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48TOBACCOOUTLETBUSINESSJULYAUGUST2010killedtheRYOsegmentovernightx1dRousesays.x1cPeoplestartedseekingalternativesxforothersmokingoptions.Pipetobaccowasoneoxfthese.x1dRouseaddsthatconsumerscannotsmokepipetobaccolikecigarettetobaccobecauseitx19smuchstrongerbuthestillbelievestaxhikeswilleventuallyafectthepipecategorytoo.x1c8erearealotoxfpeoplewhodonx19tlikethexfactthatconsumersareusingpipetobaccoxforRYO.Giventodayx19sclimatexforhightaxationweexpectthemtothrowpipetobaccointhecategoryoxfhightaxes.x1dLess-than-fertiLeenvironmentIncreasestopipetobaccotaxeswouldnotonlyhurtpipetobaccomanuxfacturersbutalsohaveadominoefectontheentireindustryRousesays.x1cIdonx19tlikethexfactthattherearehardworkingpeoplewhoarejusttryingtomakealivingandsomegovernmentlawyeroro0cialistryingtotakethatawayviataxation.x1dRousegivesalotoxfcreditxforthecompanyx19ssuccesstoitsemployeesincludinghislongtimebusinessmanagerCherylTurnerwhomhecallsthex1cbackbonex1doxfthecompany.Turnerwasnx19tafectedbutunxfortunatelyMRHoldingshadtolayofmanygoodemployeeslastyearaxfterSCHIPpassedRousesays.x1cSCHIPkilledabout50percentoxfourbusiness.x1dRouseadmitsthecurrentregulatoryenvironmentmakestheoutlookxforthetobaccoindustrylookuncertain.x1cOurcompanyisoneoxfthemostcompliantouttherebutevenwithgoodintentionsyouworrythatyoux19llgetlawyeredorregulatedtodeath.x1dMRwillwaittointroduceanynewproductsuntiltheregulatoryenvironmentlooksclearer.x1cWex19rewaitingtovalidatehowtheFDAmightregulatetheindustryx1dhesays.x1cNoonewantstoinvestinnewproductswhentheyareunsurehowtheFDAmightafectthem.x1dRouseworriesthatinanindustryxfacedwithnewregulationsonlymajormanuxfacturerswillbeabletotakeadvantageoxfopportunities.x1cComplianceissuesaregoingtoreallyafectthesmallmanuxfacturersthroughouttheU.S....FDAcomplianceissuesarethebiggestchallengexforthexfuturetherex19snoquestionaboutit.x1dStillavisitortothecompanyperhapscanx19thelpbelievingthatwithhisxfarmerx19sworkethicandknow-howRousemightbeabletoadapttowhateverchallengesarethrownhisway.Ashementionsatonepointx1cFarmersareinnovativeandcreativeixfsomethingbreaksyoujustgo1xit.x1dMRcontinuestostrivexforinnovativeandcreativewaystoworkwithcustomerstobuilditsbrands.Speci1cprogramsinthepasthaveincludedcontestsincertainmarketsandmanycooperativeadvertisingandPOSprograms.Inoneoxfthecompanyx19slatestpromotionalefortsitbeganoferinglimited-editionDeanx19sCigarsT-shirtstopotentialcustomerswhocalledaboutnewaccounts.MRcloselyvaluesitsrelationshipswithitsretailandwholesaleaccounts.x1cWeliketoworkwithouraccountsaspartnersx1dRousesays.x1cWelookateachoxfthemseparately.Ixfacertaincompanyneedshelpwithacertainproductorprogramwex19llhelpthem.x1dRousesaysthex1cpartnershipx1dapproachhasworkedwellxforMRanditscustomers.x1cItx19sallaboutpartneringandtryingtobeateamplayer....Ourcustomersknowtheircustomersbetterthananyone.x1dTOBTheFull-FlavorvarietyofDeanx19sCigarsisoneofthecompanyx19sbestsellers.RousesaysMRHoldingsworkshardtohelpitscustomerssucceed.