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TopCubans.Com
February,
2005

The House of Grauer
Sending a Message...

Special interests may have undue influence on legislation that's harmful to our tobacco business, but legislators still answer to constituents. Smokers are a voting block, and their voice counts - but we must speak up!

By Bill Griewe

This is traditionally a slow time of year in tobacco retailing and distribution, because in most parts of the country we are forced to brave the elements to enjoy the tobacco products of our choosing. Tobacco purveyors, both large and small, shudder when reviewing their customers' experience with their products: We've gone from mainstream to virtual outcasts. I still love the image of smoking in the old black-and-white movies - acceptable at the very least, but glamorous and intoxicating as well.

Unfortunately it's perfectly fine for government to view tobacco products as an opportunity to plug budget deficits. I understand how difficult it is to balance budgets today: We have ever-increasing needs for money and as we see manufacturing jobs and other jobs leave the country it is hard for governments to hope the economy will grow out of a deficit. But if you include Federal excise tax, MSA costs, the tobacco buyout, and state excise tax, total taxes can exceed 90% of the total cost of a cigarette. This is over 1,000% as a percentage of the non-tax portion. It brings to mind classic jungle movies where someone is attacked by piranhas: the feeding frenzy is breathtaking.

We are all well aware of the excessive tax burden, but I none-the-less find myself stunned as I write it. Imagine if such economics were applied to other consumer purchases. "Yes Mr. Greiwe, you sure have negotiated a great price for that new car: $25,000 fully loaded. Now, with tax, that will be $275,000." Or how about taxing fat? Ensnared in the same economic mindset, your morning donut would now be $6 - $10. In the end, these tax burdens fall increasingly on adults who are least able to pay.

Unraveling the Legislative Vote

Now that I have walked the halls of government I understand an interesting fact. Legislators must consider and vote on a tremendous number of bills. If you have read any of them you appreciate the hard work that went into making them impossible to easily understand. Nothing puts you to sleep faster. In fact, legislators do not know the details of what they are voting on much of the time: instead, they must rely on party leadership and lobbyists to guide them. But while they listen to lobbyists and party leadership, good politicians are very interested in listening to voters from their district or state.

We need to send a message. We are not the big companies that have garnered a bad image over the last century. We are selling legal products responsibly. We are mom-and-pop stores that have been in the family for generations; we are new immigrants following the American Dream; we are small companies trying to succeed. We are creating jobs and tax revenue. We only ask for a fair chance to do so. We need to work together to create a better image for our industry, an image separate from Big Tobacco. Americans, including politicians, respond to personal stories, so let's tell our stories and let them know our perspective. Many organizations do lobby federal and state government. Unfortunately most of these organizations receive significant funding from Big Tobacco.

I have talked to organizations about legislation which will have a negative impact on retailers, distributors, and small manufacturers, and they have replied that "they are neutral." They decline to take a side even though, by name, they are a retailer or distributor organization. This is precisely because they receive money and have board members from "Big Tobacco." I am not saying that these organizations are corrupt or that the leadership does not look out for its members. My company belongs to a number of these organizations, and these are all good folks. But, in order to thrive as viable organizations, they have accepted much-needed money from Big Tobacco.

Big Tobacco has traditionally tried hard to control everything. A box has been constructed around organizations' activities and identity. It's time to think outside the box. Let's be honest, Big Tobacco: things are not getting better under your stewardship. If anything, they are getting worse. It would benefit Big Tobacco to step back and allow other voices to speak for the industry. They will benefit from any positive progress. I understand the ad campaigns that warn citizens about smoking: If I was facing a federal RICO lawsuit I would do the same. But it isn't making points with the public. Big tobacco needs to take a revolutionary step. Let someone else drive the image boat - smaller voices that the public is not so wary of, nor so set against.

It's all about money. In striving to pass bill after bill taxing tobacco products, the grab for money has to be cloaked in a cause. Rather than fight against the trend we should strive to understand it and even embrace it. No one wants kids to use tobacco products. Why should the anti-tobacco interests own that issue and make it falsely appear that we condone it? We are parents, we are members of our community, and we have a voice. Tell your legislators your story.

When Mark Twain was told by his doctor to smoke fewer cigars, he allegedly replied, "I smoke in moderation: Only one cigar at a time." America was founded on the rights of the individual which presumes individual responsibility. Adults should have the right to make informed decisions. In light of the health information about tobacco one possible response could be to enjoy tobacco in moderation - a potential choice for reasonable individuals. For some the right choice is quitting, while others will choose Mr. Twain's path and feel the enjoyment received is worth the potential health issues.

We all may feel differently about these choices but shouldn't adults be allowed to make their choice as they are allowed to volunteer to fight in times of war or vote for President? If we accept that this ability and responsibility of adults to make choices and be responsible for them is central to the American identity, should we not then, as an industry, support adult smokers in whatever decision they make? We have to do a better job in this area. We also have to hear what nonsmokers are saying and work to meet their needs while supporting our consumers. It's not easy. There are a lot of strong feelings on all sides and no magic solutions. I see communication as key to getting ownership of some of the good guy image.

We are in the midst of a great collision. A grand industry, rich in history and an integral part of America's past, is colliding with modern health conscious sensibilities. But it is a more complex collision than that. The players in the collision include major tobacco companies, tobacco consumers, tobacco retailers, federal government, state government, tobacco distributors, lobbying groups for and against tobacco, small manufacturers, and international organizations like the World Health Organization (WHO). Each comes with agendas and all stand to lose. For any of these groups to assume they will come out untouched or unchanged is folly. We are already in the midst of great change. Rather than trying to ram our various agendas down each other's throats, we should be more willing to listen to each other and make things work out.

At the top of the "let's listen better list" is major tobacco and government. Major tobacco certainly feels under siege, but government - in its zeal to extract every last penny from this industry - must be careful not to become too unethical in their practices. Freedom Tobacco and other similar law suits should be wakeup calls that say, "Hey, let's calm down, let's not create a tobacco cartel and damage our credibility as a government by the people and for the people." I would not want to be an agent of the government who could be seen as promoting unreasonable and unfair policies that will increasingly come to light. It is time for informed, ethical voices of reason to speak and win the day.

Every great thing that happens in life begins with a decision. Let's make a decision to change this collision into an opportunity for collaboration. And let me say we all deserve and should have a voice at the table. Government and Big Tobacco need to let us all in so that we can really collaborate on a solution. Otherwise it will simply be another collision.


SMOKESHOP - February, 2005

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