Brown & Williamson Tobacco Corp. has filed a lawsuit, seeking to overturn New York State’s recently enacted ban on direct response cigarette sales — reportedly the first law of its kind in the country.
“The Constitution prohibits any one state from regulating avenues of national commerce such as the Internet, the U.S. mails, and interstate shipping,” said David Remes, a Brown & Williamson attorney, in a statement. “The future of e-commerce will be jeopardized if all 50 states can set their own rules for what can be sold over the Internet, or if they can ban out-of-state sales to protect state tax revenues or local merchants.”
A new B&W subsidiary, BWT Direct, LLC, was spun off last week to sell some of the firm’s less-widely distributed brands to adult consumers by catalog, fax, and telephone Those brands include Tareyton, Capri, Barclay, Pall Mall and some others.
The decreasing availability of shelf space in retail stores forced Brown & Williamson to find other ways to satisfy consumer demand for smaller brands, and in some instances to introduce new brands, said Steve Kottak, spokesperson for the Lexington, KY-based company.
Brown & Williamson will confirm that customers are over 21 by sending them a signature card that requires a photo ID, Kottak added.
Before launching the program nationally, Brown & Williamson tested it in North Carolina. The tobacco giant also plans to introduce it in Florida, California, Kentucky, Georgia, Massachusetts, Texas and Oregon. “We expect to roll it out too other states later this year,” said Kottak.
The company says the New York state law has prevented the firm from launching the multi- million dollar program in the state. As described in the complaint, the company ensures that all applicable excise and sales taxes are paid on these cigarettes and has in place rigorous procedures to prevent minors from obtaining them.
The sales ban, signed by Governor George E. Pataki in August, was passed after cigarette sales in retail stores dropped in response to the 55-cent per pack increase in New York’s cigarette excise tax in March. The law, Section 1399-11 of the Public Health Law, makes it a crime to ship or transport cigarettes sold via mail-order, telephone or the Internet to residents of the state.
Brown & Williamson charges that Gov. George Pataki’s administration does not plan to enforce the Internet sales ban against Native American retailers, but will enforce it against private carriers who transport their cigarettes.
Native American Indian retailers will respond by shipping cigarettes to smokers using the U.S. Postal Service, thereby avoiding the sales ban, the complain charges.
Earlier this month, the federal court in Manhattan ruled that a constitutional challenge to another New York law, prohibiting direct-to- consumer shipments of alcoholic beverages, could proceed.
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