General Tobacco Nears Deal With States on MSA

Source from:  AP:NEW YORK 02/18/2009

General Tobacco, the sixth-largest tobacco company in the U.S., said Tuesday that it had reached a deal to change how it will make back-payments under the Master Settlement Agreement. An undisclosed number of states had already agreed to the deal, while the rest of the states are waiting for a ruling in a related California court case. General Tobacco was founded in 2000 and did not join the Master Settlement Agreement until 2004, roughly six years after the MSA was created in 1998. Because of its late entry, General Tobacco had to make retroactive payments before it could join. As of April, it will have made about $550 million in payments. It has sought changes to how it pays, in an effort to give it a more predictable payment schedule. If it reaches the deal with the states, it could make payments based on how many cartons of cigarettes it sells per year. That would offer the company more stability, said the company's general counsel, Ron Denman. "It provides our customers with the assurance of General Tobacco's stability and longevity in the marketplace," he said. The Mayodan, N.C.-based maker of GT-One brand cigarettes originally sued 52 attorneys general and other tobacco makers in October, complaining that the belated payments limited competition and forced it to pay more than the original entrants. The lawsuit was dismissed by a Kentucky judge last month. Now, General Tobacco awaits a decision from a California judge that could pave the way to a broader agreement with other states. The MSA includes 46 states, the District of Columbia and five territories. General Tobacco's brands include Bronco, Silver and Vaquero Little Cigars. Enditem