The 2003 NATO Conference & Exposition wins positive reviews from retailers and manufacturers.

by E. Edward Hoyt III, Editor

The first-ever N.A.T.O. Conference and Exposition was held in Las Vegas on March 25-27. The event opened with a full day of seminars and meetings, followed by two days of buying opportunities at a merchandise exhibit hall, as well as additional conferences. The event, produced by Tobacco Outlet Magazine and held in conjunction with the non-profit trade association NATO, incorporated the former International Tobacco Expo (ITE). The event was held at the Rio Hotel & Conference Center.

The exhibit hall showcased 356 booths represented by 190 manufacturers. Show organizers said thousands of retailers attended the event, visiting booths, talking with manufacturer representatives, and making merchandise deals unavailable elsewhere.

"This show is fabulous" stated Velma Hartley, co-owner of Columbus, Georgia-based The Tobacco Place. "We've had great discussion about some of the pressing industry issues and terrific things NATO has been doing to represent the industry."

The conference and exposition garnered positive reactions for a variety of reasons, including the insightful seminars on everything from legislation to valuing your business as well as the special price promotions offered by the manufacturer participants on the exhibit floor.

"We're here to look for new products and take advantage of discounts on products offered at the show," added Jeff LeBlanc, co-owner of Fulton, Kentucky-based The Tobacco Barrel Chain.

SEMINAR HIGHLIGHTS

NATO: Growth & Impact
During the conference, NATO held its second annual meeting in which current and pending legislative issues were discussed. Retailers were urged to join to help fight the threatening legislation that affects every state.

According to NATO president Sean Ross, the trade association - which was formed in 2001 - now has over 1,600 retail members, up from less than 800 at the same time last year, and reports a 98% retention rate among existing members. "People wouldn't continue to be a part of this organization if we weren't doing positive things," Ross said, "if we weren't helping them in their ability to succeed and maintain their businesses, manufacturers and retailers."

A membership promotion drive sponsored by Brown & Williamson Tobacco Co. generated 419 new retail members in the first quarter alone. In addition, the group reports 33 new manufacturer and accessory company members, and is actively seeking to increase wholesale membership.

With cigarette sales continuing to migrate from convenience stores and supermarkets to tobacco outlets, NATO is actively supporting the expansion of the tobacco store segment. Among its goals are alerting tobacco stores of upcoming legislation and carefully monitoring all legislative issues, from those affecting retailers directly as well as smokers in general.

"We're anywhere from 25-30% of the population," said Ross, "yet they single us out because we don't stand up as a group and fight for our rights. As retailers, we have the ability to reach more people than anyone else in the tobacco segment, so it's important for us to take action."

NATO's ongoing goals are numerous, but its overriding goal is the use of political means to defend tobacco stores. Grassroots lobbying by tobacco stores is crucial, notes Ross. "We can provide resources, knowledge as far as what's happening today - nationally and on the state level - but it's up to the retailers to use that information, to get active, and to do something about it," stresses Ross. To help retailers become effective, hands-on fighters, NATO provides numerous resources including legislative alerts and pre-written lobbying letters.

Fighting back was the theme of several other speakers who voiced additional concerns that wild double standards apply in government's assault on smokers and the tobacco business.

"You don't have to be a rocket scientist to know that if you keep raising tobacco taxes beyond a certain point you're going to lose sales to various secondary markets, weather they be Indian reservations, the Internet, or smugglers," said Joel Sherman, president, Nat Sherman Inc. and a member of the NATO board of directors. Sherman recalled the industry's weak effort to fight New York City Mayor Michael Bloomburg's successful efforts to raise the city's cigarette excise tax from 8¢ to $1.50 last year and subsequent smoking ban enacted in March 2003.

"The statement was made that [Bloomburg] didn't care if he put the tobacco business out of business, as long as he cut out smoking" noted Sherman. "That's not what taxes are supposed to do; nobody noticed that was against the rules." Sherman noted that in their effort to pass anti-smoking regulations, politicians regularly cite the results of questionable research studies, present results out of context, distort facts, or simply make up statements with absolutely no supporting facts or evidence. Rather than question studies or statements, notes Sherman, the press tends to simply take anti-smoking positions as fact, further vilifyying the tobacco industry while presenting no reasonable opposing views.

Government control over tobacco companies, such as the landmark 1999 Master Settlement Agreement, stripped tobacco companies of numerous rights. "Many of us were coerced into signing the MSA, and the public was then told we had voluntarily waived our rights to the first Amendment," explained Sherman. "The settlement prohibited cigarette companies from lobbying against any of the terms of the MSA or challenging their constitutionality. It also barred them from lobbying against various state and local legislative proposals."

The industry, he says, must fight back, and everyone must get involved. "We have been villainized. We have been accused of all sorts of ill-doing, and yet we represent a rather large minority," he noted, "a minority that is being oppressed not by a majority, but by a lot a lot of people who - if otherwise were given the true facts and some thoughts - might be much more tolerant, as was the basis of the Constitution."

NATO retail member Fred Tutenburg cited the difficulty in trying to understand the government's position when it comes to the cigarette and tobacco industry. "The government wants to limit the sale of cigarettes and tobacco products, but not lose one dollar," he remarked. "And if there's a way it can get more out of selling less, it would like to do that," he added, noting it wants to increase the taxes on cigarettes with no thought given to tax revenue or job losses. "It is a completely confusing scenario that the governments don't understand, the legislators don't understand, and I certainly don't understand," he said.

In Tutenburg's home state of Missouri, the industry successfully fought off tobacco tax increases last year - twice. After a proposed tax increase was successfully defeated in the state legislature, health research organizations immediately funded a multi-million dollar signature drive to put the tax hike onto the November election ballot. The industry again had to mobilize, but in the end was able to defeat the proposal a second time. Voters saw through the hypocrisy, Tutenburg noted: Most of the money that the tax would have raised was slated to benefit the very organizations that funded the initiatives in the first place. The industry also won public sentiment with a "no new tax" position.

Stop Taxing Our Products!
In an effort to mobilize the vast number of adult tobacco users to help fight against anti-smoking legislation, NATO is launching the S.T.O.P. program (Stop Taxing Our Products). The program will reach out directly to tobacco retail store consumers and urge them to contact their legislators by means of email alerts.

Details for the 2004 NATO Conference & Exposition are being finalized and an official announcement will be available soon at www.natoexpo.com.