One can quite imagine how the Governors of the US states that signed the Tobacco MAsters Settlement Agreement broke out the champagne:
- We just gained our states $246 billion income,
- We can tell the anti-smoking zealots we won,
- We can tell our voters that we gained them all this money.
They were probably all lighting up cigars as they celebrated.
The cigarette company moguls were probably breaking our French champagne and smoking bigger cigars:
- We saved all those costs we were paying lawyers and would have been paying in the future,
- The idiots (read Governors) did not fine our wealth – past income – as a law suit would have, but only asks for the fine out of future income (20 years) so we simply pass on the costs to the consumers by increasing the price,
- We save ourselves a lot of advertising and marketing costs – they did not ask that this saving is used to pay the MSA money.
In fact, they probably also realised that now they can get other countries to follow the example of the USA. After-all the USA is the example that the rest of the world follow blindly.
In other countries no lawsuit has been brought against the cigarette companies. No other country has a constitution that allows for Tort actions. So the cigarette companies are reasonably safe against lawsuits.
In other countries they did not sign a Masters Agreement and have not paid any money as a ‘fine’.
Yet, they can now get these countries to also ban marketing activities and save a fortune on costs. Happy Days.
Let us take a country like South Africa – just because I know it:
- Lung cancer is not a major cause of mortality. The bigger causes are infant diseases, malaria, TB and AIDS.
- The economic costs of AIDS is massive compared to the cost of lung cancer because lung cancer affects the elderly – retired – people whilst AIDs affect the working population aged 30+.
- There has never been any lawsuits brought against cigarette companies.
- Yet marketing by cigarette companies is vigorously banned by the law makers.
- When the anti-marketing laws were enacted BAT suddenly bought Rembrandt – the company that had a near monopoly in the cigarette market. (Why?)
- Would it not have been much,much better to set up mechanisms whereby the cigarette companies finance AIDs or TB research and prevention? Or, simply the hospitals?
- Yes, let them stop advertising but ask for that money to be paid to the state – not as a tax ,because taxes get passed to the consumers.
IN THE USA
It seems that the zealots in the USA have woken up to what they did in the USA, 12 years after the MSA was signed.
The agreement stated that the Tobacco companies were to pay $206 billion over the first 25 years – but the agreement is intended to go on in perpetuity.
Thus we are halfway down the line and the actual payment is now set at $246 billion.
Not surprisingly there is now a certain amount of post-purchase dissonance setting in among the zealots.
They probably realise that their income stream is not going to last forever. After all, the tort cases against the tobacco companies were especially reliant on the claim that smokers were misled to believe that smoking is not unhealthy or were drawn to smoking by advertising and marketing. Well as time passes with all the anti-smoking activities funded by the MSA’s $246 billion there is no-one that can claim they were not warned. This means, of course, that the chances of any tort lawsuit, or individual lawsuit, succeeding is minimal. So why would the tobacco companies renew the agreement?
Many zealots are making a lot of money personally out of the MSA’s $246 billion. This much money does not float around without many people being involved in administering it. When this flow stops then they are also out of jobs.
Not surprisingly there is a lot of infighting among the administrators to each get more of this fund allocated to their budgets – or themselves.
I was not aware of this, and do not have the details, but there is a move by the administrators to have the MSA declared illegal.
It seems that for any tort settlement to be legal the US Senate has to have signed it. This was not done in the rush by the original Governors of the states that came to the agreement. (Presumably the cigarette companies were so elated by the terms of the agreement that they did not insist on this detail – it is unlikely their lawyers would have missed such an important point.)
Here is a nice clip from Youtube about exactly what I am talking about.
I do not know why they want to now declare the MSA illegal except if they believe that they will be able to get more money out of the cigarette companies.
Presumably this action involves a lot of lawyers. These lawyers are paid for by the anti-smoking activists using the funding they get from the MSA – which they want to declare illegal.
I am not a lawyer, but I would have thought that if the MSA is declared illegal then the tobacco companies have a very good case to claim back the money that they have paid the states over the past 12 years as having been obtained from them by illegal means. This will most certainly pay for many lawyers private jumbo jet since the money would have to be recouped from each state independently. PResumably as each state loses its case it will lose with costs – so it will be the tax-payers, not the smokers that pay.
What a can of worms with unintended consequences we are going to see.
I have refered to Christopher Snowdon (author of Velvet Glove Iron Fists) extensively in several places. David Goerlitz was the Winston man in advertisements during 1982 and 1988. Goerlitz felt that what he did, encouraging the youth to smoke, was wrong and joined the anti-smoking league traveling to schools telling the youth not to smoke. However, over time he became disillusioned with the movement and expresses this disillusionment in an interview with Snowdon. (see the full interview here).
Here are extracts.