Cigarette Packaging to Get Much Scarier

CNN is featuring some downright nauseating pictures that the FDA unveiled today as part of its new campaign in the war on cigarettes. The FDA will require cigarette-makers to feature one of the images in full color on product packaging, along with one of nine warning messages, such as “Cigarettes are addictive,” “Tobacco smoke can harm your children,” “Smoking can kill you,” and others with a similar bone to pick. According to the new rules, 50% of each package must be covered by the warning and picture. Tobacco company’s must adhere to the new standards by September of 2012, or risk federal prosecution.

The FDA is implementing these reforms as a result of the Family Smoking Prevention and Tobacco Control Act, which was signed into law by Pres. Obama in 2009 and is just starting to levy its impact on the industry. The act gives the FDA authority to “restrict the tobacco industry’s marketing to children, ban the use of flavorings in tobacco products, ban misleading terms such as “light and “low,” require larger, more effective warning labels, require the tobacco industry to disclose all ingredients, additives,” and much more.

Health and Human Services Secretary Kathleen Sebelius commented on the new labels, saying, “These labels are frank, honest and powerful depictions of the health risks of smoking and they will help.” Another anti-smoking advocate, Thomas Glynn of the American Cancer Society says the new labels bring much needed reform, noting, “It’s the first change we’ve had in 25 years. This is going to be a very important element in the tobacco control tool box, but it’s not a panacea. For smokers, it’s a new and very visible reminder that smoking can harm them, harm people around them, including children. For nonsmokers, it’s a reminder that smokers need their help and concern as far as quitting.”

The tobacco industry’s leading firms are calling the FDA-sponsored labels outrageous, and plan to take legal action. Reynolds American, Inc (NYSE:RAI) says the new packaging is a violation of its first and fifth amendment rights, from a corporate statement,”The anti-smoking message is not intended to provide information that smokers and potential smokers can consider rationally in weighing the risks and perceived benefits from smoking. Rather, it plainly conveys — through graphic images and designs intended to elicit loathing, disgust, and repulsion, the Government’s viewpoint.”

Phillip-Morris (NYSE:PM), (NYSE:MO), despite having publicly supported the new law, is raising concerns with the packaging changes as well.

Competitors to Watch: Lorillard, Inc. (NYSE:LO), Altria Group, Inc. (NYSE:MO), Reynolds American Inc. (NYSE:RAI), British American Tobacco (AMEX:BTI), and Vector Group Ltd. (NYSE:VGR).

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