Another large tobacco company has joined the Master Settlement Agreement with Iowa and other states, which means the company now is bound by a wide array of restrictions on advertising, promotion and marketing of tobacco products, and that it will make substantial payments to the states.
Iowa's share of payments will be about $14.8 million over the next ten years, with over one-fifth of that going to State coffers.
Vibo Corporation of Miami, Florida, which does business as General Tobacco, has joined the tobacco Master Settlement Agreement (MSA) as a Participating Manufacturer. The company sells a number of cigarette brands such as Bronco, GT One, Silver, and Champion.
"This is important for public health, and it means additional payments to the states," said Attorney General Tom Miller.
Under current market conditions, the agreement will be worth $1.7 billion to all the states over the next ten years. Iowa's share of that will be about $14.8 million. Vibo will make an immediate payment of about $78 million to the states, with Iowa's share about $660,000. The immediate payment brings Iowa's share of payments made since the tobacco settlement in November 1998 to over $304 million.
Twenty-two per cent of the Iowa-related payments will go to the State of Iowa "Endowment for Iowa's Health Account," which is dedicated to purposes related to preventing and controlling tobacco use, substance abuse treatment and enforcement, health care, and other needs of Iowa children, adults and families. The remaining 78% in Iowa is used principally to pay bondholders who bought bonds issued by the Tobacco Settlement Authority in the aggregate principal amount of $644,245,000 in November 2001.
The MSA was originally entered into between 46 States and the major tobacco companies in November 1998. Since that time, more than 40 other companies have joined the MSA.
Vibo's decision to join the MSA is especially significant because the company represents by far the largest tobacco product manufacturer remaining outside the MSA. Vibo is the exclusive US importer of cigarettes from Protabaco, S.A., of Bogota, Colombia, and today's agreement binds Protabaco to sell all of its cigarettes in the U.S. through Vibo and in accordance with the MSA.
Participating Manufacturers under the MSA are bound by a wide array of restrictions on the advertising, promotion and marketing of cigarettes, including outright bans on targeting youth, outdoor advertising, and distribution of any merchandise advertising a cigarette brand. Since the MSA took effect, youth smoking rates nationally have dropped by more than 25% and overall smoking has declined nearly 20%.
Miller said: "Vibo's agreement to join the MSA is a very important indicator of a growing recognition by companies outside the agreement that it is in their interest to observe the public health restrictions of the MSA. Persuading the largest cigarette company outside the MSA to join the Agreement represents a great achievement for the MSA States."