlement, such as requiring tobacco companies to fund stop-smoking programs for those who want to quit.

She also said today's smokers shouldn't be allowed to sue the tobacco industry.

"I feel like those individuals had a choice," said Hurt, a 46-year-old Cape Girardeau audiologist. "Since the '60s we have known that tobacco has been harmful to you."

Still, she believes the tobacco companies were deceitful in the past in denying the health risks of smoking.

Hurt started smoking when she was 15. She has quit at least three times, once for seven years.

But in January she quit smoking for what she said is the final time. So far, she has managed to stay smoke free.

She doesn't think teen-agers should smoke. "I am very much against teens smoking and advertising to try to get them to smoke," she said.

"I was a closet smoker when my kids were little," said Hurt.

"I first quit when I was 29. My son begged me to quit and now he is a smoker," she said.

"I think it just really is a nasty habit," she said.

DETAILS OF PROPOSED SETTLEMENT

TOTAL AMOUNT OF SETTLEMENT

* Tobacco combanies play $360 billion in the first 25 years, and then $15 billion -- $7 billion to the states and $3 billion for public health measures.

NICOTINE REGULATION

* The Food and Drug Administration could regulate nicotine as a drug but could not ban it until 2009 and even then would have to ensure that a ban would not cause a significant cigarette black market.

CIGARETTE COMPANIES' LIABILITY

* All class-action lawsuits against the industry are banned.

* The settlement would end 40 state suits that seek to recover Medicaid money spent treating sick smokers.

* Individual smokers' suits now in court would not be halted.

TOBACCO MARKETING

* No billboards or other outdoor ads.

* No humans or cartoons in ads or on cigarette packs, ending Joe Camel and the Marlboro Man.

* No internet advertising.

* A cigarette vending machine ban; tobacco sold only behind store counters.

* A nationwide licensing system for all tobacco sellers.

SMOKERS

* Industry will pay fines in youth smoking fails to drop by 30 percent in five years, 50 percents in seven years and 60 percent in 10 years. The penalty is $80 million per percentage point by which the target is missed. The yearly fines would begin in 2002.

* Civil penalties of up to $10 million for violations of obligations to disclose research about health effects.