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Press Release

Coalition of 42 States Settles with Sante Fe Natural Tobacco Company for Breaching Historic Tobacco Agreement

Settlement Ends Illegal Distribution of Natural American Spirits Cigarettes Branded Merchandise

January 7, 2009

A coalition of 42 states today announced a settlement with Santa Fe Natural Tobacco Company after the company violated the tobacco Master Settlement Agreement by distributing decorative tin signs to consumers that featured its "Natural American Spirit" cigarettes brand name.

Distribution of merchandise bearing the brand name of cigarette companies violates the tobacco Master Settlement Agreement ("MSA"), the historic settlement between state Attorneys General and tobacco manufacturers. According to the settlement announced today, Santa Fe Natural Tobacco Company agrees not to distribute the following types of brand name merchandise in the future: decorative tin signs; toys; games; fashion accessories; CDs; DVDs; video games; clothing; athletic equipment; outdoor gear; luggage; stationery items; house wares; and paintings and plaques intended for the home. In addition, Santa Fe agrees to pay a penalty of $250 for every future violation of the agreement.

The MSA, which was reached in 1998, required tobacco companies to pay over $200 billion to 52 states and territories, and imposed significant marketing and advertising restrictions on the participating tobacco manufacturers. Since the MSA was signed, American consumption of cigarettes has declined by over 100 billion cigarettes, based on data from the American Lung Association. According to the Centers for Disease Control, however, tobacco-related disease continues to be the leading preventable cause of death in the United States and results in more than $190 billion in medical expenses each year.

For more information, please contact Assistant Attorney General Cynthia Drinkwater at (907) 269-5200.

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