For immediate release - Monday, August 23, 2004.
Contact Bob Brammer - 515-281-6699.
Iowa Receives More Tobacco Payments
Another company joins in settlement with states -- which includes restrictions on advertising and
promotion of tobacco products to young people.
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 $600,000. 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."
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