Talks between leading tobacco companies and state prosecutors about a national settlement are at an impasse, negotiators said.
"We've reached a point where we've run out of ideas on some significant issues," North Carolina State Attorney General Mike Easley said Tuesday.Easley noted that the talks have not broken down completely, however.
Negotiators met for four days last week in New York, with some progress reported by state attorneys general. Talks had been expected to resume Tuesday but were called off because "we don't have any new information to share," Easley said in a conference call with reporters. No direct talks have been scheduled for next week either, he said.
Among the major hurdles to further progress is a "renegade provision" that would force all tobacco companies - those not participating in the talks and those that may appear in the future - to abide by the settlement, Easley said.
"There are 60 tobacco companies in the country and we're only dealing with the five biggest companies," he said. "We need to be concerned with future non-participating manufacturers. Otherwise, in 10 years the settlement will just go to pieces."
He said both sides remained stuck on "difficult, non-economic issues" such as tobacco marketing and distribution restrictions, though he declined to elaborate. The tobacco industry appears unwilling to commit to marketing restrictions beyond those established in the Minnesota state settlement - bans on billboard advertising, branded merchandise and tobacco ad placements in movies.
The states want more: strict controls on transit signs and tobacco marketing in convenience stores, bans on ads in magazines with high youth readership, and special gift premiums to smokers who stick with the same cigarette brand.
The attorneys general "remain willing to discuss with tobacco companies a suitable settlement for both sides," said Fred Olson, a spokesman for Washington Attorney General Christine Gregoire.
But as far as marketing restrictions go, a national settlement would have "to build on the separate agreements already made in Texas, Minnesota, Mississippi and Florida," he said.
That may slow down the negotiations for several weeks, said Gary Black, an analyst for the New York investment firm Sanford C. Berstein & Co., who disclosed last month that direct negotiations for a national settlement would be renewed.
"Our sources close to the settlement talks indicate that we are still three to four weeks from a deal," he said.