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Tobacco marketers last week threatened to walk away from the voluntary ad restrictions agreed to last year in a landmark deal with state attorneys general.

The industry balked after a Senate Democratic task force, led by Sen. Kent Conrad, (D., N.D.), proposed legislation much harsher than the June 1997 pact.

The Conrad bill drastically limits the industry's protection from liability suits, plus it raises tobacco taxes much faster, funds an anti-smoking campaign and gives authority to the Food & Drug Administration to issue ad restrictions that had been overturned in court.


"Many of the advertising and marketing restrictions . . . contained in the resolution would be unconstitutional and therefore could not be implemented unless the industry agreed to them," said a statement signed by Brown & Williamson Tobacco Corp., Philip Morris USA, R.J. Reynolds Tobacco. Co. and U.S. Tobacco Co. "Based on the terms of Sen. Conrad's approach, the industry would be unable to consent to these provisions."

Last year, the marketers offered to eliminate most outdoor signs, point-of-purchase ads, giveaways and sponsorships in return for liability protection. They also agreed to eliminate people and cartoons in print ads and eliminate all imagery in ads in magazines with 15% of readers under 18.


The industry already has agreed to such bans in separate settlements with three states.

Ad groups have said the POP and media concessions alone would affect more than $1 billion in advertising.

Mr. Conrad indicated he was willing to forgo ad concessions and take his chances in the courts if he could get his legislation approved.

Senate Assistant Majority Leader Don Nickles (R., Okla.), who coordinates the tobacco issue for Senate Republicans, last week said passage of a comprehensive tobacco measure is unlikely this year, though he didn't rule it out.

He suggested the Senate was more likely to approve a deal more limited than that of the settlement with attorneys general. Measures might include a tobacco tax hike, authority for the FDA to oversee tobacco, tobacco research funding and an anti-smoking campaign. The GOP package would contain no ad restrictions.

The possibility of the tobacco marketers' exit from the early deal prompted a unusual letter from Mississippi Attorney General Mike Moore, who negotiated on behalf of the states.

Mr. Moore warned congressmen that the ad restrictions mattered and said the recent release of documents from Reynolds shouldn't discourage congressmen from acting.

"The marketing tactics aimed at children were the primary devils we tried to exorcize in our . . . agreement," wrote Mr. Moore.


The constitutional issues raised by imposing tobacco ad curbs were discussed last week at a Senate Judiciary Committee hearing.

While David Ogden, counselor to the U.S. attorney general, said he thought curbs on tobacco ads were constitutional, he noted that a voluntary agreement was preferable.

But Floyd Abrams, a First Amendment lawyer; Martin Redish, a Northwestern University professor; and David Versfelt, a lawyer representing ad groups, all said imposing ad restrictions is unconstitutional.

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