Summary of Corrective Statements Point-of-Sale Settlement Agreement


    “Minor Noncompliance” includes obstructing a portion of a sign (other than the smoking/health-related statement) or displaying a sign incorrectly (as long as it remains visible to consumers). Minor noncompliance would result in counseling by the manufacturers on the proper sign-display requirements and, if not corrected, could lead to a warning letter and the retailer being required to display an additional 144-square-inch corrective statement sign in the noncompliant store for 120 days.

    “Major noncompliance” includes not posting a sign, obstructing or displaying a sign so that the message is not visible, damaging or removing a sign, or failing to rotate a sign. The penalties for major noncompliance include counseling by the manufacturers on the proper sign display requirements, displaying an additional 144-square-inch corrective statement sign for the duration of the 21-month display period and paying to each manufacturer with which the retailer has a retail marketing contract a financial penalty equivalent to the retailer’s price-promotion discounts for a period of four weeks or 13 weeks, depending on the number of major noncompliance violations. Repeated major noncompliance would result in the retailer’s suspension from the retail marketing program for a period of up to 17 weeks.

    Auditor and Working Group: An auditor will be retained by the manufacturers to review photos of signs and visit some stores to take pictures and make determinations of retail compliance or noncompliance. A working group composed of 10 members, including persons appointed to represent the manufacturers, the National Association of Tobacco Outlets (NATO) and the National Association of Convenience Stores, will be formed to address implementation and compliance questions from retailers.

    Court Hearing to Accept Point-of-Sale Settlement Agreement: A hearing before the federal district court to determine if the judge accepts the settlement agreement was held on July 28, 2022. At this time, the industry is waiting for the judge to issue an order on whether the settlement is accepted by the court.

    This story first appeared in the September/October 2022 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.

    Contributed by Thomas A. Briant, Executive Director, National Association of Tobacco Outlets (NATO)