With the President’s approval of FDA plans to squelch advertising and promotion of cigarettes to kids last week, CNN interviewed a North Carolina tobacco farmer. What would be the impact of the new regulations?

“Devastatin’. Just devastatin’” came the reply.

I’m not making fun of his drawl — I am a total fan of the Southern language. But I do wonder at his assessment.

The tobacco industry says Joe Camel and the Marlboro Man don’t encourage anyone to smoke — only to switch brands. If the tobacco industry isn’t lying, tobacco sales won’t be affected a bit.

Of course — news flash — the tobacco industry lies routinely. The new FDA rules will help discourage smoking to some degree. Cigarette sales will be damped down a little.

But devastatin’? North Carolina’s tobacco markets extend around the globe. Losing half the American 8-to-17-year-old market — for that’s the President’s goal, to cut the rate of smoking among kids in half — wouldn’t amount to spit.

More worrisome for the long run: if kids don’t start young, most never will. (Some 60% of today’s smokers started between the ages of 8 and 14.) With millions of smokers dying and quitting each year, the American market really will gradually dwindle if millions of children can’t be hooked each year as replacements.

Yes, it’s a free county, and people should be allowed to smoke if they want so long as the rest of us aren’t forced to breathe it. Absolutely. But to spend $5 billion each year promoting the country’s leading cause of preventable death? This makes no sense.

What’s more, restricting ads for an addictive carcinogen to “black-and-white text only” does not, it seems to me, unreasonably repress or endanger free speech — any more than rules that prevent food and drug companies from advertising unsubstantiated claims.

That said, incidentally, I see nothing wrong with buying tobacco stocks if you think they’re going up. (I don’t know where they’re going, but you would have lost several large fortunes betting against these stocks since 1964, when the Surgeon General’s first report was issued.)

No way will your investment go to build new tobacco factories or fund advertising — the last thing these cash machines need is to raise capital. Thus, you won’t be hurting anyone, and you can take your dividends and profits and give them to organizations like STAT (Stop Teenage Addiction to Tobacco, 511 East Columbus Avenue, Springfield, MA 01105) or SmokeFree Educational Services (375 South End Avenue, 32G, New York 10280). That’s what I did years ago when I made a profit on RJR zero coupon bonds.

Though I don’t own any myself, tobacco stocks may be a buy for two reasons. First, they’re down on all this bad news — the FDA regs and the loss of a smoker’s lawsuit in which a jury awarded $750,000. Second, they’re a class of stocks many well-meaning people simply rule out. That may serve to make the stocks cheaper than a coldly logical appraisal might justify. Personally, I hope they go broke so they can’t afford to advertise and promote so lavishly. But your shunning their stock will not hurt them in any way.

Monday: A Time to Kill


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