Few believe the industry will walk away from the deal, although RJR's support seems the more fragile. If the deal does go through, economists say the industry as a whole will still do well. Smokers don't cut their intake much even when prices rise. There aren't obvious substitutes. If orange juice prices soar, consumers can buy lemonade.
Smokers have no such easy choice.
Prices will pick up the slack. In fact, the settlement proposal envisions an antitrust exemption to allow companies to raise prices jointly. Both Dr. Harris and W. Kip Viscusi, a Harvard Law School economist and expert witness for the tobacco industry, believe the price of a pack of cigarettes will rise 62 cents on average within five years to provide the companies with enough revenue to pay off the plaintiffs. That's assuming cigarettes cover the whole amount. If smokeless-tobacco prices also rise, cigarettes could go up a little less than 60 cents a pack.