Virginia tobacco farmers turn to Christmas trees

Christmas is indeed a jolly time of year for some former Virginia tobacco farmers who have switched to a more health-friendly crop.
A Christmas tree grower fells a tree at Little Down Farm at Westfield near Hastings in southern England, December 15, 2010. REUTERS/Luke MacGregor
By Matthew A. Ward
PORTSMOUTH, Va | Thu Dec 22, 2011 10:52am EST
(Reuters) – Christmas is indeed a jolly time of year for some former Virginia tobacco farmers who have switched to a more health-friendly crop.
On a 25-acre Christmas tree farm at Mouth of Wilson, in remote Appalachian Virginia, Ron Cooper has a spring in his step as he awaits the arrival of his seasonal workers.
It’s just after 8 a.m. on a weekday, and the crew will go to work planting Fraser Fir seedlings, which Cooper says are by far the most popular Christmas tree.
The 60-year-old is going out on a limb planting this time of year, having never done so before. He hopes the seedlings, while withstanding the cold, will not dry up and die as he says often happens to crops sown in the summer.
Cooper grew tobacco on “anywhere from five to six acres” for about 15 years, last growing it in the early 90s, before deciding he would be better off concentrating on the Christmas tree business.
The tobacco growing habit skipped a generation because his grandparents grew the crop but not his parents.
“We didn’t have enough property other than to keep two or three milking cows and two hogs to kill every year, and some chickens,” Cooper said of his upbringing.
He said he had “lived from payday to payday” working in a factory before going into tobacco, and while growing tobacco he also had to cut and sell firewood and freelance with his tractor.
“Anything for a buck,” Cooper said. “You had to be a jack of all trades to get by.”
Tobacco has been grown in Virginia since 1612, when Englishman John Rolfe discovered how well the plant was suited to the then colony and how profitably it sold back in the mother country.
Before deregulation in 2004, the federal government had provided tobacco quotas and price supports since the 1930s, making tobacco Virginia’s number one crop.
But then came a buyout, included in a corporate tax legislation bill signed into law in the fall of 2004, that included $9.6 billion in compensation for growers to make up for the quotas and subsidies lost through deregulation, according to North Carolina State University.
Flue-cured tobacco acreage plummeted from 30,000 acres in 2004 to 17,050 in 2005 as some quota owners used the compensation to find other ways to farm their land, a Virginia Tech research paper found.
Data on how many Virginia tobacco farmers went into Christmas trees — as Cooper already had initially in 1979 — is unavailable, but “only a handful” were growing them in Virginia in the 1980s, according to retired Virginia Department of Agriculture extension officer Charlie Conner.
Fast forward to 2007, and the agriculture census of that year, which will be updated in 2012, reported 481 Christmas tree farms in Virginia covering 9,414 acres, and 313,710 trees cut.
This season is “slightly on the upswing” from 2010, Virginia Christmas Tree Growers Association President Virginia Carroll said. “We are (still) impacted of course by the economy, but it looks like we’re doing all right,” she added.
Conjuring a quintessential North American Christmas scene of moms, dads and children inspecting rows of trees before having one fastened with twine onto the car roof, Cooper said he used to sell his own trees direct from lots around Virginia Beach.
Now he runs a choose-and-cut operation and wholesales, growing close to 4,000 trees on 10 to 12 acres. Cooper said a Christmas tree costs approximately $9 to grow and returns $21 for a six-footer, taking seven or eight years to produce.
“You’ve got to plant every year, or at some point you’ll miss a payday,” he said.
Cooper said he’ll keep doing what he does while he still can. One aspect of Christmas tree farming he particularly enjoys is the company of his seasonal workers, mostly Mexicans legally in the United States under work permits.
“The guys that help me have steady jobs and I can only get them on their days off,” he said. “To me they’re just the finest people in the world to be around; I’d sooner spend time with the guys that work for me than anybody around.”
Cooper said his 63-year-old wife, Donna, works in a factory but takes a week off around Thanksgiving, when trees are loaded and sent to market, to help on the farm.
They are finding the financial rewards better from Christmas trees than they had from tobacco, whose 2011 flue-cured acreage in Virginia is — incidentally — set to increase from 17,500 acres in 2010 to 18,500 acres.
But Cooper maintains that tobacco played an important role in helping families survive.
“As far as I’m concerned, tobacco was a non-healthy crop … but if it hadn’t of been for tobacco, lots of people would have struggled even more than they did here in the mountains,” Cooper said.
By Matthew A. Ward
reuters.com

Tobacco Companies Think Their Trademarks Are More Important Than Your Health

Back in January of this year, Techdirt reported on tobacco companies suing a local Australian importer of their products for covering up part of their logos with a mandatory health warning. At the time, a spokeswoman for the company involved, British American Tobacco, said:
As the matter is currently before the Court, BAT is unable to comment other than to say that this is a further demonstration that we will take all necessary steps to protect our valuable intellectual property.
Given that stance, it will come as no surprise to learn that tobacco companies are now threatening to take on the European Commission as well:
EU Health Commissioner John Dalli will face legal action if he tries to reproduce Australia’s plain-packaging proposals for cigarettes in Europe, a tobacco industry representative warned this week.
The approach is the same as in Australia:
One likely focus of attack is intellectual property rights, since plain packaging has a smothering effect on companies’ logos and trademarks.
I’d like to think that the word “smothering” was taken verbatim from some tobacco company representative, because it sums up nicely the industry’s attitude: that any breathing difficulties or respiratory diseases that you may develop as the result of smoking pale into insignificance compared with the outrageous “smothering” of their logos and trademarks.
That’s a particularly callous attitude, because those logos and trademarks are only valuable to the degree they have been attached to products that have caused death and disease: the “best” brands are those with a track record of selling – and hence killing – more people than rival products. In effect, the tobacco companies are complaining that all their hard work getting people addicted and smoking themselves to death will be wasted if the plain-packaging proposals for cigarettes are implemented.
The cynical posturing of tobacco firms as the victims in these continuing attempts to undo and avoid the social harm they cause underlines once more how easily intellectual monopolies can be twisted for purposes far from any original justification they may once have had. Patents can kill: so, it seems will trademarks, if tobacco companies get their way.
techdirt.com

Auditor slams waste in $284-million federal tobacco program

The auditor-general says a $284-million program to get Ontario farmers out of the tobacco-growing business became a confusing fiasco.
Interim Auditor-General John Wiersema says the 2008-2009 Tobacco Transition Program was not well-planned and the department got flim-flammed.
More than half the people who received money weren’t active tobacco farmers at the time, although they were entitled to grow it under the quota system run by the provincial Tobacco Marketing Board.
Some farmers ended up taking money to get out of the business, then shifted their land and equipment to relatives who kept on growing tobacco.
Tobacco production doubled the next year.
The report says Agriculture Canada tried to change the rules to stop some of this, but that just caused more confusion.
The audit says Agriculture did not anticipate the problems that arose and that producers didn’t understand the purposes of the program.
Agriculture Canada relied on the provincial marketing board to deliver the program, but the audit said that was a conflict of interest because the board is supposed to represent the interests of tobacco farmers.
“The department had to develop the Tobacco Transition Program within a short time frame and did not first conduct a thorough risk analysis,” the audit said.
“The agreement implementing the program did not provide clear terms and conditions to ensure that recipients would not enter into business arrangements that would undermine the intent of the program.”
theglobeandmail.com

Big Tobacco launches legal fight with govt

The Gillard government’s plea to Big Tobacco not to launch legal action against Labor’s plain-packaging laws has fallen on deaf ears, with Philip Morris announcing it has already served notice of a dispute.
The federal parliament on Monday passed world-first laws that will force all cigarettes to be sold in drab olive-brown packs from December 2012.
Health Minister Nicola Roxon immediately demanded that Big Tobacco respect that mandate.
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“We know that just as many smokers are addicted to tobacco and nicotine the tobacco companies are addicted to litigation,” Ms Roxon told reporters in Canberra.
“But I call on them today to consider respecting the will of the parliament.
“Both houses, and all parties, have supported this legislation.”
But less than an hour later, Philip Morris announced it had already begun legal proceedings using a bilateral investment treaty Australia signed with Hong Kong 20 years ago.
“The notice of arbitration was served on the government immediately following the passage of plain-packaging legislation for tobacco products by the Australian parliament,” parent company Philip Morris Asia Limited said in a statement from Hong Kong where it’s based.
Philip Morris forewarned the government of its plan in late June, when it entered a three-month mandatory negotiation period through the United Nations commission on international trade law.
The cigarette manufacturer argues the commonwealth is effectively planning to steal the company’s brands in contravention of the investment treaty.
Philip Morris said on Monday that damages could run to billions of dollars and the legal process could take “two to three years”.
“In passing the laws today, in our view, the government has breached an international treaty,” Philip Morris spokesman Chris Argent told AAP.
“Plain packaging will damage the value of our brands and there are international business laws against that.”
But legal experts believe things aren’t that clear-cut.
A lawyer who’s had more experience than most fighting cigarette companies in court, Peter Gordon, told AAP in late June that Philip Morris was actually on shaky ground.
Mr Gordon argued that the commonwealth wasn’t taking away the property rights of tobacco companies but rather ensuring they weren’t used to improperly promote cigarette use among kids.
At the same time, international law expert Don Anton noted that public regulation for a public purpose was not direct or indirect expropriation “and therefore is not prohibited by the investment treaty”.
Philip Morris, like British American Tobacco Australia (BATA), also plans to launch domestic action in the High Court of Australia.
Ms Roxon was asked on Monday if legal action would delay the start of plain packaging.
“We don’t believe that it needs to,” she replied.
“(But) I’m not going to go through the legal ins and outs and possibilities as we potentially face litigation in lots of different forums.”
By Julian Drape
news.smh.com.au

Should cigarettes be linked to CPI?

Most economics textbooks say that governments cannot cut down the smoking rate through price adjustments because demand of the unhealthy products is not reflective of the cigarettes costing more.
Basically, a vast majority of smokers keep smoking despite a spike in price per pack since it is an addiction similar to illicit drugs.
Yet, experts point out that common sense in economics does not apply to the real world a full 100 percent and the correlation between prices and smoking rates is quite strong.
This means that Korea is required to come up with an alternative strategy to reduce the number of smokers ― instead of focusing merely on the expansion of no-smoking areas and carrying out anti-smoking campaigns. It has to push up the cost for smokers through heavier taxes.
Asia’s fourth-largest economy raised taxes on cigarettes by 500 won per pack in 2004 and prices have nearly stayed the same since.
“The smoking rates are closely correlated to cigarette values as demonstrated by the data of the Organization for Economic Cooperation and Development (OECD),’’ professor Lim Byung-in at Chungbuk University said.
“The economic logic that lower prices lead to stronger demand works in the tobacco markets. In order to slash social expenses associated with smoking, Korea needs to lift the amount of won spent to light a cigarette.’’
Among the 30-plus OECD members, Korea ranks 30th in cigarette prices to be burned with the 7th highest smoking rate of 25.8 percent as of the end of last year.
Mexico has a similar problem as the Central American country ranks 28th in tobacco price and third in smoking rates.
In contrast, Ireland sells the most expensive tobacco products and ranks 11th in smoking.
“According to a report from the World Bank, non-price measures would cost 7.8 to 155.8 times more compared to fiscal measures in achieving the same effect on the war against smoking, which will eventually burden taxpayers,’’ a Seoul analyst said.
“The report also says that every time the price of tobacco products rises by 10 percent, the smoking rate drops by 4 percent. In addition, the World Health Organization claimed that the most effective way to curb smoking incidence is to raise costs for smokers through higher taxes.’’
Cold turkey vs gradually
Prof. Lim contends that the Seoul administration government has actually decreased the tobacco value over the past several years because the tax scheme has remained the same since 2004.
Earlier this year a pair of global brands hiked the price of their products by 200 won per pack. The remaining brands are available here at the same price tag of 2,500 won for a package of 20 cigarettes.
“In consideration of inflation, tobacco prices are cheaper now than in 2004 in real terms. As a result smokers are encouraged to continue their habits,’’ Lim said.
“Furthermore, as people’s incomes go up, the proportion of smoking costs in their overall expenditures go down. They hardly have any financial reason to stop smoking. We need to change this incentive system.’’
Then, there would be two options when ratcheting up taxes, either slowly or all at once. Experts argue that the former would be the better way because a sudden sharp increase would invite a backlash such as illicit trading including tobacco smuggling as well as great resistance from the public.
Happy medium ― CPI-linked taxation system
To phase in taxes, Lim suggests that cigarette prices should be aligned with the consumer price index (CPI), which he says worked effectively in such countries as Australia.
In 1983, Australia introduced the CPI-linked taxation system, under which tobacco taxes are adjusted in February and August every year to reflect the rise in consumer prices.
A survey conducted there every three year shows that smoking dipped to 16.6 percent in 2007 from 21.8 percent in 1998 and the size of the tobacco market shrank to 22.7 billion cigarettes from 27.5 billion during the same period.
Deterrents in introducing the CPI-linked taxation system are that the Lee Myung-bak administration has tried to seek policies benefitting the lower class and is concurrently grappling with high inflationary pressures.
“The incumbent administration has sought to avoid the image of being friendly to the haves rather than have-nots. Accordingly, it would be difficult to raise the price of tobacco as smoking is more common among the middle and lower classes than the rich,’’ Lim said.
“It also worries about the soaring inflation rates of late. Topping other things off, however, the government should think of high social costs caused by smoking. It has to put first health of the general public rather than political and economic causes no matter what they are.’’
By Kim Tae-gyu
Koreatimes

Bulgaria Signs Contract to Sell Bulgartabak to Russia’s VTB

Bulgaria signed a contract with a unit of Russia’s second-largest bank OAO VTB to sell a majority stake in Bulgartabak Holding (57B), ending a fourth effort in 12 years to sell the biggest state-owned tobacco maker.
The buyer of the 80 percent stake for 100.1 million euros ($136.6 million), Austrian-registered BT Invest GmbH, must continue producing tobacco and cigarettes and avoid insolvency during the next 10 years, the asset-selling agency in Sofia said in an e-mail today, citing the contract. VTB was the sole bidder in the tender after British American Tobacco Plc (BATS), Europe’s largest cigarette maker, pulled out.
This is Bulgaria’s biggest sale of state assets since the government of Prime Minister Boiko Borissov took office in 2009. The European Union’s poorest country by per-capita gross domestic product needs to raise cash to narrow its budget deficit and meet increasing social benefits payments ahead of October presidential and local elections.
“This was the longest and most condemned privatization in Bulgaria’s history, which cost the jobs of several ministers because of political opposition,” Nikolai Vassilev, the chief executive officer of Expat Capital investment company in Sofia, said by phone today. “I’m glad this government had the will to close the deal.”
Vassilev served as economy minister between 2001 and 2003 in the Cabinet of Simeon Saxe-Coburg Gotha and resigned following a failed attempt to sell Bulgartabak, he said. His successor Lidia Shuleva, was also forced to quit in 2005 after British American Tobacco dropped a 200 million-euro offer for Bulgartabak’s three biggest plants because the bid was challenged by opposition parties and Saxe-Coburg Gotha’s coalition partners.
VTB committed to keeping its stake in the tobacco company for the next five years and maintain the number of employees at the current level of 2,400 people over the next three years, the agency said.
BT Invest offered to invest an additional 2 million lev ($1.39 million) in the first year of operation and a further 5 million lev in the second year, the state-asset company said in an e-mail. It also committed to buying 5,000 tons a year of locally grown tobacco over the next five years.
Bulgartabak controls 30 percent of the domestic market with its six units, including four cigarette makers and a trading division. The company had net income of 34.1 million lev in the first six months of this year as revenue rose 78 percent and exports grew 30 percent, the Sofia-based company said on July 26.
By Elizabeth Konstantinova
ekonstantino@bloomberg.net

How the tobacco industry hides behind lobbyists

The tobacco industry is covertly using third-party companies to lobby against smoking restrictions and to gain access to health documents held by public organisations.
Public relations companies and law firms are working on behalf of anonymous multinational tobacco companies without declaring who their clients are, according to an investigation by The Independent.
The third parties have refused to confirm they are working on behalf of tobacco firms when they make freedom of information requests from universities and other public bodies, even though the third parties are demanding more openness from their targets.
The public relations company Bell Pottinger and the London law firm Clifford Chance have both requested information from public organisations without making it clear they are working on behalf of tobacco firms.
The Irish PR company Hume Brophy has also carried out a lobbying campaign against the Government’s ban on cigarette displays in shops on behalf of the National Federation of Retail Newsagents without stating that the campaign was being funded by the tobacco industry.
The Independent has established that Alex Deane, a former chief-of-staff to David Cameron, played a key role in attempts to use the freedom of information law against one public organisation involved in promoting awareness against the health dangers of roll-up tobacco. Mr Deane is a director of Bell Pottinger which earlier this year requested documents from a health-awareness organisation funded by the NHS, the Bristol-based Smoke Free South West, following a campaign it ran against roll-up tobacco, which is popular in that part of the country.
Soon after this informal request, Smoke Free South West received a formal freedom of information request for the same documentation from Big Brother Watch, a right-of-centre libertarian group founded by Mr Deane.
Neither Bell Pottinger nor Big Brother Watch declared to Smoke Free South West that they had held discussions with one another or with Bristol-based Imperial Tobacco, which is listed as one of Bell Pottinger’s clients in the PR firm’s website, and makes Golden cigs4us.biz/virginia-cigarette rolling tobacco and Rizla cigarette papers.
Mr Deane was not available for comment yesterday; Bell Pottinger said he was on holiday. David Petrie, the Bell Pottinger executive who sent the email requests to Smoke Free South West, did not return calls. Daniel Hamilton, a director of Big Brother Watch, refused to confirm or deny that his organisation had been in contact with Bell Pottinger or Imperial Tobacco over the FOI request to Smoke Free South West. “We don’t work on behalf of other groups. We only work on behalf of ourselves… We’ve got no formal links with anyone in the tobacco industry,” Mr Hamilton said.
This week, The Independent revealed that tobacco companies had demanded access to confidential university research papers on teenagers’ attitudes to smoking, as well as meetings within the Department of Health between government officials and experts on smoking and health.
Stirling University, which carries out research on behalf of the Health Department and Cancer Research UK, said Philip Morris, the makers of cigs4us.biz/marlboro-cigarette, was attempting to access thousands of confidential interviews with British teenagers.
The FOI request was initially made in 2009 through the London law firm Clifford Chance, which tried to keep the identify of its client confidential. However, under the Scottish Freedom of Information Act, which is slightly different to the English Act, a third party must name the client it is working for – in this case Philip Morris.
A spokeswoman for Clifford Chance said she could not comment on whether the law firm was carrying out any further freedom of information requests on behalf of tobacco companies. Under the English FOI Act, third parties can work on behalf of anonymous clients.
Hume Brophy, the Irish public relations company, admitted it was a mistake to conduct a parliamentary lobbying campaign against cigarette displays in shops without making it clear it was paid for by the tobacco industry. In a letter to Stephen Williams MP, John Hume, a partner in the company, said that it will not happen again.
Martin Dockrell of the campaign group Action on Smoking and Health said that the tobacco industry’s use of “front” organisations was nothing new.
“Big Tobacco’s dirty little secret is how they get others to do their dirty work,” Mr Dockrell said. “Some front groups are pretty much wholly owned subsidiaries; some appear to be independent but tobacco companies pay the bills and pull the strings.”

Philip Morris: tobacco firm using FOI laws to access secret academic data

Philip Morris International has tried to force the University of Stirling to hand over secret data into teenage smoking and cigarette marlboro cigarettespackaging gathered over more than a decade.
The manufacturers behind the cigs4us.biz/marlboro-cigarette, have used Freedom of Information laws to gain access about 6000 confidential interviews undertaken with teenagers as young as 13, which discuss their views on smoking and tobacco.
The interviews, undertaken by the University’s Institute for Social Marketing unit since 1999, formed the basis for two major studies that analysed the negative effects of cigarette packaging and marketing on British youths.
The studies, published in the Journal of Adolescents, the European Journal of Public Health and the Tobacco Control journal, examined why teenagers started smoking and what they thought of marketing by tobacco companies.
Critics accused the company of misusing public information laws to gain access to information for commercial gain.
Academics said that handing over the information would be a major breach of confidence and could jeopardise future research.
But the company defended its request as entirely legal and legitimate to gain access to information “of interest”.
“We have not been broken any laws. Frankly we have requested some information, legitimately, on an issue that is of interest to us,” one executive told The Daily Telegraph on Wednesday night.
According to the university, Philip Morris’ made requests to gain access to the information in 2009, which was initially refused because it was mady anonymously through its lawyers.
But after another request was lodged that same year, the two organisations have fought a battle over the information, which culminated in mediation by the Scottish Information Commissioner this year.
In June the commissioner’s office said the university’s reason for refusing to hand over the information, because the request was considered “vexatious”, was not a correct reason and ordered it to issue another response.
The university has since refused the request because it believes it will cost too much money to process.
Under FOI laws, organisations can refuse to hand over information if it believes it will cost a certain amount, general no more than several hundred pounds.
Prof Gerard Hastings, 57, who co-authored the studies with Prof Linda Bauld, said he was “very angry about it indeed on a number of levels”.
He said it was “deeply concerning they are even trying to get this data” because if the company gained access to the data it would have “enormous implications for academic freedom”.
“First of all it is an abuse of the FOI legislation,” said Prof Hastings who is director of the university’s Centre for Tobacco Control Research.
“I don’t think for a moment that Parliament had this in mind when it created their laws.
“But also these young people shared their inner most secrets about this. They shared their confidences and we explicitly told them that we would treat this data as confidential and that it would be restricted to the research.”
He added: “I am not over-egging this. We are talking about behaviours that they have not told their parents about – they are not supposed to be doing this.
“But also, particular when buying cigarettes, they are (breaking) the law.”
The centre was established in 1999 by Cancer Research UK and aims to discover why children start smoking.
One of the researchers has also received anonymous phone calls trying to discredit her work, though there is no suggestion they are linked to PMI in any way at all.
A University spokesman said all requests made under the FOI Act were treated fairly.
“If we receive a Freedom of Information request we treat it fairly and honestly and respond within the normal time scale,” he said.
In a statement Peter Nixon, Philip Morris’ vice-president of communications confirmed the company had sought information to “understand more about a research project conducted by the University of Stirling regarding plain packaging for cigarettes”.
He said it was an appropriate request to a public institution and that the Scottish Information Commissioner had concluded was not “designed to cause disruption or annoyance to the University”.
“We are not seeking any private or confidential information on any individuals involved with the research,” he said.
“As provided by the freedom of Information Act, confidential and private information concerning individuals should not be disclosed.”
It is not known whether the company will appeal the university’s latest decision.
By By Andrew Hough

Officials want to prevent sale of Mocksville tobacco companies

The National Association of Attorneys General wants to stop the sale of all the assets of three bankrupt Mocksville tobacco companies to a Raleigh firm.
The group filed an objection Wednesday with U.S. Bankruptcy Court on CB Holdings LLC’s $15.6 million deal for Renegade Holdings Inc., Renegade Tobacco Co. and Alternative Brands Inc.
The deal, announced July 11, was projected to close Oct. 30. The Davie manufacturers have a combined 100 employees.
The association is involved because the 16 state attorneys general represent the largest unsecured creditor group.
It also has opposed a reorganization plan for the companies, citing a criminal investigation in Mississippi — at least 3 years old — involving Calvin Phelps, the owner of the companies, and accusations of “unlawful trafficking in cigarettes and other related crimes.”
It said the proceeds from selling the companies could be higher if the bankruptcy trustee, Peter Tourtellot, allowed for the escrow rights of Alternative to be sold separately.
After the landmark 1998 Master Settlement Agreement between 46 attorneys general and major U.S. manufacturers, smaller cigarette makers emerged, grabbing significant market share because they could sell cigarettes for less.
The states have passed laws aimed at reducing the smaller manufacturers’ competitive advantage by forcing them to put money into escrow in case they are sued by the states.
“The settling states’ knowledge of sales of nonparticipating manufacturers’ escrow rights owned (by others) indicated there is a market for such assets,” the association said.
It said the sale price for other escrow rights “has greatly exceeded the 23 cents on a dollar” that the CB Holdings offer represents. Prospective buyers for the escrow rights “are unlikely to have an interest in buying the other sale assets,” it said.
The association said the sale should be “direct to entities the states reasonably believe may be interested in buying the escrow rights and/or tobacco-manufacturing operations.”
Charles Fuller, president and chief executive of CB Holdings, has said the operations would remain in Davie with no changes except for the Renegade and Alternative Brands names. He could not be reached for comment Thursday.
CB Holdings owns Firebird Manufacturing LLC, a manufacturing company in South Boston, Va., and Cherokee Brands LLC, a sales and distribution company recently renamed from Cherokee Tobacco Co.
Tourtellot said when the deal was announced that combining the companies is the best solution.
“It protects the jobs of our employees in Davie County and puts two companies together that will be a much stronger player in the tobacco industry as opposed to individually,” Tourtellot said.
The manufacturers filed for Chapter 11 bankruptcy protection Jan. 29, 2009, and exited bankruptcy June 1, 2010.
They were put back into bankruptcy July 19, 2010, when the reorganization plan was vacated, in large part because of the criminal investigation.
Phelps also is facing a lawsuit alleging he made a fraudulent transfer of $8.1 million in assets from the three companies and used it to help buy six parcels of land, as well as Chinqua-Penn Plantation, two corporate jets, cigar-manufacturing equipment and a 2008 Maserati Quattroporte.
By Richard Craver
rcraver@wsjournal.com
(336) 727-7376

Californians want to allow local taxes on cigarettes, other products

Nearly 60% of those polled support changing state law to allow voters to approve local taxes on cigarettes, sugary drinks, liquor and tax productsoil pumped from the ground.
Californians would let local officials put new taxes on cigarettes, sugary drinks, liquor and oil pumped from the ground if voters in their communities said it was OK, a new poll shows.
Local governments cannot tax such products in California now. But a proposal being vigorously debated in the Capitol would allow cities, counties and more than 1,000 school boards to add their own levies and give local voters final say. Nearly 60% of those polled supported such a change.
The sentiment spanned all age groups and every region of the state, according to the bipartisan survey by The Times and the USC Dornsife College of Letters, Arts and Sciences.
“Leave it up to the locals,” said Paul Greenberg, a 54-year old Democrat in San Diego who said he was semi-retired. “Let the people vote on it. I don’t see anything wrong on that.”
Cities and counties do have some tax authority. Both can bump up sales taxes with voter approval, for example. Cities can enact hotel or utility taxes. And school districts can ask for voters’ blessing to introduce or raise parcel property taxes.
But some lawmakers, citing the retrenchment made necessary by years of budget cutbacks in Sacramento, say it’s time to grant local authorities more power to raise revenue.
“We have a responsibility to give counties and school districts the tools they need to fund public services,” said state Senate President Pro Tem Darrell Steinberg (D-Sacramento).
He and others argue that municipalities need more money to preserve schools, healthcare and police. Business groups have lined up against the idea, saying higher taxes would hurt the economy and stifle prospects for job growth.
After voters in the survey were presented with both sides’ arguments, support for new local tax powers dipped only slightly, from 58% to 55%. Nearly two-thirds of Democrats, 64%, approved; 42% of Republicans did.
Joanne Holt agreed with Steinberg. The retired teaching assistant from North Highlands, outside of Sacramento, said she doesn’t want to see public safety or schools hurt further by the state’s persistent financial troubles. If more tax authority for city councils and school boards is the answer, so be it, said the 69-year-old Democrat.
“It’s more important that the children get an education,” she said. “They’re our future.”
Another in favor was Republican Jamie Blossom, 47, a state disability insurance representative in Diamond Bar. She liked the idea that local tax money would stay in her community, where “I have a much bigger voice,” she said.
Hidy Chui, a 20-year-old Democrat who attends UC Riverside, said he approved of a local cigarette tax. “I don’t even smoke, so if it’s an increase in that, it doesn’t harm me,” he said.
That is a typical attitude, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC and a former GOP strategist. “People support tax increases on others.”
Poll co-director Linda DiVall of American Viewpoint, the Republican half of the survey team, cautioned that a new rash of taxes is unlikely even if local governments gain the flexibility to request them.
“It’s much easier to support higher taxes in theory than when it comes up for a vote,” she said.
A local oil-extraction levy is also part of the debate in Sacramento. Some legislators want to allow municipalities, such as oil-rich Kern County, to tax every barrel pumped from the ground.
That didn’t appeal to Mary Lou Curry, a 65-year old retiree. “Oil? Jeez, that would just be passed on to all of us,” said the Yucca Valley Democrat, “as if we don’t already pay enough at the gas pump.”
Steinberg has introduced legislation that would go even further and allow local officials to also tax medical marijuana and residents’ incomes and cars. His measure sparked a fierce outcry from taxpayer and business groups, which threatened to fight it at the ballot.
Steinberg said in an interview last week that he is tabling the measure until next year.
The Times/USC Dornsife poll surveyed 1,507 registered voters in California from July 6 to 17. It was conducted by Greenberg Quinlan Rosner Research, a Democratic firm, and American Viewpoint, the Republican company. The margin of sampling error is plus or minus 2.52 percentage points.