With Democrats now running Congress, an issue that had been largely dormant in recent years is primed to once again move to the forefront: granting the Food and Drug Administration (FDA) oversight to regulate cigarettes and smokeless tobacco products.

Senator Edward M. Kennedy is widely expected to revive a long-stalled Bill giving the federal government broad regulatory authority over the sale, distribution, and advertising of tobacco products. Currently, the FDA can only regulate nicotine-replacement therapies

The legislation is part of a handful of sweeping bills that Kennedy and others will seek to pass as Democrats begin running Congress. Republicans leaders who helped to thwart tobacco regulation are no longer in office.

The bill would permit the FDA to police “false or misleading” advertising and marketing aimed at minors. Under the existing proposal, manufacturers would also be required to provide the FDA with lists of ingredients and additives in their products, including nicotine.

Philip Morris USA is among those inside the industry supporting FDA regulation of tobacco products. Smaller manufacturers and smokeless tobacco producers have opposed regulation, believing it favors Philip Morris, which holds a 50.4 percent share of the U.S. retail market.

If FDA regulation did become a priority for legislators, analysts such as Citicorp’s Bonnie Herzog believe FDA oversight would indeed help the major cigarette manufacturers since it would entrench their positions further, allowing them to maintain market share or increase it. In addition, any legislation that passes would not likely be implemented for several years, say analysts.

A battle is brewing over “little cigars,” the ones that look like cigarettes but are manufactured with a cigar-blend filler and use a homogenized wrapper rather than cigarette paper. The the growing product segment is taxed under its own OTP category, but is coming under greater scrutiny by regulators.

Meanwhile, the smokeless category itself also continues to grow, averaging yearly gains of 5-9%. The cigarette manufacturers that have already jumped into the segment — Philip Morris, R.J. Reynolds, and Lorillard, with continue to ratchet-up the competition and innovation in this sector. Analysts don’t rule out the possibility that more cigarette companies will jump in.

States continue to pass statewide smoking bans; currently 16 states require smoke-free workplaces for all workers, includes restaurant and bar employees, with more bans coming on line and additional states looking to pass new legislation. Additionally, proposed state excise tax increases for both cigarettes and OTP are on the horizon in several states, and new proposals continue to emerge in states with lower taxes or ones that continue to push the leading edge in excise tax rates with successive increases.

All in all, it looks to be a busy year on the regulation and taxation front. The industry’s trade associations — the Retail Tobacco Dealers of America (RTDA) and National Association of Tobacco Outlets (NATO) — are great organizations to support in their efforts to protect the industry’s interests. Be sure to join them if you aren’t already members.

E. Edward Hoyt III