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News > Economy
States, tobacco reach deal
November 13, 1998: 4:56 p.m. ET

Industry to restrict advertising, pay $209B to states with pending lawsuits
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NEW YORK (CNNfn) - The tobacco industry and a group of states with lawsuits still pending against the industry have reached a tentative settlement that would, among other things, restrict advertising, help curtail youth smoking and fund research and countermarketing, a source familiar with the talks said Friday.
     Under the agreement, the industry would pay about $209 billion to the states, providing all of the states agree. Currently, 30 states are involved in the settlement but another 16 states could sign on.
     Roy Bury, an analyst with Brown Bros., estimated the pact would boost the price of a pack of cigarettes by about 20 cents in the first year.
     In an interview on CNNfn, Bury said the tobacco industry and the states should both emerge as winners, while smokers are going to be the big losers because prices will be going up.
     Mississippi, Florida, Texas and Minnesota previously reached individual deals worth a total of $36 billion.
     The deal, which will officially be announced Monday in Washington, represents a scaled-down version of the $368.5-billion deal the industry offered in June 1997. That deal foundered after health interests demanded more concessions.
     The current deal, according to a draft version of the agreement, would bar all outdoor advertising, restrict sponsorships by brand names, and create a five-year, $1.45-billion public education fund.
     News of the settlement was first reported by the Arizona Republic. Back to top

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