[Congressional Record Volume 149, Number 82 (Thursday, June 5, 2003)]
[Extensions of Remarks]
[Pages E1145-E1150]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMOKELESS TOBACCO
______
HON. HENRY A. WAXMAN
of california
in the house of representatives
Wednesday, June 4, 2003
Mr. WAXMAN. Mr. Speaker, the United States Tobacco Company has
requested that it be allowed to market certain dangerous and addictive
products as less harmful than cigarettes. UST would like to market
these products immediately without regulation by a health agency.
I recently obtained UST documents that speak to the clear need for
effective and comprehensive regulation prior to any health claims for
smokeless tobacco. Because it is in the public's interest to review the
content of these documents, I am inserting them into the public record,
along with a ``dear colleague'' letter I recently circulated, the UST
response, and a letter I sent yesterday to House Committee on Energy
and Commerce Chairman Billy Tauzin on this matter.
April 28, 2003.
Should Smokeless Tobacco Be Marketed as ``Reduced Risk''?
Dear Colleague: In recent weeks, the United States
Smokeless Tobacco Company, Incorporated (UST), the country's
largest manufacturer of smokeless tobacco products, has begun
to lobby Congress for permission to tell potential customers
that using smokeless tobacco is safer than smoking
cigarettes. The request follows a prior petition to the
Federal Trade Commission (FTC), which UST has now withdrawn,
in which UST proposed telling consumers: ``Many researchers
in the public health community have expressed the opinion
that the use of smokeless tobacco involves significantly less
risk of adverse health effects than smoking cigarettes.''
It would be a serious mistake for Congress to endorse
``reduced risk'' claims proposed by UST outside of effective
regulation of tobacco products. Attached are two documents
from the Campaign for Tobacco Free Kids on (1) smokeless
tobacco and (2) UST's request to Congress. I would draw your
attention to several key points:
``Reduced risk'' claims need to be scrutinized carefully.
If new claims that smokeless tobacco is safer than cigarettes
cause fewer smokers to quit tobacco altogether, or if these
claims encourage non-tobacco users--especially young people--
to begin using smokeless tobacco products, any theoretical
benefit to those switching from cigarettes to smokeless
tobacco products may be undermined. That's why the Institute
of Medicine and other experts who favor risk reduction
strategies, including several tobacco control advocates cited
by UST, actually believe that such claims should be made only
with regulatory oversight. A regulatory system would allow
close monitoring of health claims and assessment of the true
impact on death and disease rates.
The Swedish model does necessarily not apply to the United
States. UST points to Sweden as a country with relatively
high levels of smokeless tobacco use and relatively low
levels of cigarette smoking. Yet Sweden's situation is
considerably different. First, Swedish smokeless tobacco is a
different product from the one that UST makes. Second, Sweden
also has tight restrictions on tobacco products, including
high taxes and a marketing ban. Third, Sweden does not allow
health claims to be made for smokeless tobacco products.
UST does not have a responsible track record. The U.S.
Surgeon General, the National Cancer Institute, and other
major scientific and public health agencies have concluded
that smokeless tobacco poses significant health risks, causes
oral cancer and other noncancerous oral conditions, and can
lead to nicotine addiction. UST, however, has recently
asserted that ``smokeless tobacco has not been shown to be a
cause of any human disease.'' The company also has a long
history of marketing to children, including flouting
restrictions on marketing to minors and the addition of
cherry, mint, and other flavorings that increase their
products' appeal to youth. This record indicates the need for
close regulatory oversight of any health claims made by the
company.
With cigarette smoking responsible for more than 400,000
deaths in the United States each year, there is reason to
consider nonconventional strategies to save lives. However,
these strategies should be based upon science and carefully
monitored in a regulatory scheme to assure that they do not
cause more harm than good.
If you would like more information, please do not hestitate
to contact Josh Sharfstein on the minority staff of the
Government Reform Committee (202) 225-5420.
Sincerely,
Henry A. Waxman,
Ranking Minority Member.
____
Smokeless (``Spit'') Tobacco in the United States: An Overview of the
Health Risks and Industry Marketing Aimed at Children
What do the experts say about smokeless tobacco?
Smokeless tobacco in the United States causes cancer.
Smokeless tobacco in the United States is not a safe
alternative to cigarettes.
Smokeless tobacco in the United States is not regulated and
any health claims about the product have not been verified by
an independent, objective government authority.
Smokeless tobacco manufacturers in the United States have
systematically marketed their products to children and
adolescents.
Smokeless tobacco, and the manner in which it is
manufactured, marketed and sold, in the United States is
substantially different from what is occurring in Sweden.
U.S. Surgeon General:
``After a careful examination of the relevant
epidemiologic, experimental, and clinical data, the committee
concludes that the oral use of smokeless tobacco represents a
significant health risk. It is not a safe substitute for
smoking cigarettes. It can cause cancer and a number of non-
cancerous oral conditions and can lead to nicotine addiction
and dependence.''
``The scientific evidence is strong that the use of snuff
can cause cancer in humans. The evidence for causality is
strongest for cancer of the oral cavity, wherein cancer may
occur several times more frequently in snuff dippers compared
to non-tobacco users. The excess risk of cancer of the cheek
and gum may reach nearly fifty-fold among long-term snuff
users.''
U.S. National Cancer Institute:
``The bioassay data strongly support the epidemiological
observation that ST is carcinogenic to humans. Twenty-eight
carcinogens have been identified in chewing tobacco and
snuff. The high concentrations of N-nitrosamines in ST, and
especially the high levels of TSNA, are of great concern.''
``The evidence that NNK and NNN play a role in human oral
cancer induced by snuff is strong. Both compounds are present
in significant amounts in snuff and in the saliva of snuff
dippers. They are metabolically activated in snuff dippers to
intermediates that bind to hemoglobin. They cause oral tumors
in rats and are metabolically activated by rat and human oral
tissue. Although there are many questions about the
mechanisms by which snuff causes oral tumors in rats and
humans, there is no doubt that the presence of NNK and NNN in
snuff is an unacceptable risk to people who choose to use
these products.''
U.S. National Toxicology Program:
``The oral use of smokeless tobacco is known to be a human
carcinogen based on sufficient evidence of carcinogenicity
from studies in humans which indicate a causal relationship
between exposure to smokeless tobacco and human cancer.''
``Smokeless tobacco has been determined to cause cancers of
the oral cavity. Cancers of the oral cavity have been
associated with the use of chewing tobacco as well as snuff
which are the two main forms of smokeless tobacco used in the
Untied States.''
World Health Organization:
``There is conclusive evidence that certain smokeless
tobacco products increase risk of oral cancer, specifically .
. . smokeless tobacco in the United States.''
marketing smokeless (``spit'') tobacco to kids
The smokeless tobacco companies have a long history of
creating new products that appeal to kids and marketing them
aggressively to children. Their efforts have created a whole
new market for spit tobacco--in kids.
a shift from older to younger smokeless tobacco users
Since 1970, smokeless tobacco has gone from a product used
primarily by older men to one used predominantly by young men
and boys. In 1970, males 65 and older were almost six times,
as likely as those ages 18-24 to use smokeless tobacco
regularly (12.7 percent vs. 2.2 percent. By 1991, however,
young males were 50 percent more likely than the oldest ones
to be regular users. (8.4 percent vs. 5.6 percent. This
pattern holds especially true for moist snuff, the most
popular type of smokeless tobacco. From 1970 to 1991 the
regular use of moist snuff by 18-24 year old males increased
almost ten-fold, from less than one percent to 6.2 percent.
Conversely, use among males 65 and older decreased by almost
half, from 4 to 2.2 percent. Among all high school seniors
who have ever used smokeless tobacco, almost three-fourths
began by the ninth grades.
Despite some recent declines in youth smokeless tobacco
use, 14.8 percent of all boys in U.S. high schools--and 1.9
percent of high-school girls--currently use smokeless tobacco
products. In some states, smokeless tobacco use among high
school males is particularly high, including Montana (25.2
percent), Wyoming (28.6 percent), West Virginia (33.0
percent), and Arkansas (24.9 percent).
UST (the parent company of the U.S. Smokeless Tobacco
Company) is the biggest smokeless tobacco company in the
Untied States. It controls about 40 percent of the total U.S.
smokeless tobacco market, including 75 percent of the moist
snuff tobacco
[[Page E1146]]
market, which is both the largest segment of the smokeless
tobacco market and the only segment that has recently grown.
strategies to hook kids
According to internal company documents, UST developed a
strategy some time ago for hooking new smokeless tobacco
users, which means kids. As one document states: ``New users
of smokeless tobacco--attracted to the product for a variety
of reasons--are most likely to begin with products that are
milder tasting, more flavored, and/or easier to control in
the mouth. After a period of time there is a natural
progression of product switching to brands that are more
full-bodied, less flavored, have more concentrated `tobacco
taste' than the entry brand.''
Following this strategy, in 1983-84, UST introduced Skoal
Bandits and Skoal Long Cut, designed to ``graduate'' new
users from beginner strength, to stronger, more potent
products. A 1985 internal UST newsletter indicates the
company's desire to appeal to youth: ``Skoal Bandits is the
introductory product, and then we look towards establishing a
normal graduation process.'' In 1993, cherry flavoring was
added to UST's Skoal Long Cut, another starter product. A
former UST sales representative revealed that ``Cherry Skoal
is for somebody who likes the taste of candy, if you know
what I'm saying.''
Smokeless tobacco products have been marketed to youth
through a number of channels, including sports events like
auto racing and rodeos that are widely attended by kids.
Although the state tobacco settlement agreements have limited
UST's ability to continue to do brand-name sponsorships of
events and teams, UST continues to be a promotional sponsor
of both professional motorsports and rodeo and bull riding.
In motorsports, UST sponsors are Skoal Racing funny car team
on the National Hot Rod Association circuit. In rodeo and
bull riding, UST supports the Rodeo Cowboys Association, the
Professional Bull Riders, Inc., and the National
Intercollegiate Rodeo Association. As the general manager of
the College Finals said, ``U.S. Tobacco is the oldest and
best friend college rodeo ever had.''
Continuing its efforts to lure and maintain young users, in
February 1999, UST ran a full-color advertising insert for
its Rooster brand smokeless tobacco in the Daily Aztec, the
college paper at San Diego State University. The ad offered a
sweepstakes for an all expenses paid trip to the Playboy
mansion and, in direct violation of California law, included
a $1.00 coupon. State enforcement efforts related to the ad
forced UST to pay a fine of $150,000 and also pay for a
parallel ad insert opposing smokeless tobacco use.
From 1985 to 1999 (the most recent year with available
data), the total marketing expenditures of the top-five
smokeless tobacco companies in the United States (Conwood
Company, National Tobacco Company, Swedish Match North
America, Inc., Swisher International, and United States
Tobacco Company) have more than doubled, as have their sales
revenues. In 1999, these smokeless tobacco companies spent
more than $170 million to advertise and market their deadly
products. Some of these funds pay for smokeless tobacco ads
in magazines with high youth readership, such as Sports
Illustrated and Rolling Stone. In fact, despite the
restrictions placed on youth advertising by the Smokeless
Tobacco Master Settlement Agreement (STMSA), UST has
continued to heavily advertise in youth-oriented magazines.
For the period 1997-2001, UST's expenditures in youth
magazines increased from $3.6 million to $9.4 million, a 161%
increase.
In August 2001, UST announced plans to market a brand new
smokeless tobacco product called Revel. UST is marketing the
new product as a way to consume tobacco in places
or situations when smoking is not allowed or is not
socially acceptable. Public health organizations and
others are concerned that this new product may lure even
more kids into smokeless tobacco use and addiction--both
because of its novelty and the misconception that it is a
safe form of tobacco use, and because it can be consumed
much less conspicuously than either cigarettes or existing
smokeless tobacco products at home, in school, and in
other locations. There is also a concern that some current
cigarette smokers who might ultimately quit because of the
social stigma associated with smoking, the inconvenience
caused by smoking restrictions at work and elsewhere, or a
desire to protect their family and friends from secondhand
smoke will switch to Revel or other smokeless products,
instead.
These public health risks are significant, especially since
the Star tobacco company has also begun selling a smokeless
product, known as Ariva, and has sold Brown & Williamson (the
third largest U.S. cigarette company) the right to market
Star's new product under B&W's own brand name.
Health Risks Associated With Smokeless Tobacco Use
Smokeless tobacco use can lead to oral cancer, gum disease,
and nicotine addiction; and it increases the risk of
cardiovascular disease, including heart attack. More
specifically:
Smokeless tobacco causes leukoplakia, a disease of the
mouth characterized by white patches and oral lesions on the
cheeks, gums, and/or tongue. Leukoplakia, which can lead to
oral cancer, occurs in more than half of all users in the
first three years of use. Studies have found that 60 to 78
percent of smokeless tobacco users have oral lesions.
Constant exposure to tobacco juice causes cancer of the
esophagus, pharynx, larynx, stomach and pancreas. Smokeless
tobacco users are up to 50 times more likely to get oral
cancer than non-users. These cancers can form within five
years of regular use.
Smokeless tobacco contains nitrosamines, proven
carcinogens, as well as 30 metals and a radioactive compound
called polonium-210. A study by the American Health
Foundation for the State of Massachusetts found that the
level of cancer causing tobacco specific nitrosamines (TSNAs)
in U.S. oral snuff brands were significantly higher than
comparable Swedish Match brands. These data suggest that it
is possible for smokeless tobacco companies to produce oral
snuff with significantly lower TSNA levels.
This same study found that the two leading U.S. snuff
brands, Copenhagen and Skoal, had large increases in TSNA
levels when placed on a shelf at room temperature over a six-
month time period. The TSNA levels increased 20 percent in
Skoal and by 137 percent in Copenhagen, while no significant
changes were observed in Swedish match brands.
Chewing tobacco has been linked to dental caries. A study
by the National Institutes of Health and the Centers for
Disease Control and Prevention found chewing tobacco users
were four times more likely than non-users to have decayed
dental root surfaces. Smokeless tobacco also causes gum
disease (gingivitis), which can lead to bone and tooth loss.
A number of researchers and at least one U.S. smokeless
tobacco company (UST) who point to the experience of Sweden
and their use of a smokeless product called ``snus'', as a
prime example of why smokeless tobacco is not harmful and
should be promoted as a harm reduction and/or smoking
cessation aid. However, upon closer examination the snus
experience in Sweden is completely irrelevant in the context
of the United States for a number of reasons. First, snus is
a different product from American smokeless products (even
the products sold by the North American division of Swedish
Match) in that Swedish snus is highly regulated and
manufactured according to strict standards. The makers of
Swedish snus (Swedish Match) are not allowed to make health
claims, and they are forbidden from even marketing the
product at all. In the United States, we have a situation
where all tobacco products (including smokeless products) are
exempt from product regulation and that have been marketed
irresponsibly to kids for decades. In addition, there is also
disagreement among the researchers as to whether snus has, in
fact, played a role in reducing smoking in Sweden.
Industry Denials of Harms of Smokeless Tobacco
Despite all the evidence of the harms of smokeless tobacco,
in April 1999, a spokesperson for UST, quoted in the
Providence Journal, claimed that it has not been
``scientifically established'' that smokeless tobacco is ``a
cause of oral cancer.'' The Rhode Island Attorney General
subsequently filed a legal action against U.S. Tobacco for
violating the multistate settlement agreement's provisions
prohibiting false statements about the health effects of
tobacco products. As a result, UST was required to formally
acknowledge that the Surgeon General and other public health
authorities have concluded that smokeless tobacco is
addictive and can cause oral cancer and to pay $15,000 to the
Attorney General's office for efforts to prevent Rhode Island
youths from using tobacco.
On February 5, 2002, in a letter to the U.S. Federal Trade
Commission seeking an advisory opinion to make statements in
its advertising that smokeless tobacco products are safe
alternatives to cigarettes, UST concluded that, ``. . . it is
USSTC's position that smokeless tobacco has not been shown to
be a cause of any human disease [emphasis added].''
Smokeless Tobacco A ``Gateway'' To Other Drugs?
High school students who use smokeless tobacco 20 to 30
days per month are nearly four times more likely to currently
use marijuana than nonusers, almost three times more likely
to ever use cocaine, and nearly three times more likely to
ever use inhalants to get high. In addition, heavy users of
smokeless tobacco are almost 16 times more likely than
nonusers are to currently consume alcohol, as well.
A recent study in the American Journal of Preventive
Medicine found that ``snuff use may be a gateway form of
nicotine dosing among males in the United States that may
lead to subsequent cigarette smoking.'' Further, the study
found that ``the prevalence of smoking was substantially
higher among men who had quit using snuff than among those
who had never used snuff, suggesting that more than 40
percent of men who had been snuff users continued or
initiated smoking.
Types of Spit Tobacco
Oral (moist) snuff is a finely cut, processed tobacco,
which the user places between the check and gum, that
releases nicotine which, in turn, is absorbed by the
membranes of the mouth.
Looseleaf chewing tobacco is stripped and processed cigar-
type tobacco leaves that are loosely packed to form small
strips. It is often sold in a foil-lined pouch and usually
treated with sugar or licorice.
Plug chewing tobacco consists of small, oblong blocks of
semi-soft chewing tobacco
[[Page E1147]]
that often contain sweeteners and other flavoring agents.
Nasal snuff is a fine tobacco powder that is sniffed into
the nostrils. Flavorings may be added during fermentation,
and perfumes may be added after grinding.
____
USSTC Spit Tobacco Products
Split Tobacco Is Harmful: The Surgeon General, the National
Cancer Institute and numerous other scientific bodies have
determined that there is conclusive evidence that the use of
the spit tobacco products sold in the United States, also
known as smokeless tobacco, increases the risk of serious
disease, including oral cancer. This conclusion is as true
today as when Congress mandated health warnings on all spit
tobacco products in 1986. This is not surprising because 28
cancer-causing chemicals have been found in these products.
Spit tobacco is not a safe alternative to smoking. Despite
this and a 1999 agreement with the Rhode Island Attorney
General by U.S. Tobacco Company (the parent company of U.S.
Smokeless Tobacco Company or USSTC) not to make statements
``to any news media . . . to the effect that any of its
tobacco products do not cause or have not been proven to
cause adverse health consequences . . .'' USSTC claimed in a
2002 letter to the Federal Trade Commission (FTC) ``smokeless
tobacco has not been shown to be a cause of any human
disease.''
Spit Tobacco and Its Marketing Should Be Regulated by a
Science-Based, Health Agency: USSTC wants government approval
for it to market its products as less hazardous than
cigarettes without any additional control over its marketing
or its products. Unless the U.S. Food and Drug Administration
(FDA) is first given meaningful authority over spit tobacco
products, including the authority to oversee the content,
manufacture, sale, and marketing of spit tobacco, this
request will only increase the harm caused by tobacco. Why is
this so? Absent such regulation, marketing by USSTC of its
products as less hazardous is likely to result in the
following:
It will attract new young users to use spit tobacco by
communicating that it does not pose a serious risk. This is
precisely what happened twenty years ago when USSTC used
similar messages as part of a marketing campaign that led to
an explosive growth in youth spit tobacco use; and
It may discourage some smokers from quitting by misleading
them to believe that smokeless tobacco products offer a safe
alternative to quitting.
In addition, in the absence of FDA regulation there are no
manufacturing standards governing these products or their
relative safety. This is especially important because tests
have shown extremely wide variations in levels of toxins in
spit tobacco products across brands in the United States
as well as across the same brands over their shelf life.
USSTC Markets Its Products To Youth: USSTC has a long
history of marketing its products to youth through the
development of starter products (pouches, long cut, etc.),
the addition of flavorings (cherry, mint), and the strategy
of graduating users from entry products to stronger ones. In
fact, it is the company most responsible for turning spit
tobacco from a product used primarily by old men and women to
one used by young people. Despite the restrictions placed on
youth advertising by the Smokeless Tobacco Master Settlement
Agreement, the U.S. Tobacco Company (UST) has continued to
heavily advertise in youth-oriented magazines. For the period
1997-2001, UST's expenditures in youth magazines increased
from $3.6 million to $9.4 million, a 161% increase. Without
regulation of the way its harm reduction claims are marketed,
there is absolutely no reason to believe that their marketing
will lead to anything other than an overall greater use of
tobacco products, with the attendant harm on public health.
Comparing USSTC Products to Swedish Snus Is Like comparing
Apples To Ants: USSTC likes to compare its efforts to those
of Snus in Sweden and to claim that its products can be an
effective harm reduction strategy. The differences in the
Swedish and U.S. products and the differences in the Swedish
and U.S. regulatory environments render this comparison
ludicrous. Any gains that might have been achieved by Snus in
Sweden have been accomplished with a product that is many
times lower in cancer-causing nitrosamines and other toxic
substances than the USSTC products sold in the US. Sweden
also carefully regulates spit tobacco products and their
marketing. To prevent marketing claims from making these
products more attractive to non-users, Sweden prohibits ANY
advertising of the product and prohibits the kinds of claims
USSTC wants to make here. There is every reason to believe
that operating in an unregulated environment, a company such
as USSTC, with its long history of employing every possible
marketing avenue to attract youth, would only use health
claims to further expand its market, especially among youth.
USSTC Should Support FDA Regulation of Tobacco As The
Solution: If USSTC is serious about reducing the harm caused
by tobacco, and about assuring that the marketing of its
products as less hazardous contributes to improvement in
public health, it would support the effective regulation of
tobacco products by the FDA as outlined by the major public
health groups. Less hazardous, nicotine-replacement therapies
are regulated by the FDA. Why should the manufacturers of
spit tobacco products, attempting to make similar health
claims, be treated any differently? Only regulation of spit
tobacco products by a qualified, science-based agency like
the FDA can assure that health claims for spit tobacco are
accurate, appropriate and protect public health.
____
US. Smokeless Tobacco Co.,
Greenwich, CT, May 23, 2003.
Hon. Henry A. Waxman,
Ranking Minority Member, Committee on Government Reform,
House of Representatives, Rayburn House Office Building,
Washington, DC.
Dear Congressman Waxman: I read with interest your ``Dear
Colleague'' letter dated April 28, 2003, regarding smokeless
tobacco in the context of tobacco harm reduction and the
attached documents from the Campaign for Tobacco-Free Kids,
portions of which are referenced in your letter. There
appears to be widespread agreement in the public health
community regarding your observation that ``with cigarette
smoking responsible for more than 400,000 deaths in the
United States each year, there is reason to consider
nonconventional strategies to save lives.'' As you are aware,
one such ``nonconventional strategy'' increasingly discussed
in the public health community is that cigarette smokers who
do not quit and do not use medicinal nicotine products should
switch completely to smokeless tobacco products.
The debate regarding tobacco harm reduction and the role of
smokeless tobacco products as part of that effort is at a
crossroads. U.S. Smokeless Tobacco Company (``USSTC'') has
been actively and constructively engaged in discussing the
merits of that issue. Unfortunately, the Campaign of Tobacco-
Free Kids does not seem interested in discussing the merits
of communicating to adult cigarette smokers that smokeless
tobacco is a significantly reduced risk alternative to
cigarette smoking. Rather, the Campaign for Tobacco-Free Kids
disseminates documents of the type attached to your letter
that have little relevance to the issue at hand, but contain
numerous statements that are inaccurate or misleading.
Several of those statements relating directly to USSTC
require a response.
The Campaign for Tobacco-Free Kids' central allegation is
that USSTC has engaged in ``strategies to hook kids'' on
smokeless tobacco products. In particular, the Campaign for
Tobacco-Free Kids alleges that USSTC (i) employed a
``graduation strategy'' for hooking new smokeless tobacco
users, which means kids,'' (ii) added cherry flavoring to
Skoal Long Cut in 1993 in order to appeal to underage youth
(iii) ``marketed to youth through a number of channels
including sports events like auto racing and rodeos that are
widely attended by kids,'' and (iv) places ``smokeless
tobacco ads in magazines with high youth readership, such as
Sports Illustrated and Rolling Stone.
The allegation that USSTC engages in ``strategies to hook
kids'' could not be further from the truth. USSTC has made
clear its commitment to market its smokeless tobacco products
only to adults. For example, USSTC is the only smokeless
tobacco company to enter into the Smokeless Tobacco Master
Settlement Agreement (``STMSA'') with the Attorneys General
of 45 states and various territories. As a result, USSTC is
supporting programs to reduce youth usage of tobacco, and has
agreed to limitations on its advertising and marketing
efforts that might be attractive, in the view of the
Attorneys General, to underage potential consumers of
smokeless tobacco, even though USSTC's competitors have
agreed to no such restrictions.
``Graduation Strategy'' Allegations: USSTC does not employ
any marketing strategy based upon a theory that consumers can
be enticed to begin using ``beginner strength'' smokeless
tobacco products, and subsequently be caused to ``graduate''
to smokeless tobacco products that are ``stronger'' or ``more
potent.'' Any suggestion that USSTC's line of products is
developed based upon ``graduating'' levels of ``strength'' or
``potency'' is not true. Smokeless tobacco consumers remain
loyal to a single brand or switch among a variety of brands
according to their preference for flavor, cut of tobacco,
form and packaging. Moreover, there is no set pattern of
brand switching among smokeless tobacco consumers. They do
not conform to any so-called ``graduation strategy.''
Company documents from the early 1980s reflect that there
were discussions among some at the Company about a
``graduation process,'' ``hypothesis'' or ``theory.'' While
the term ``graduation process'' apparently meant different
things to different people, the theory seems to have been an
attempt by some to provide a shorthand explanation for
consumer behavior in switching between brands of smokeless
tobacco, including between the Company's own brands. The term
``graduation process'' as used in the early 1980s: (i) did
not relate to marketing to youth, (ii) did not drive the
Company's marketing strategies, and (iii) is contradicted by
consumer behavior in the marketplace.
Cherry Flavoring: The suggestion that cherry flavored Skoal
Long Cut was designed to appeal to underage youth is
baseless. Cherry flavored tobacco products have been on the
market since 1910. Since then, there have been dozens of
brands of cigars, chewing tobacco, pipe and other smoking
tobacco products with cherry flavor marketed to adults. The
use of cherry flavor tobacco products is not surprising. Many
products marketed for adults, such as Maalox, Alka-Seltzer
and
[[Page E1148]]
Tums, are available in cherry flavor because of its appeal to
those adults.
Sponsorship of Professional Motorsports and Rodeos: As
noted above, an underlying purpose of the STMSA contains a
comprehensive array of restrictions that substantially limit
the Company's activities with respect to marketing its
smokeless tobacco products. Among other restrictions USSTC
has agreed that it will not engage in brand name sponsorships
of concerts, events in which youth comprise a significant
portion of the audience, events in which youth are paid
participants or contestants, football, soccer, basketball and
hockey. USSTC's sponsorship of professional motorsports and
rodeos is part of the Company's efforts to promote its
products to adult consumers and is wholly appropriate under
the terms of the STMSA.
Magazine Ads: As the Campaign for Tobacco-Free Kids is
fully aware, USSTC does not currently advertise in Sports
Illustrated or Rolling Stone. On June 7, 2002, USSTC
announced that in order to leave no doubt that its marketing
program is oriented to adults and adults only, it would
suspend advertising in a small number of magazines while it
reviewed concerns regarding possible youth readership, even
though the overwhelming majority of readers of those
magazines were adults. The magazines involved were Sports
Illustrated, Hot Rod, Motor Trend and sporting News. USSTC
stopped advertising in Rolling Stone in 2001.
USSTC appreciates your interest in this important public
health issue, and looks forward to continuing its
participation in the debate regarding tobacco harm reduction
and the potential role of smokeless tobacco.
Sincerely,
Richard H. Verheij.
____
House of Representatives,
Committee on Government Reform,
Washington, DC, June 3, 2003.
Hon. W.J. (Billy) Tauzin,
Chairman, Committee on Energy and Commerce, House of
Representatives, Rayburn House Office Building,
Washington, DC.
Dear Mr. Chairman: You may have recently received a copy of
a May 23, 2003, letter from U.S. Smokeless Tobacco Company
(UST) in connection with today's hearings on ``reduced risk''
tobacco products. As you consider this letter, you should
know that it is deceptive on important issues.
The UST letter was written in response to a ``Dear
Colleague'' letter that I wrote on April 28, 2003. My Dear
Colleague made two major points: (1) that public health
authorities have concluded that ``reduced risk'' claims for
tobacco products should be made only in the context of strict
regulatory oversight and (2) that the need for regulatory
oversight of such claims is underscored by UST's history of
untrustworthy marketing. The Dear Colleague attached two fact
sheets from the Campaign for Tobacco Free Kids. The fact
sheets detailed UST's use of a ``graduation strategy'' to
hook young users on low-nicotine products and then
``graduate'' them to higher-nicotine products. They also
described the company's strategy of appealing to children
through the use of cherry flavoring in its ``starter''
products.
In its May 23 response, UST dismisses the allegation that
the company ``has engaged in strategies to hook kids'' as
``inaccurate or misleading.'' UST claims that it does not and
has never used a ``graduation strategy,'' certainly not one
related to marketing to youth. UST also rejects as
``baseless'' the suggestion that its cherry-flavored products
were designed to appeal to children.
Since receiving UST's May 23 letter, I have obtained copies
of internal company documents that validate the points made
in my Dear Colleague and conflict with the assertions in
UST's letter. These documents show that the company planned a
``graduation strategy'' starting with ``young'' consumers,
that the company has long known that flavoring in smokeless
tobacco products appeals to young smokeless tobacco users,
and that UST deliberately adds flavoring to ``starter
products.'' The documents also indicate that UST marketed its
products to children as young as 13 or 14. Copies of these
previously undisclosed documents are enclosed with this
letter.
These documents and UST's response are relevant to the
Committee's consideration of UST's request for permission to
market smokeless tobacco as safer than cigarettes. While UST
may say that it would never abuse authority to make ``reduced
risk'' claims, the company's past practices--and its recent
correspondence denying these practices--call the company's
veracity seriously into question.
UST's Graduation Strategy
UST states that it never employed a ``graduation strategy''
in marketing its tobacco products and that any documents from
officials at the company discussing the strategy merely
reflected a ``hypothesis,'' ``did not relate to marketing to
youth,'' and ``did not drive the Company's marketing
strategies.''
This claim is difficult to believe in light of the
documents that I have obtained. The documents show
definitively that a graduation strategy aimed at youth was in
fact the company's goal and that implementing this strategy
was the objective of the highest-ranking officials in the
company. In particular, a 1980 memo from the Senior Vice
President for Marketing and Sales to the Chairman of the
Board and President of UST sets forth two of the company's
marketing ``objectives'' as follows:
Introduce an easy-to-use, ``starter'' product; and
Provide new users with an easy graduation process.
That this graduation process is aimed at young customers is
expressly stated later in the document. A chart labeled
``Marketing Action/Staging,'' which includes specific dates
for implementation of each action as early as two months from
the date of the memo, reads as follows:
------------------------------------------------------------------------
Brand/segment Objective
------------------------------------------------------------------------
Ball'n Chew Wintergreen Plastic Can....... Introduce easy to use,
``starter'' product to
increase consumer base,
especially among the young.
Skoal Straight Plastic Can................ Introduce line extension to
support ``natural
vertical'' graduation
process.
------------------------------------------------------------------------
This document also contains a chart, entitled ``Product
Development and Positioning,'' that depicts ``young, newer''
``light'' users at the bottom of a continuum that ends in
``older, confirmed'' ``heavy'' users. Marching up this
continuum are the company's smokeless products, with the
lightest products at the bottom and the strongest products at
the top.
Use of Flavored Products to Appeal to Youth
UST claims that cherry flavoring is common in adult
products like Maalox and Tums and therefore that there is no
basis to believe that the company used sweet flavors to
appeal to children. But the company had clear understanding
that favors appeal to young users and not to adults. In the
document quoted above, the Senior Vice President for
Marketing and Sales states the following ``assumptions'':
ASSUMPTIONS:
Younger and lighter users prefer a favor, not a natural.
Older and heavier users prefer real tobacco taste and
strength.
Happy Days [a lighter product] can be a better brand and
better ``graduator'' with a change in favor.
UST's Marketing to Children
Another document indicates that the UST's sales force
marketed to children as young as 13 or 14. A memo from a
regional sales manager to UST's National Sales Manager
describes the effect of a competing product on sales of UST
products. The memo states that retailers report that Hawken,
a product from a UST competitor: ``is being used by young
kids and young adults. The age of the kids is from 9 years
old and up. I believe this to be true because outlets
located close to schools (all grades) are definitely the
heavier Hawken outlets we visited. . . . Also, the people
who knew about mouth tobaccos felt the sweet taste was a
definite factor with the kids.''
This memo goes on to say that Hawken ``has reached kids
four or five years earlier than we have contacted them in the
past.'' Because the memo is describing a product being used
by 9-year-olds, the clear indication is that UST was
marketing to kids of 13 or 14 years.
conclusion
As we consider UST's desire to market its products as safer
than cigarettes, we must keep in mind both the company's
marketing history and its continuing deceptions. Essentially,
UST is asking Congress to trust that the company will make
responsible claims about its products. But it is hard to see
how such trust is warranted given the company's track record.
Certainly, the company should not be permitted to make
``reduced risk'' claims about its products without strict
regulatory oversight.
Sincerely,
Henry A. Waxman,
Ranking Minority Member.
Enclosures (2).
u.s. tobacco intra-company correspondence
January 4, 1980.
From: Barry J. Nova, Sr., Vice President Marketing and Sales.
To: Louis P. Bantle, Chairman of the Board and President.
Subject: ``Moist'' Development.
U.S. Tobacco has ``made'' the market in moist smokeless
tobacco; a segment that remains in the early stages of growth
on a product life cycle graph. We must continue to ``lead''
the category in order to:
Enlarge our consumer base;
Preempt probable competition; and
Maintain corporate growth and profit.
A recent document from Peter directed itself to ``product
leadership''; to the methods of ascertaining the right
products in the right positions to meet potential user needs.
While some of the choices and recommendations might be
questioned, it is not the intent of the writer to mark down a
good beginning. Rather, in conjunction with those carboned
above it is the purpose of this memorandum to further define
marketing action needed to meet the following objectives:
Introduce an easy-to-use, ``starter'' product;
Provide new users with an easy graduation process;
Develop better packaging; and
Maintain a simplicity in the product line.
Easy graduation process
There are two ``leaders'' extant in today's marketplace:
Skoal, with a wintergreen flavor; and Copenhagen, with a more
natural tobacco taste. While Skoal is the biggest
[[Page E1149]]
seller, reasonable percentage growth is still apparent in the
Copenhagen brand; and both continue to outpace Happy Days
(mint)--where about 20% of current poundage is samples--on a
poundage growth basis.
In addition, two other ``natural'' brands continue to show
strength with very limited promotional support--W B Cut and
Key.
Simply, then, we should concentrate on the two proven areas
of acceptability--Wintergreen and Natural; and build
vertically in these two flavors, permitting the consumer to
``move-up'' or strengthen his pleasure in a taste that he is
used to and comfortable with. Even our new loose leaf chew
would fit comfortably in the pattern.
And while we do feel that mint/spearmint is an acceptable
American flavoring in food and gums, it has not yet been
completely proven as a tobacco additive; and a triple flavor
track rather than a vertical duality would be too complex
now.
Simplified product line
We cannot, and should not, attempt to be ``all things to
all people'' now. After all, it must be remembered that we
are just beginning to tap the market's potential, and that
the brands we sell, in most cases, seem to meet a need or a
want. To proliferate many new products/line extensions might
very well cause:
Confusion among potential new users as to where to begin
and with what.
Confusion among current users regarding what to move to;
possibly creating no new business, just a transfer of
business intra-line.
Problems in media promotion: difficulty in creating strong,
separate positioning statements; lack of frequency to explain
all various elements.
Trade dismay and lack of support. Moist has been
``welcomed'' by the trade, but for the next four to five
years we will not be at the point where we can demand two to
three times the warehouse or retail shelf space that we now
enjoy. To try to put out a myriad of products is to run the
severe risk of alienating a carefully built trade rapport
based on good sales from consumer demand, as well as inviting
an ever-increasing damaged goods problem.
``Easy-to-use'' starter product development and intro
This must be our priority niche at present, for obvious
reasons:
Expansion demands a continually enlarging new user base.
``Floating'' and saliva build-up are still negatives to the
``beginner''.
Most readily available entry segment for competition on
both a product development basis and ratio of pay-back to
investment. (And who is to say that a so-called ``starter''
product cannot carve-out, in part, its own on-going user
base.)
Happy Days, because of some difficulty in use and apparent
ill-defined flavor, may not be the best effort we can make
for ``starters''. It can be improved, and then perhaps, could
be positioned as part of the ``regular'' line.
Good Luck, a technological advance in packaging rather than
a break through in taste, is selling reasonably well in most
test areas; but requires better flavor and a final, true
evaluation before capital is expended on additional
machinery.
Our new, shag cut, ``balling'' smokeless brand (whether it
is truly ``balled'' or just flattened between the fingers) is
the one that ``gut'' feelings tell us can be the most
successful entry. It is easy to use. Saliva build-up is
minimal. It takes flavoring well. Raw materials are
available. Production methods have been proven. A machine to
pack both it and W B Cut could be ready by the fourth quarter
of '80. However, only thorough testing of the concept will
prove its validity.
Better packaging
The general view is that the plastic can would be a
positive packaging step:
Lower manufacturing costs;
Decreases freight costs;
Easier to open;
Stands-up better in the wearing;
Adaptable to holding lesser amounts of tobacco; and
May keep product fresher, longer.
A small amount of research done in our overseas market,
coupled with some results from Hawken testing in Jonesboro
indicate good consumer acceptance for the plastic container.
And it is understood that both Happy Days and Skoal can be
packed this way now, without any loss in product quality.
However, we can visualize the possibility of some problems
that might occur:
Consumer perception that change in package means a change
in formula and flavor. Panel testing can prove or disprove
this.
Keeping the product fresher, longer could negate the
``built-in obsolescence'' in the present container, thereby
lessening poundage. Still, good users might just use more
because it is fresher. The answer might be gotten through
focus groups.
Finally, one important facet of plastic packaging--its
adaptability--needs further commentary regarding how
important it could become in creating new users and meeting
competitive pressure.
Supposition and strategy
New users ``pinch'' less often and will use less tobacco
per ``dip'': Build up bottom of plastic can--without changing
height and circumference--in order to pack a ``full'' lower
weight in a ``starter'' product; i.e. .6 ounces.
Pricing can be a determinant to trial; and may well be used
as a competitive advantage: Lower price on ``starter'' brands
to increase trial, lower sampling costs, and preempt
competitive, ``low ball'' pricing. for example:
Present can price: UST, 42 cents; Jobber, 52 cents; Retail,
65 cents (packing half as much tobacco may save 20% or more
while maintaining margins).
``Reduced'' can price: UST, 33 cents; Jobber, 41 cents;
Retail, 50 cents.
Possible result: More new users, happy with a ``fair' entry
price, unconcerned with lesser amounts of product, who can be
graduated to one of our ``regular'' products at a ``regular''
price (and may want to ``move'' there faster since 1.2 ounces
at 65 cents is a better ``deal'') . . . and competitors who
probably will have to cut their own margins to find a price
point entry meaningfully below ours.
The foregoing discussions point the way to the
recommendations included on the Product Development and
Positioning Chart that follows; after which a Marketing
Action Staging form indicates the H&D, research and market
testing required to prove their viability.
Product development and positioning vertical duality
Assumptions:
Younger and lighter users prefer a flavor, not a
``natural''.
Older and heavier users prefer real tobacco taste and
strength.
Skoal is our largest selling and fastest growing product
(and best known); all ``starter'' products should acquaint
people with its taste.
Copehagen is our second largest selling product and its
growth could improve with a lead-in from a ``natural'' line
extension, whose name and blend have proven themselves.
Happy Days can be a better brand and a better ``graduator''
with a change in flavor.
The ``top of the line''--W B--may yet be our fastest
growing product and deserves a place in both ``verticals''.
MARKETING ACTION
[Staging]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacture/develop
Brand/Segment Objective period Reserch period Test market/period Roll-out/period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ball'n Chew Wintergreen/Plastic Can Introduce easy-to-use, Blend and flavor--2/ Taste test with new 4 Markets: 2 control By region, with
``starter'' product, 80; Hand pack for Happy Days user w/media; 2 reduced promotional support,
to increase consumer research--3/80; Hand panel, vs. Good Luck price and weight w/ during 1981.
base especially among pack for test and Hawken. In media 9/80 thru 12/
the young. markets--8-12/80; addition, test in 80.
Develop machine potential user focus
packing by 1/81; Name groups vs. Good
and label Luck, Hawken and
development--3/80. Happy Days 4/80 thru
8/80.
Good Luck Wintermint/Plastic Can... Change to a new taste. Blend and flavor--3/ Taste test with user Current areas By region as
Evaluate ``bag'' 80. Full production-- panel--new vs. utilizing present machinery becomes
concept in terms of 6/80. Prototype present product, production capacity available.
future sales machinery--9/80. also gather user fully.
potential and machine profile and concept
needs. acceptance data--3/
80-6/80. Audit
selected outlets in
current areas to
determine future
national volume.
Skoal Straight Plastic Can......... Introduce line Utilize existing Key Audit in test markets 4 Markets: 2 National, supported
extension to support blend, and change at retail and Copenhagen areas, by ``. . . Skoal,
``natural vertical'' label--3/80. wholesale to one with local adv.; and new Skoal
graduation process. ascertain new sales 2 Skoal Areas, one Straight'' network
growth vs. ``pull with local adv. 4/80 TV spot
down'' from existing thru 9/80.
brands. 4/80 thru 9/
80.
Happy Days Wintermint/Plastic Can.. Change to a new taste Blend and flavor--3/ Taste test--existing None................. National
and evaluate with 80. Full production-- vs. new--with large distribution--8/80.
current users. 7/80. Happy Days user
panel. 5/80-7/80.
W B Cut Wintergreen/Pouch.......... Introduce line Blend and flavor--5/ Taste test in panel None................. Region by region
extension to create a 80. Packing machinery of W B Cut users. 6/ distribution only
``top-of-the line'' developed and full 80-10/80. after further
duality. production by 1/81. acceptance of
natural brand is
accomplished. 1/81
thru 12/81.
[[Page E1150]]
Plastic Packaging.................. Evaluate consumer Label development--4/ Full, large panel None................. National distribution
acceptance of plastic 80. Possible new can test for Happy Days beginning--1/81.
can concept. colorations--4/80. with Happy Days
users--5/80-9/80.
Full, large panel
test for Skoal with
Skoal users--5/80-9/
80. Results should
be at least 95
percent positive.
Stetson Natural/Wintergreen Pouch.. Introduce a loose leaf Per T. Cornell: Blend Full, loose leaf user 8 test markets National distribution
chewing entry point and flavor--2/80. panel tests--Stetson conducted in strong 3/81-6/81: supported
toward capture of 10 Samples production--3/ vs. Levi Garrett, loose leaf areas: 2 by national--media
percent of market in 80. Production for Red Man, Beechnut 4/ Stetson natural-- effort.
three years. test markets--7/80-1/ 80-7/80: Name and lower media; 2
81. Full production 2/ package design Stetson natural--
81. perception testing higher media; 2
in 2 focus groups, 4/ Stetson wintergreen--
80-7/80; Audit at lower media; 2
wholesale and retail Stetson wintergreen--
to determine higher media 8/20-2/
movement and growth 81.
vs. competition.
--------------------------------------------------------------------------------------------------------------------------------------------------------
____
U.S. Tobacco intra-company correspondence
January 21, 1980.
FROM: A. E. Cameron, Regional Sales Manager.
TO: Mr. R. R. Marconi, National Sales Manager.
Re: Hawken review.
Tuesday and Wednesday was spent in the tri-city area
(Briston, Tennessee; Bristol, Virginia; and Johnson City,
Tennessee) in an attempt to further evaluate Conwood's new
item ``Hawken''. I spent this time working with Mr. C. E.
Jordan, division manager. Factual information was hard to
come by in some of the areas; however, I will attempt to
cover what we found from consumers, retailers, and
distributors.
Consumers
We were only able to actually discuss Hawken with two
consumers who have used the brand for any length of time. One
of these was a convenience store manager (male about 55 years
old). This man was supplied with samples on a regular basis
for at least four to five weeks. By this time he had
developed a taste for Hawken and now believes the flavor and
taste last longer than SKOAL, the brand he used before
Hawken. The second consumer was a 12 year old male and his
mother. He stated, and it was confirmed by his mother, that
all other brands of mouth tobacco he had tried to use would
make him sick. This included SKOAL, HAPPY DAYS MINT, and
several brands of scrap. He felt the cause with SKOAL and
HAPPY DAYS MINT was the brands were too hard to use, he could
never keep them together. Scrap produced too much juice and
he swallowed too much. He also felt Hawken's flavor lasted
longer. A very interesting observation--his mother was
delighted he had finally found a mouth tobacco he could use.
During my questioning of this lady, it was clearly evident
that she believes mouth tobacco is the least harmful of many
habits her son could develop; therefore, she openly
encourages him to chew. The price made no difference to these
two consumers.
Retailers
While contacting most of the retailers we have had on the
``Tracking Program'', we could only find two who definitely
believe Hawken is still increasing in sales. All others state
the brand has peaked and most report a decline in sales.
Every retailer stated that SKOAL definitely was hurt the
worst; however, they all state that SKOAL is coming back and
is either at, or close to its previous sales level. They all
report consumers of all ages are buying Hawken. Also, all
type of consumers are using Hawken. These retailers all
agree that the majority of Hawken is being used by young
kids and young adults. The age of the kids is from 9 years
old and up. I believe this to be true because outlets
located close to schools (all grades) are definitely the
heavier Hawken outlets we visited. Several retailers
indicated that price was a factor with the young kids.
Also, the people who knew about mouth tobaccos felt the
sweet tests was a definite factor with the kids. No
retailer expressed any problem with the lower price of
Hawken. They all state their mark-up is the same
percentage as on SKOAL and other tobaccos.
Distributors
Distributors all state that they did no more on Hawken than
any other new item. They all report that the brand has peaked
and they are seeing declines. No distributor indicated any
promotional activity was planned for Hawken.
As you can see, all levels are pointing the same way on
Hawken. I believe the brand has hurt SKOAL and HAPPY DAYS
MINT as much as it is going to. Figures prove Hawken killed
our increase on SKOAL (30 percent); and at this point, we are
showing about 9 percent decrease in sales where Hawken is
available. At one point, our loss was well over 20 percent.
This has turned around and I believe SKOAL will be back to a
break-even point within the next few weeks. I feel by the end
of the next three-month tracking period, our increase will be
back to normal. I am not at all sure our increase won't be
greater than ever. It definitely is a fact that Hawken has
brought a lot of new consumers into the month tobacco market.
I think this brand has reached kids four or five years
earlier than we have contacted them in the past. Indications
are that some of these new users are moving up to a stronger
brand. Also, indications are that some older consumers are
moving from Hawken back to the brands they were using before,
and some consumers have begun mixing Hawken with SKOAL and
Levi Scrap. If these trends continue. Hawken may prove to be
a very good starter product for SKOAL.
I am convinced we must continue our tracking of Hawken for
at least another three months before our questions can be
answered. However, all figures indicate Hawken, when
introduced in a new market, will kill our increase on SKOAL
and, in fact, cause a 10 to 20 percent loss for the first
three months.
Our field personnel will continue to supply all information
possible on Hawken.
____________________