TALLAHASSEE -- Big Tobacco appears more ready than ever to accept a higher tax on cigarettes that would raise Florida smokers' costs by up to $1 a pack. But there's a catch -- in return, it wants lawmakers' help fending off a rising competitor from Opa-locka that makes dirt-cheap smokes.

Manufacturer Dosal Tobacco has seized about 14 percent of the state cigarette market with its 305's brand, which cost roughly a third less than some of its better-known rivals.

Big tobacco firms like Philip Morris USA say Dosal Tobacco has an unfair business advantage because, unlike them, Dosal doesn't have to pay settlement fees in Florida's landmark $11.3 billion tobacco settlement over deceptive marketing and the cost of treating sick smokers with Medicaid money.

The big companies have passed on the fees to their customers, about 50 cents a pack. That's in addition to Florida's 33.9-cent cigarette tax that smokers, including Dosal's customers, pay.

Now, legislators are considering boosting the tax to raise about $1 billion a year. Facing record budget deficits of up to $6 billion over two years, support for the new tax has grown even among Republicans.

So giants like Reynolds American, Philip Morris and Lorillard Tobacco see a threat as well as an opportunity. Some have signaled to lawmakers that they'd be more willing to accept some tax -- but only if Dosal gets hit with a fee as well, lawmakers, lobbyists and Dosal officials told the Herald/Times.

''We have a big target on our back,'' said Dosal's chief legal counsel, Guillermo J. Fernandez-Quincoces. ``This is our last stand.''

Dosal says it shouldn't have to pay a fee because it was dismissed from the 1997 tobacco case. The company has been lobbying hard to make its point.

The company poured nearly $360,000 into the campaign coffers of Republican and Democratic legislators throughout Florida this election cycle -- just $32,000 shy of the total contributions by the Big Tobacco firms.

Dosal also has deployed a team of 26 lobbyists -- two more than the three big firms combined -- who have begun patrolling the Capitol's halls three months before the regular lawmaking session starts.

The large cigarette makers aren't publicly discussing their strategy.

''We oppose any increase in the state excise tax on tobacco,'' said Reynolds spokesman Frank Lester.

But he added that imposing a settlement fee on Dosal ``would provide a level playing field for manufacturers in Florida.''

If a tax seemed inevitable, would the company be willing to support it in return for such a fee?

''I'm not going to go there. I can't predict into the future,'' Lester said, echoing comments from a Lorillard written statement and Philip Morris spokesman David Sutton.

Sutton said the company's main focus is opposing a tax. Citing studies, he said smokers will flock to Alabama and Georgia if Florida ''substantially'' raises its tax, which could also encourage contraband smuggling.

A new settlement fee on Dosal and other discount makers could raise an additional $90 million yearly for the state, proponents say. Dosal says the fee will bring in much less money because the firm eventually would be forced out of business as its customers start buying better-known cigarettes if the price is almost the same.

A pack of 305's costs more than $2, while a pack of Marlboro Reds costs less than $4.

Florida's tax is the 46th-lowest in the nation. The national average tax per pack: $1.19. Average retail price per pack: about $4.25.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@