Master Settlement Agreement, or a Masterful Status-quo Agreement?
November 23, 2008 marks ten years since 46 state Attorneys General and the major American tobacco companies signed the big tobacco Master Settlement Agreement (MSA). Besides being the largest legal settlement in history and resolving an unprecedented onslaught of litigation against the industry, the MSA required tobacco companies to pay approximately $200 billion to the states over 25 years (subject to tweaks for inflation and market share).
The devil, however, was in the details. Heralded at the time as a defeat for the tobacco industry and a victory for public health, the MSA has actually done little to change the status quo. It ended some forms of tobacco advertising, for example, but the restrictions adopted were in reality less important to the industry than to public health authorities. The industry abandoned billboards and transit ads, ads in magazines with a high youth readership, and ads within a certain distance of schools. However, it continued marketing through high levels of advertising, bar nights, event sponsorships, direct mail, and retail placements.