[Federal Register Volume 65, Number 88 (Friday, May 5, 2000)]
[Notices]
[Pages 26211-26212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11313]


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FEDERAL TRADE COMMISSION

[File No. 992 3026]


Santa Fe Natural Tobacco Company, Inc.; Analysis to Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before May 30, 2000.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Michael Ostheimer, FTC/S-4002, 600 
Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-2699.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for April 27, 2000), on the World Wide Web, at ``http://www.ftc.gov/
ftc/formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, D.C. 20580. Two paper copies of each comment should be 
filed, and should be accompanied, if possible, by a 3\1/2\ inch 
diskette containing an electronic copy of the comment. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
section 4.9(b)(6)(ii) of the Commission's Rule of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Santa Fe Natural 
Tobacco Company, Inc. (``Santa Fe'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt for comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.

[[Page 26212]]

    This matter involves an alleged misleading representation for 
Natural American Spirit cigarettes, which Santa Fe has advertised as 
containing no additives. According to the FTC complaint, through these 
advertisements, Santa Fe represented that because Natural American 
Spirit cigarettes contain no additives, smoking them is less hazardous 
to a smoker's health than smoking otherwise comparable cigarettes that 
contain additives. The complaint alleges that Santa Fe did not have a 
reasonable basis for the representation at the time it was made. Among 
other reasons, according to the complaint, the smoke from Natural 
American Spirit cigarettes, like the smoke from all cigarettes, 
contains numerous carcinogens and toxins, including tar and carbon 
monoxide.\1\
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    \1\ In late 1997, Santa Fe voluntarily did begin placing the 
statement, ``To our knowledge there is no research indicating 
cigarettes containing additive-free tobacco are safer than 
cigarettes with tobacco containing additives'' in certain ads for 
Natural American Spirit tobacco cigarettes. Since early 1998, Santa 
Fe has also included the statement ``We make no representation 
expressed or implied that these cigarettes are any less hazardous 
than any other cigarettes'' on the packaging of Natural American 
Spirit cigarettes.
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    The proposed consent order contains provisions designed to prevent 
Santa Fe engaging in similar acts and practices in the future.
    Part I of the order requires Santa Fe to include the following 
disclosure, clearly and prominently, in certain advertising for its 
tobacco cigarettes: ``No additives in our tobacco does NOT mean a safer 
cigarette.'' (The order requires a similar disclosure in advertising 
for other tobacco products Santa Fe advertises as having no additives.) 
The disclosure must be included in all tobacco advertising that 
represents (through such phrases as ``no additives'' or ``100% 
tobacco'') that the product has no additives. This Part exempts Santa 
Fe from the disclosure requirement: (1) For cigarette advertisements 
not required to bear the Surgeon General's health warning; and (2) if 
Santa Fe possesses scientific evidence demonstrating that its ``no 
additives'' cigarette poses materially lower health risks than other 
cigarettes of the same type. In general, the disclosure required by 
Part I must be in the same type size and style as the Surgeon General's 
warning and must appear within a rectangular box that is no less than 
40% of the size of the box containing the Surgeon General's warning.
    Part II of the order requires Santa Fe to include the following 
disclosure, clearly and prominently, in advertising and on packaging 
for herbal cigarettes: ``Herbal cigarettes are dangerous to your 
health. They produce tar and carbon monoxide.'' (The order requires a 
similar disclosure for other herbal smoking products.) The disclosure 
must be included in all advertising and on packaging for herbal smoking 
products that represent (through such phrases as ``no tobacco,'' 
``tobacco-free,'' or ``herbal'') that the product has no tobacco. This 
Part also contains an exemption from the disclosure requirement if 
Santa Fe possesses scientific evidence demonstrating that such herbal 
smoking products do not pose any material health risks. In general, the 
disclosure required by Part II must be in the same type size and style 
as the Surgeon General's warning and for advertisements must appear 
within a rectangular box that is the same size as the box containing 
the Surgeon General's warning.
    Part III requires Santa Fe to send a letter to its purchasers for 
resale notifying them that they should discontinue the use of certain 
existing Natural American Spirit cigarette advertisements and 
promotional materials and that Santa Fe is required to stop doing 
business with purchasers for resale that do not comply with this 
request.
    Parts IV-VIII of the order require Santa Fe to keep copies of 
relevant advertisements and materials substantiating claims made in the 
advertisements; to provide copies of the order to certain of its 
personnel; to notify the Commission of changes in the composition or 
formula of Natural American Spirit cigarettes that may affect the 
order; to notify the Commission of changes in corporate structure; and 
to file compliance reports with the Commission. Part IX provides that 
the order will terminate after twenty (20) years under certain 
circumstances.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-11313 Filed 5-4-00; 8:45 am]
BILLING CODE 6750-01-M