$1.7 Billion dollar public health settlement with major tobacco company

Aug 20 2004

Georgia's Attorney General Thurbert Baker announced today that Vibo Corporation of Miami, Florida, has joined the tobacco Master Settlement Agreement (“MSA”) as a Participating Manufacturer. Vibo, which does business as Sun Tobacco and General Tobacco, sells a number of cigarette brands such as Bronco, GT One, Silver and Champion. Vibo was the largest tobacco manufacturer which had not joined the MSA previously.

Attorney General Baker stated that, “Georgia’s citizens receive two major victories from this settlement. The first is that Sun Tobacco now will be subject to the same marketing restrictions as other MSA participants, prohibiting them from marketing tobacco products to our youth. The second accomplishment is that payments worth $1.7 billion under current market conditions will be made to the participating states over the next ten years.”

Georgia will receive $1.8 million up front as part of the settlement, with the remaining payments due Georgia, totaling over $41 million, coming over the 10 years of the agreement. The MSA was originally entered into between 46 States and the major tobacco companies in November 1998. Since that time, more than 40 other companies have joined the MSA.

“Vibo’s agreement to join the Master Settlement Agreement is part of a growing recognition by companies outside the agreement that it is in their interest to observe the public health restrictions of the MSA,” said Attorney General Baker. Participating Manufacturers under the MSA are bound by a wide array of restrictions on the advertising, promotion and marketing of cigarettes, including outright bans on targeting youth, outdoor advertising, and distribution of any merchandise advertising a cigarette brand. Since the MSA took effect, youth smoking rates nationally have dropped by more than 25% and overall smoking has declined nearly 20%. Participating Manufacturers also make substantial payments to the States, and Vibo agreed to make quarterly payments of its future obligations to the States.

Vibo’s decision to join the MSA is especially significant because the company represents by far the largest tobacco product manufacturer remaining outside the MSA. Vibo is the exclusive US importer of cigarettes from Protabaco, S.A., of Bogota, Colombia, and today’s agreement binds Protabaco to sell all of its cigarettes in the U.S. through Vibo and in accordance with the MSA.