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Home / Articles / News / Local News /  Indicators: June 3

Indicators: June 3

Smoke Broke

June 3, 2009, 12:00 am

259%   was added to the federal cigarette tax in April, a 62-cent-per-pack increase.
294%   more Santa Fe County residents called the state’s tobacco “quit line” in three months leading up to the tax hike than in the prior quarter.

"[I]t’s possible that the person who viewed the finished film—studio policemen not being the hippest people in the room—may have thought that American Spirit was an invented product, not an actual brand."—Los Angeles Times writer Patrick Goldstein on how the Santa Fe-founded brand of smokes wound up prominently featured in the film He’s Just Not That Into You

Of all the times in life that beg for a cigarette—pre-drink, post-sex—mid-recession may be the most justifiable.

But the increased federal cigarette tax of $1.01 per pack, which took effect in April, has made tobacco prices not only higher, but more unpredictable.

Meanwhile, New Mexico Attorney General Gary King’s office is taking the last best hope of broke smokers—discount cigarette purveyors—to court.

In the past two months, King’s office has filed several lawsuits against tobacco companies from out of state that imported “contraband” smokes. The companies all sold to an Albuquerque company, Hemi Group, that ran shops online and on Jemez Pueblo.

The lawsuits came out of a “compliance inspection” by state tax inspectors on Aug. 20, 2008 at Hemi’s Albuquerque warehouse. There, inspectors found smokes produced by companies in Florida, North Carolina and beyond. One company, GTC Industries, was based in Mumbai, India and allegedly sold 305,500 packs of cigarettes to Hemi, then owned by Kai Gachupin of Albuquerque.

King’s office says GTC should have deposited $5,758 toward the state’s tobacco settlement trust fund. The fund, a product of the 1998 settlement by dozens of state AGs and tobacco companies, netted New Mexico $45.6 million last year.

Randolph Barnhouse, Hemi Group’s attorney, says the settlement terms made King and other state attorneys general “partners” to “big tobacco,” as the large tobacco makers were required to pay into state trust funds in order to legally sell their product.

The arrangement, Barnhouse says, gives the state incentive to shut down discount dealers like Hemi and GTC.

“It’s shameful, in my opinion,” he says

 

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