• May 29, 2024

RJR and ITG Resolve Texas Payments Dispute

 RJR and ITG Resolve Texas Payments Dispute
Photo: Alex

R.J. Reynolds Tobacco Co. and ITG Brands have reached a financial settlement with the state of Texas that resolves the question of responsibility for annual Master Settlement Agreement-type payments on four traditional cigarette brands, reports the Winston-Salem Journal.

ITG has accepted all payment obligations to the Texas settlement agreement for the Kool, Maverick, Salem and Winston brands.

The dispute stems from the 2014 purchase by Reynolds American of Lorillard. To obtain federal regulatory approval for the deal, RJR and Lorillard sold the four brands to ITG’s parent company, Imperial Brands.

After the sale, a dispute broke out about which company was responsible for settlement payments on the brands.

The MSA was a 1998 agreement in which tobacco companies settled litigation with state attorneys general over the cost of treating sick smokers. Several states, including Texas, made their own deals with tobacco companies.

In December 2020, the Florida Supreme Court declined to hear an appeal by RJR in a dispute over the four brands, leaving responsibility for the MSA payments with Reynolds.

The four ITG brands combined currently represent about 7.5 percent of the U.S. market share for traditional cigarettes.