Federal Trade Commission
Received Documents
Jan. 22, 1996
B18354900096

BROWN & WILLIAMSON
TOBACCO CORPORATION                                                                      2 1996 1
1500 Brown & Williamson Tower
Louisville, Ky. 40232
(502) 568-7000, (502) 568-7476
FAX (502) 568-8335

ERNEST PEPPLES
Senior Vice President


                         January 22, 1996

VIA HAND DELIVERY

Office of the Secretary
Federal Trade Commission
Room 159
Sixth and Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Attn:     Mr. Robert Easton,
     Special Assistant, Division of Enforcement

      Re: "Made in USA Policy Comment," FTC File No. P894219


Dear Mr. Easton:
         Brown & Williamson Tobacco Corporation, 1500 Brown & Williamson Tower,
Louisville, Kentucky ("B&W"), herewith submits comments in response to the Federal Trade
Commission's ("Commission") Request for Public Comment in Preparation for Public Workshop
Regarding "Made in USA" Claims in Product Advertising and Labeling, published in the Federal
Register on October 18, 1995, 60 Fed.  Reg. 53,922.  The time for filing comments has been
extended under January 22, 1996 and, therefore, these comments are timely filed.
         B&W is a domestic manufacturer of cigarettes and other tobacco products.  All B&W
product made for the U.S. market is manufactured in Macon, Georgia, Reidsville, North Carolina
and Winston-Salem, North Carolina.  B&W also owns tobacco processing facilities in Chester,
Virginia, Wilson, North Carolina and Lancaster, Pennsylvania.
         B&W submits that the Commission's current "all or virtually all" domestic content
standard for "Made in USA" claims is inconsistent with current consumer expectations and should
be reexamined.  B&W believes that U.S. cigarette consumers expect that the product will contain
some portion of foreign tobacco or other foreign material.  For example, "Americanblend"
cigarettes by definition include Oriental-style tobacco which is not produced in commercial
quantities in the United States.  Virtually all cigarettes consumed in the U.S. are American-blend
cigarettes.
         B&W also submits that the Commission's current standard is confusing and difficult for
manufacturers to apply.  The result would be that many cigarette and tobacco products that
contain predominantly U.S. content would not be permitted to be labeled as "Made in USA." In
some export markets, these products are required to be marked "Made in USA."
         B&W believes that the Commission should adopt a well-established standard for "Made in
USA" marking that is consistent with origin determinations made for other purposes.  Specifically,
B&W believes that the domestic content requirement of the Buy American Act is appropriate. 
Under the Buy American Act, a product must contain at least 50% U.S. content and be subject to
final manufacture in the United States.  B&W believes that adoption of this standard for "Made in
USA" claims will provide manufacturers with a clear set of guidelines that are workable.
         In measuring domestic content, B&W further believes that certain foreign raw materials
that are subject to a significant processing operation in the United States and then used further in
the production of the finished good should be counted as "U.S. origin." For example, if the raw
material used to make cigarette filters is imported and used to make cigarette filters that are again
used to make cigarettes, that raw material should count towards the 50% domestic content
requirement.  This is similar to the U.S. Customs Service's "double substantial transformation"
test.
         Most of B&W's products contain less than 10% foreign content.  Notwithstanding this,
B&W would support the Commission's adoption of a Buy American 50% domestic content
standard, because it will provide certainty to manufacturers and still properly protect consumer
expectations.
         If you have any questions or require additional information, please contact the
undersigned.
Respectfully submitted, 
Ernest Pepples
Senior Vice President