Source: CNN, 2008-11-14
Author: Anjali Cordeiro, Dow Jones Newswires; 201
The changing of the guard in Washington is expected to translate into higher taxes and tougher regulation of the U.S. tobacco industry, which is already under pressure from steadily weakening cigarette sales.
Industry watchers widely expect Congress to enact legislation this year that will allow an increase in federal excise taxes on tobacco products to help fund an expansion in the State Children's Health Insurance Program. Also, likely to be on the agenda are measures that would allow the Food and Drug Administration to regulate the tobacco industry. The changes could pose fresh challenges for the three major U.S. cigarette makers, Altria Group Inc. (MO), . (RAI) and Lorillard Inc. (LO). . . .
"Both the FDA bill and the funded by tobacco tax have demonstrated bipartisan support and therefore present the new Congress and the new president with the opportunity for early victories," says , president of the Campaign for Tobacco-Free Kids, an organization that works to reduce tobacco use. "This president and this Congress is likely to be more supportive to efforts to reduce tobacco use than any in history."
"It's a more adversarial environment for tobacco companies," says Stifel Nicolaus analyst Christopher Growe.