[Federal Register Volume 65, Number 88 (Friday, May 5, 2000)]
[Notices]
[Pages 26208-26209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11312]


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FEDERAL TRADE COMMISSION

[File No. 992 3022]


Alternative Cigarettes, Inc., et al.; 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: Matthew Gold, Federal Trade 
Commission, Western Region, 901 Market St., Suite 570, San Francisco, 
CA. 94103. (415) 356-5276.

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, DC 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 Rules 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 Alternative 
Cigarettes, Inc., and its President, Joseph Pandolfino 
(hereinafter``Alternative Cigarettes''). The proposed consent order has 
been placed on the public record for thirty (30) days for receipt of 
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.
    This matter involves alleged misleading representations for 
Alternative Cigarettes' Pure and Glory tobacco cigarettes, and the 
company's Herbal Gold and Magic herbal cigarettes. Alternative 
Cigarettes advertised that Pure and Glory cigarettes contains no 
additives. According to the FTC complaint, through these advertisements 
respondents represented that because Pure and Glory 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 respondent 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 Pure and Glory cigarettes, 
like the smoke from all cigarettes, contains numerous carcinogens and 
toxins, including tar and carbon monoxide.
    The FTC complaint further alleges that Alternative Cigarettes 
represented that smoking Herbal Gold and Magic herbal cigarettes does 
not pose the health risks associated with smoking tobacco cigarettes. 
According to the complaint, this claim is false, as Herbal Gold and 
Magic cigarette smoke, like the smoke from tobacco cigarettes, contains 
numerous carcinogens and toxins, including tar and carbon monoxide.
    The proposed consent order contains provisions designed to prevent 
Alternative Cigarettes from engaging in similar acts and practices in 
the future. Part I of the order requires Alternative Cigarettes to 
include the following disclosure, clearly and prominently, in certain 
advertising for its tobacco cigarettes: ``No additives in our tobacco

[[Page 26209]]

does NOT mean a safer cigarette.'' (The order requires a similar 
disclosure in advertising for other tobacco products Alternative 
Cigarettes 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. Part I exempts Alternative Cigarettes from the disclosure 
requirement: (1) For cigarette advertisements not required to bear the 
Surgeon General's health warning; and (2) if Alternative Cigarettes 
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 Alternative Cigarettes 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. Part II also contains an exemption from the disclosure 
requirement if Alternative Cigarettes 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 of the order requires Alternative Cigarettes to possess 
competent and reliable scientific evidence prior to: (1) Claiming that 
any herbal smoking product does not present the health risks associated 
with smoking tobacco cigarettes; of (2) making any claim about the 
health risks associated with the use of any herbal smoking product.
    Part IV requires Alternative Cigarettes to send a letter to its 
purchasers for resale notifying them that they should discontinue the 
use of certain existing Alternative Cigarettes advertisements and 
promotional materials and that Alternative Cigarettes is required to 
stop doing business with purchasers for resale that do not comply with 
this request.
    Parts V-VIII of the order contain requirements that Alternative 
Cigarettes keep copies of relevant advertisements and materials 
substantiating claims made in the advertisements; provide copies of the 
order to certain of its current and future personnel; notify the 
Commission of changes in the composition or formula of its tobacco 
products or herbal smoking products that may affect compliance with the 
order; and notify the Commission of any changes in the corporate 
structure that might affect compliance with the order. Part IX requires 
that the individual respondent notify the Commission of changes in his 
employment status for a period of ten years. Part X requires 
Alternative Cigarettes to file one or more reports detailing compliance 
with the order. Part XI 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. 00-11312 Filed 5-4-00; 8:45 am]
BILLING CODE 6750-01-M