Big Tobacco Spending Big Money to Fight State Bans, Taxes [Wall Street Journal]
Summary: Big Tobacco is spending heavily to defeat upcoming ballot measures that aim to restrict smoking and raise cigarette prices. The biggest battleground this November is California, which has a ballot initiative that would raise $2.1 billion a year for the state by increasing the tax on a pack of cigarettes a further $2.60. Reynolds (NYSE:RAI) and Altria (NYSE:MO) have joined forces, pledging a combined $55 million to fight the tax increase. In contrast, proponents of the tax increase, mostly hospitals, are spending about two thirds less that the tobacco companies. Political analysts believe that tobacco companies are going on the offensive to counter anti smoking activism which has enabled 41 states to pass cigarette tax increases during the past five years. Besides California, Arizona, Missouri, Nevada, Ohio and South Dakota are the other major front lines for tobacco during the upcoming election season.
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Potentially impacted stocks and ETFs: Carolina Group (NASDAQ:CG), Vector Group (NYSE:VGR), Star Scientific (STSI), Gallaher Group (GLH), British American Tobacco(NYSEMKT:BTI), Imperial Tobacco Group (ITY).
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