ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, October 20, 1996 TAG: 9610210085
SECTION: NATIONAL/INTERNATIONAL PAGE: A-4 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: The New York Times
The tobacco industry is campaigning on Capitol Hill to block a Pentagon plan to raise the price of discounted cigarettes sold in scores of military grocery stores around the world, lawmakers and their top aides say.
The military sells $458million of cigarettes and chewing tobacco a year in government-subsidized supermarkets, called commissaries, at prices 30 percent to 60 percent lower than in commercial grocery stores. Commissaries sell 58 million cartons of cigarettes a year.
Government budget analysts estimate that the new policy could cut tobacco sales at commissaries in half and cost tobacco companies as much as $200million a year in sales.
Under the Pentagon's plan, which is scheduled to take effect Nov. 1, the government would end its subsidy of commissary tobacco products in an effort to discourage tobacco consumption among troops. The price of a carton of brand-name cigarettes would rise to about $15.50 from $11.50, compared with $17.50 for stores off the bases. The subsidy now amounts to at least $30million a year, said a Pentagon official who works with the commissaries.
One of every three members of the military smokes tobacco, a slightly higher percentage than in the general population. However, 70 percent of the tobacco products are being bought by retirees.
A new Defense Department report estimated that tobacco use by military personnel costs the agency more than $900 million a year in medical expenses and lost productivity.
But at the urging of the tobacco industry's powerful lobby, a panel of the House National Security Committee has demanded in a letter signed by all 12 members that the Pentagon cancel the price increase.
Tobacco, lawmakers say, is not the issue; the main issue, they say, is that the Pentagon failed to consult Congress and violated federal pricing rules that require the commissaries to sell all their products at ``the lowest practical price.'' Lawmakers also expressed concern that this would set a bad precedent.
``These kind of changes require congressional authorization, and I'd be saying that whether it was tobacco or rosary beads,'' said Rep. John McHugh, R-N.Y., who heads the National Security Committee's oversight panel on military morale, welfare and recreation.
But 11 of the 12 lawmakers on the House panel received money in the past two years from the political action committees of tobacco companies or conglomerates, such as Philip Morris Cos., which owns tobacco concerns, according to a review of Federal Election Commission reports by Common Cause, the public lobby. The only panel member who did not was Rep. Glen Browder, D-Ala., who is retiring.
Many panel members are from tobacco-growing states, such as Virginia, and defended the tobacco industry and their decision.
The Pentagon announced its proposed pricing change Aug. 23. Coincidentally, Pentagon officials say, President Clinton announced measures on the same day to keep tobacco companies from encouraging children to smoke.
During the week of Sept. 17, tobacco company representatives met at the Tobacco Institute offices in Washington to hammer out their lobbying campaign, industry officials familiar with the meeting said.
Lobbyists agreed at the meeting to emphasize to lawmakers and their aides the legal questions and oversight role, rather than the impact on the tobacco industry's sales, the officials familiar with the meeting said.
``They thought it'd be counterproductive to emphasize tobacco,'' said a senior industry official, who spoke on the condition of anonymity.
Frederick Pang, assistant secretary of defense for force management policy, said it was inconsistent for the Pentagon to subsidize the cost of tobacco products while paying for the medical expenses of troops with tobacco-related disease.
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