LOUISVILLE, Ky. — Brown & Williamson Tobacco is beginning to sell its less-popular brands through catalogs as a convenience to smokers.
Critics of B&W's plans accuse the company of devising a creative way to undermine regulations aimed at protecting children from the marketing of tobacco products.
Direct sales will begin in nine states — California, Kentucky, Florida, Georgia, Michigan, North Carolina, Texas, Oregon and Massachusetts — but will expand later on, the company said.
B&W brands, such as Misty and Capri, will be sold by phone, fax or mail, and eventually over the Internet.
B&W said all excise taxes will be included in the price of cigarettes sold directly.
"Almost all of the Web sites out there (selling cigarettes) do not collect taxes and do not ensure age verification as we do," said Smith, defending the company's venture and calling it the first of its kind in the industry.
Thousands of catalogs will be mailed by the end of next week.
"Most retailers limit the cigarette brands and brand styles they stock, displaying only those with a significant market share," said John Heironimus, president of BWT Direct and vice president of its parent company. "The result has been that many loyal, longtime customers of some of B&W's traditional products have difficulty locating those products."
But tobacco critics are suspicious of the venture, saying it seems aimed at building new customers. Anti-smoking advocates are particularly concerned about protecting children from direct sales.
"What they are doing with catalog sales is opening up a potential whole new way to market their product," said Ahron Leichtman, executive director of Citizens for a Tobacco-Free Society.
"And while the industry says it is putting in place a strategy to prevent those sales to minors, in the past they have proven to be ineffective in prohibiting those illegal sales," Leichtman added.
Karen Brotzge, BWT Direct's executive vice president, said the company will only send catalogs to smokers whose ages have been verified and that it will only sell to people 21 or older. She said the company has hired a database firm to verify that customers are adults.
When BWT cannot independently verify a potential customer's age, the company will send out an age-verification packet, she said. The packet must be returned with a copy of a driver's license or other government-issued identification card.
"Without age verification, no purchase can be made," Brotzge said.
B&W brands to be sold in catalogs include Carlton, Misty, Capri, Barclay, Tareyton, Raleigh, Belair, Tall and Silva
Thins. Combined, those brands account for 3.5 percent of the total U.S. cigarette market, said B&W spokesman Mark Smith.
B&W is setting a minimum two-carton purchase through direct sales, and the prices will not be less than what people pay at retail stores.
"We are not undercutting the market," Smith, the spokesman, said. "We are just making sure there is a way for consumers to get these products."
The company's best-selling brands — Kool, Lucky Strike and GPC — will not be sold in catalogs.
David Adelman, a tobacco industry analyst with Morgan Stanley Dean Witter, credited Brown & Williamson with developing a unique way of attempting to prevent customers from switching to more accessible brands.
"It's not an effort to make these powerful brands," said David Adelman with Morgan Stanley Dean Witter. "These are brands that are losing distribution. There are people who would like to continue smoking them, but they can't find them. I think it's a reasonable alternative."
Adelman did not express concern about minors gaining access to cigarettes through direct sales. He said the B&W brands being sold directly are not popular among youths. What's more, minors do not generally buy by the carton and they do not want to wait for delivery in the mail, Adelman said.
Indeed, it is the marketing creativity that B&W has shown that worries people like Leichtman. He said direct sales of cigarettes represent one more reason for the next Congress to take up regulation of the tobacco industry.
"Catalog and Internet sales are going to have to be dealt with," he said, "or else a huge loophole will be created in the marketing of tobacco products to youths."