1st December 2012
The settlement was a bonanza for those who negotiated it. The dominant tobacco companies, especially Philip Morris (now Altria) got a virtual cartel that allowed them to immediately raise cigarette prices without facing competition from smaller companies, since the AGs wrote into the pact clauses that required new companies to pay into the settlement even though they had nothing to do with the alleged behavior behind the lawsuits. The private lawyers who represented the states are still pulling several hundred millions of dollars in fees a year from the settlement, which is scheduled to run at least through 2023. Other winners included the states, which are still getting billions of dollars in additional revenue from mostly lower-income smokers (although they could have gotten that without paying private legal fees, simply by raising tobacco taxes), and the National Association of Attorneys General, which negotiated its own $103 million payment that has since grown into a pool of money that funds much of the AG professional association’s budget.
The same old story: Big companies don’t mind regulation; big companies LOVE regulation (like Warren Buffett loves high tax rates), because they can afford it and their smaller competitors can’t.
It’s not about health; it’s about MONEY — money for the tobacco companies, and money for the government. (And money for the criminals who smuggle cigarettes when taxes go up and up and up.)