‘Altria Pushed Cigarette Floor Price’
Colorado passed its recently enacted minimum cigarette price at the request of Altria Group, according to e-mails obtained by The Colorado Sun.
The cigarette giant reportedly asked Colorado Governor Jared Polis’ office to meet several conditions in exchange for agreeing not to fight legislation that put a question on the November ballot asking voters to raise tobacco and nicotine taxes in Colorado.
One of those conditions was adding a clause to the measure that requires a pack of cigarettes to be sold for at least $7 starting this year. The move is seen as benefiting Altria, which competes primarily in the premium cigarette segment.
“It’s like forcing our Honda to sell for the same amount as Mercedes,” Craig Hughes, a high-powered Democratic political consultant, wrote about the minimum-price clause in a June 3 email to Cary Kennedy, a senior adviser to Polis, according to The Colorado Sun.
The U.S. discount cigarette manufacturers Liggett Group, Vector Tobacco and Xcaliber International filed legal complaints, alleging that the minimum price was anti-competitive and anti-consumer.
Liggett Vector’s lawyers are arguing in state court that Proposition EE violates Colorado’s single-subject rule in the state constitution, which requires legislation to address only one topic at a time. In federal court, the company is arguing that the ballot initiative violates interstate commerce laws.
The lawsuits remain pending, though a federal judge last week rejected Liggett Vector’s request for a preliminary injunction that would have temporarily invalidated the minimum-price provision.
In a written statement to The Colorado Sun, Governor Polis’ office described the proposition that includes the minimum price requirement as a “win-win” for the state of Colorado. “We are able to fund free universal preschool for every child while protecting children and other vulnerable populations from cheap, harmful and addictive nicotine products.”
Polis and the health groups failed to pass a similar tobacco and nicotine tax increase bill in 2019 in large part because big tobacco interests successfully lobbied against the measure.
In 2016, Altria spent more than $16 million to block a tobacco tax increase that was on the ballot in Colorado.