Press Releases

Tobacco Companies Reach Settlement to Pay Back $81 Million in Delinquent Payments Owed to Minnesota

Minnesotans for a Smoke-Free Generation Urges Lawmakers to Dedicate Portion of Recouped Funds to Tobacco Prevention

St. Paul, Minn. – This week, two major tobacco companies – R.J. Reynolds Tobacco Company (Reynolds) and ITG Brands – reached a settlement to pay Minnesota $81 million in unpaid tobacco settlement fees. These companies have not paid their required share of settlement fees to the state since 2015. Minnesotans for a Smoke-Free Generation, a coalition of more than 60 organizations that share a common goal of reducing youth tobacco use and ending tobacco’s harm for good, applauded the state for recouping these delinquent fees and urged lawmakers to dedicate a portion of those funds to youth tobacco prevention. Minnesota lawmakers in both chambers have introduced bipartisan legislation (HF1410/SF1484) that would dedicate $15 million a year from delinquent settlement payments to tobacco prevention and treatment.

“This is an important victory that holds Big Tobacco accountable for the death and disease they cause Minnesota,” said Molly Moilanen, Vice President at ClearWay Minnesota^SM and Co-Chair of Minnesotans for a Smoke-Free Generation. “Dedicating these funds to tobacco prevention and treatment would save lives and help Minnesota achieve long-lasting health gains. As ClearWay Minnesota reaches our sunset, commercial tobacco remains a threat, especially when it comes to the youth e-cigarette epidemic and racial disparities.”

In 2015, Reynolds and Lorillard merged, and four of their popular cigarette brands – KOOL, Maverick, Salem and Winston – were sold to ITG Brands to avoid antitrust laws. Since then, neither Reynolds nor ITG has paid Minnesota the settlement fees on those cigarette brands, which are required in perpetuity as part of the 1998 Minnesota Settlement Agreement. ITG and Reynolds agreed to terms for paying back settlement fees owed to Minnesota from 2015 to 2020, which total more than $81 million and are owed to the state by March 31, 2021. Moving forward, ITG will make the annual settlement payments on the disputed brands.

Smoking costs Minnesota an estimated $7 billion annually and takes the lives of more than 6,300 residents every year. There is an urgent need to increase tobacco prevention and treatment. Minnesota faces stalled adult smoking rates and commercial tobacco causes disproportionate harms in Black, Indigenous, LGBTQ and other communities targeted by the tobacco industry. The COVID-19 pandemic adds urgency to prevention efforts, since current and former smokers are at increased risk for severe illness from COVID-19. To make matters worse, communities targeted by the tobacco industry are some of the hardest hit by COVID-19.

For more than two decades ClearWay Minnesota, the foundation created with 3 percent of the state’s initial tobacco settlement, has provided the majority of funding for tobacco prevention in Minnesota. ClearWay Minnesota will sunset at the end of 2021, leaving a gap in prevention resources. Meanwhile, Minnesota took in nearly $760 million in tobacco revenue and spent only 1 percent of that total on commercial tobacco prevention and treatment.

In addition to racial disparities and the COVID-19 pandemic, Minnesota needs an all-hands-on-deck approach to reverse the youth tobacco epidemic and protect the next generation from lifelong addiction. Youth vaping has erased decades of progress to reduce youth tobacco addiction and one in five Minnesota high-school students uses e-cigarettes.

“We are grateful for Attorney General Ellison’s leadership in holding Big Tobacco accountable,” Moilanen added. “We urge Governor Walz and legislators to invest these funds in sustainable efforts to prevent the next generation of tobacco addiction.”

Minnesotans for a Smoke-Free Generation urges lawmakers to take a comprehensive approach to reduce youth tobacco use, including increasing tobacco prices, ending the sale of all flavored tobacco products and investing in tobacco prevention programs.

More info:

• Fact sheet: Funding tobacco prevention and treatment
• Case information: County of Ramsey, Second Judicial District. Court File No: 62-CV-18-1912

About Minnesotans for a Smoke-Free Generation

Minnesotans for a Smoke-Free Generation is a coalition of more than 60 organizations that share a common goal of saving Minnesota youth from a lifetime of addiction to tobacco. The coalition supports policies that reduce youth smoking and nicotine addiction, including increasing tobacco prices, ending the sale of menthol and all flavored tobacco products, and funding tobacco prevention and treatment programs.

Partners include: The African American Leadership Forum, Allina Health, Allina Health | Aetna, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association in Minnesota, Apple Tree Dental, Association for Nonsmokers – Minnesota, Aurora/St. Anthony Neighborhood Development Corporation, Becker County Energized, Blue Cross and Blue Shield of Minnesota, A Breath of Hope Lung Foundation, Cancer Legal Care, CentraCare, Children’s Defense Fund-MN, Children’s Minnesota, ClearWay Minnesota^SM, Comunidades Latinas Unidas En Servicio – CLUES, Dodge County Public Health, Education Minnesota, Essentia Health, Gillette Children’s Specialty Healthcare, A Healthier Southwest, HealthPartners, Hennepin Healthcare, Horizon Public Health, Indigenous Peoples Task Force, ISAIAH, JustUs Health, LAAMPP Alumni, Lake Region Healthcare, Local Public Health Association of Minnesota, LPCFC – Lincoln Park Children and Families Collaborative, March of Dimes, Masonic Cancer Center – University of Minnesota, Mayo Clinic, Medica, Meeker McLeod Sibley Community Health Services, Minnesota Academy of Family Physicians, Minnesota Association of Community Health Centers, Minnesota Cancer Alliance, Minnesota Council of Health Plans, Minnesota Dental Association, MHA – Minnesota Hospital Association, Minnesota Medical Association, Minnesota Nurses Association, Minnesota Oral Health Coalition, Minnesota Public Health Association, Minnesota Society for Public Health Education, MNAAP – Minnesota Chapter of the American Academy of Pediatrics, ModelCities, NAMI Minnesota, North Memorial Health, NorthPoint Health & Wellness, Olmsted Medical Center, Open Cities Health Center, PartnerSHIP 4 Health, Perham Health & Living, Preventing Tobacco Addiction Foundation, SEIU Healthcare Minnesota, ShiftMN, St. Paul Area Chamber of Commerce, Steele County Public Health, Tobacco-Free Alliance, Twin Cities Medical Society, UCare, Vision In Living Life – Change is Possible, WellShare International and Zumbro Valley Medical Society. Find out more at: smokefreegenmn.org.