TOBACCO INDUSTRY PONDERS ANTI-REG ADS

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A spokesman for the tobacco industry has confirmed that discussions are under way on a possible ad campaign to be mounted to present the industry's side on tobacco regulation legislation.

No decision has been made, and a budget is far from determined. The tobacco industry would probably target the effort for the early months of the congressional session next year.

Even before the tobacco settlement talks earlier this year, tobacco companies either individually or as a group discussed ads to combat the barrage of criticism.

MITCHELL A PROPONENT

The weekly National Journal last week said tobacco industry lobbyist and former Senate majority leader George Mitchell was among those pushing for the ad plan. Some industry lobbyists are worried that the industry's credibility is so low an ad campaign could generate a consumer backlash.

Bozell Sawyer Miller Group, Washington, handles the tobacco industry's public relations related to the congressional legislation; Bozell/Eskew, Washington, would likely handle ads.

NEW YORK CRACKS DOWN

This news came as the city of New York approved the toughest local ordinance yet restricting tobacco advertising. As in several other cities that have already passed ordinances, outdoor signs within 1,000 feet of schools or playgrounds are barred.

New York also banned outdoor ads near daycare facilities, amusement arcades and -- within those areas -- internal signage visible to clients when first entering a store. The city also banned merchandise giveaways.

CONSTITUTIONAL QUESTIONS

Ad groups said the ordinance effectively bans all tobacco advertising and marketing in New York outside of taxis, and suggested the ordinance was unconstitutional.

"There is a very high likelihood of success" in overturning the ordinance, said Dan Jaffe, exec VP of the Association of National Advertisers. "If the New York Court of Appeals doesn't rule this is preempted [by federal law], this ban is so broad as to violate the First Amendment."

"This will essentially not let sellers advertise," said American Advertising Federation President Wally Snyder, who added the ordinance may have the effect of pushing the U.S. Supreme Court to finally consider the question of city ordinances restricting tobacco advertising after passing up a chance to rule on a Baltimore ordinance.

Richard Lipsky, a lobbyist for the Small Business Congress, a coalition of New York retailing associations, said businesses could lose $30 million a year in slotting and merchandising fees. He said a suit challenging the ordinance would

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