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RJR claims its merchandising program allows retailers to "sell not only more R.J. Reynolds tobacco products, but also to increase retailer''s sales in the entire tobacco category and total overall store sales," said Jim Boehm, senior manager of trade marketing."Philip Morris competes vigorously, but is in compliance with the law, and Retail Leaders is no exception," said PM rep Mike Pfeil. "The program offers retailers choices and flexibility to achieve a strong category presence in their stores and restrict youth access to smoking."In April, Philip Morris began its 15-cent per carton payouts to Retail Leader participants with non-self-serve tobacco sections, an effort aimed at reducing youth access to cigarettes. Retailers were required to post" We Card" signs, to certify that employees participate in an age-verification program every six months and place in-store cigarette ads no more than two feet away from tobacco products. While the new rules are garnering cautious praise from anti-tobacco activists, some marketers argue that by reducing the retail footprint of all cigarette brands, Philip Morris is grabbing first dibs on the prime shelf and signage spots behind the counter, and continuing to shrink the profile of competing brands.

Star will not position its brands as safe cigarettes because there is no such thing, said Perito, but consumers should have access to labeling so they can make informed judgments, just as they do when they glean calorie and fat content data from food labels. Should such a move occur, the change would be no different from positioning light and ultra-light brands, which make no health claims but are perceived by consumers to carry the benefits of low tar and nicotine, said Bill Pecoriello, analyst with Bernstein & Co., N.Y. The McCain bill ghost haunts the vacant halls of Capitol Hill as members of the 105th Congress returned to their home states this fall, but Big TobacCo fought on in courtrooms of Minnesota, Idaho and Florida, among others-battling huge settlement payments and public relations nightmares. The McCain legislation, which allocated substantial tobacco pricing and marketing power to the Food and Drug Administration, was killed this summer, but its spirit is sure to ris again when the regulatory is. sue is readdressed.

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