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In an enforcement action challenging the adequacy of health warnings on the packages and in the advertisements of smokeless tobacco products, the Federal Trade Commission today announced it has agreed to settle charges against Stoker, Inc., based in Dresden, Tennessee. The FTC alleged that Stoker violated the Comprehensive Smokeless Tobacco Health Education Act of 1986 (Smokeless Tobacco Act) and its regulations by failing to place the health warning statements in conspicuous and legible type, and in a conspicuous and prominent place on the package. Under a proposed agreement to settle the charges, Stoker would be prohibited from violating any provision of the Smokeless Tobacco Act or the regulations.

The Smokeless Tobacco Act was enacted in 1986 following a report from the U.S. Surgeon General concluding that the use of smokeless tobacco products poses significant health risks. Congress empowered the FTC to bring suits for violations of certain provisions of the Act, including the health warnings on packages and in advertisements. The Act requires three rotational warnings on product packages and in most advertisements. For packaging, the Act directs that the health warnings appear in a conspicuous and prominent place on the package and in a conspicuous format with legible type in contrast with all other printed material. For ads, the Act directs that the warnings be displayed in a circle-and-arrow format in a conspicuous and prominent place and in legible type in contrast to all other printed materials. The Act also directs the FTC to issue implementing regulations governing the format and display of the statutory health warnings. Both the Act and the FTC's regulations require that smokeless tobacco manufacturers, packagers and importers submit plans specifying how they will comply to the FTC for approval.

According to the FTC's complaint, certain of Stoker's smokeless tobacco products did not bear the health warning statements in conspicuous and legible type. The products included 16 ounce packages of smokeless tobacco that had the health warning statements printed in 5 point type (This is five point type). The complaint also alleges that the health warning statements on certain of Stoker's smokeless tobacco products were not in a conspicuous and prominent place on the package. The complaint further alleges that certain of Stoker's advertisements did not bear the health warning statements in conspicuous and legible type and within the correct size circle and

arrow format. Finally, the complaint alleges that since 1987, Stoker has packaged, manufactured or imported smokeless tobacco products without submitting to the FTC a plan specifying the method it would use to rotate, display, and distribute the health warning statements on its packages and advertisements

The proposed order, announced today for public comment, would prohibit Stoker from future violations of the Smokeless Tobacco Act and regulations. The order contains various record keeping and reporting provisions to assist the FTC in monitoring the respondent's compliance.

The Commission vote to accept the proposed consent agreement and place it on the public record was 5-0. A summary of the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 30 days, until May 21, 2001, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaint, the proposed consent agreement and analysis to aid public comments are available from the FTC's web site at http://www.ftc.gov   and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Brenda Mack

Office of Public Affairs

202-326-2182

Michael Ostheimer

Bureau of Consumer Protection

202-326-2699

(FTC File No. 012 3015)

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