Letter From Mary Engle, Associate Director, Division of Advertising Practices, To Mark S. Brown, Esq.

United States of America
FEDERAL TRADE COMMISSION
Washington, DC 20580
Division of Advertising Practices
Bureau of Consumer Protection
May 9, 2017
Mark S. Brown, Esq.
King & Spalding LLP
1700 Pennsylvania Ave., NW
Suite 200
Washington, DC 20006-47078
Re: 	Request for Informal Staff Guidance Regarding Santa Fe Natural Tobacco
Company’s Consent Order (FTC Dkt. No. C-3952)
Dear Mr. Brown:
The Division of Advertising Practices has reviewed your letter submitted on behalf of
RAI Services Company (“RAI”) and Santa Fe Natural Tobacco Company (“Santa Fe”), dated
March 9, 2017, requesting informal staff guidance concerning the Federal Trade Commission’s
consent order with Santa Fe (“Consent Order”).1 The consent order requires, among other
things, a disclosure that “No additives in our tobacco does NOT mean a safer cigarette” in any
cigarette advertisement that, through the use of phrases such as “no additives,” “no chemicals,”
“additive free,” “chemical-free,” “chemical-additive free,” “100% tobacco,” “pure tobacco,” or
substantially similar terms, represents that a tobacco product has no additives or chemicals
(“cigarette disclosure”).2
This request for guidance was precipitated by a Memorandum of Understanding that
RAI/Santa Fe entered into with the U.S. Food and Drug Administration’s (“FDA”) Center for
Tobacco Products in January 2017. Under the Memorandum of Understanding, RAI/Santa Fe,
agreed, among other things, to remove the phrase “Additive Free” and the term “natural” from
1 Your letter attaches the Santa Fe agreement, which was accepted for public comment on
April 27, 2000. On June 16, 2000, the Commission made final that agreement and issued its
Decision and Order (FTC Dkt. No. C-3952). See https://www.ftc.gov/enforcement/cases-
proceedings/992-3026/santa-fe-natural-tobacco-company-inc.
2 The Consent Order also requires a triggered disclosure in connection with advertising and
packaging for herbal smoking products, and other remedies. This letter addresses only the
requirements for the cigarette disclosure and does not provide guidance on other provisions of
the Consent Order.

Mark S. Brown, Esq.
Page 2
May 9, 2017
all Natural American Spirit cigarette product labels, labeling, advertising, and promotional
materials, except that Santa Fe may retain the use of the term “Natural” in the “Natural American
Spirit” brand name and trademarks. 3 The Memorandum of Understanding permits Santa Fe to
use the phrases “Tobacco Ingredients: Tobacco & Water” or “Tobacco Filler Ingredients:
Tobacco & Water” if it chooses to do so.
RAI and Santa Fe request staff guidance on two issues. First, they seek staff guidance as
to whether use of the phrases “Tobacco Ingredients: Tobacco & Water” or “Tobacco Filler
Ingredients: Tobacco & Water” triggers the cigarette disclosure required in the FTC’s Consent
Order. As stated above, the Consent Order’s cigarette disclosure is triggered whenever a covered
Santa Fe advertisement uses the specific terms identified in the order or any substantially similar
term that represents, directly or by implication, that a tobacco product has no additives or
chemicals. It is well-established that whether a claim is reasonably conveyed in an
advertisement requires an examination of the entire advertisement and an assessment of the
overall net impression(s) conveyed. POM Wonderful, LLC v. FTC, 777 F.3d 478, 490 (D.C. Cir.
2015. Accord ECM Biofilms, Inc. v. FTC, No. 15-4339, U.S. App. LEXIS 4609, at **14-15 (6th
Cir. Mar. 16, 2017). Thus, determining whether use of the two referenced phrases would
constitute “substantially similar terms” that trigger the cigarette disclosure in the Consent Order
would require an evaluation of specific advertisements in their entirety, and not simply an
evaluation of specific words or phrases. For that reason, we cannot definitively opine whether
use of the phrases “Tobacco Ingredients: Tobacco & Water” or “Tobacco Filler Ingredients:
Tobacco & Water” would trigger the cigarette disclosure required in the FTC’s Consent Order. 4
Looking solely at the phrases, however, raises concerns that, depending on the context,
consumers could reasonably interpret advertisements containing the phrases at issue to mean that
Santa Fe Natural American Spirit cigarettes contain no additives or chemicals. In particular, the
phrases are very similar to “100% tobacco” and “pure tobacco” – each of which specifically
triggers the cigarette disclosure. In addition, advertisements permitted under the Memorandum
of Understanding would continue to use the term “Natural” as part of the “Natural American
Spirit” brand name, potentially adding to an impression that the advertised cigarette contains no
additives or chemicals.
3 A copy of the Memorandum of Agreement is attached to your March 9, 2017 letter. In 2009,
Congress enacted the Family Smoking Prevention and Tobacco Control Act (“Tobacco Control
Act”), which gives FDA broad authority over cigarettes and other tobacco products. It is under
that authority that RAI/Santa Fe entered into the Memorandum of Agreement with FDA. We did
not analyze and provide no guidance concerning RAI/Santa Fe’s compliance with the Tobacco
Control Act or any provision therein.
4 In accordance with Section 1.1 of the Commission’s Rules of Practice and Procedure, 16
C.F.R. § 1.1, we do not ordinarily provide advice if an informed opinion cannot be made or
could be made only after extensive investigation, clinical study, testing or collateral inquiry.

Mark S. Brown, Esq.
Page 3
May 9, 2017
The second issue that RAJ/Santa Fe seek staff guidance on is whether they can replace
the Consent Order's required disclosure with the following disclosure: "Natural American Spirit
cigarettes are not safer than other cigarettes." The Memorandum of Understanding states that
FDA does not object to this disclosure. Although this disclosure differs from that set out in the
Consent Order, both disclosures convey the core message that Santa Fe cigarettes are not safer
than other cigarettes. 	Thus , FTC staff would not recommend an enforcement action with respect
to the mandated language of the cigarette disclosure if RAI/Santa Fe used the requested
disclosure rather than the specific language set out in the Consent Order as long as the disclosure
was displayed clearly and prominently as set forth in the Consent Order.
The views expressed in this letter are those of FTC staff. They have not been reviewed,
approved, or adopted by the Commission or any individual Commissioner. They are not binding
upon the Commission, and the views are given without prejudice to the right of the Commission
to later rescind the guidance and, when appropriate, to commence an enforcement proceeding.
In addition, the views expressed in this letter are restricted to the facts described above. FTC
staff retains the right to reconsider its advice and, with notice to the requesting parties, rescind or
revoke its guidance ifit would be in the public interest to do so.
Pursuant to Section 1.4 of the Commission's Rules of Practice and Procedure, 16 C.F.R.
§ 1.4, this response, along with your request for staff guidance, will be placed on the public
record.
Very truly yours,
/Mt,{L ~' 	TMaryK.aAssociate Director for Advertising Practices
cc: 	Ann Simoneau, J.D.
Director, Office of Compliance and Enforcement
Center for Tobacco Products
U.S. Food and Drug Administration

KING 	& 	SPALDING King & Spalding LLP
1700 Pennsylvania Ave, NW
Suite 200
Washington, D.C. 20006-4707
Tel: + I 202 737 0500
Fax: + I 202 626 3737
www.kslaw.com
Mark S. Brown
Partner
Direct Dial : + I 202 626 5443
Direct Fax: + I 202 626 3737
mbrown@kslaw.com
March 9, 2017
Via Electronic Mail
Rosemary Rosso
Division of Advertising Practices
Federal Trade Commission
Constitution Center
5th Floor, Suite 5610 (Annex J)
400 ?1h Street, SW
Washington, DC 20024
Re: 	Request for Informal Staff Guidance Regarding 2017 Agreement Between
Santa Fe Natural Tobacco Company and U.S. Food & Drug Admi nistration
Dear Ms. Rosso:
As you know from our letter dated January 31, 201 7, and from our recent discussions, we
represent RAI Services Company and Santa Fe Natural Tobacco Company (hereinafter "Santa
Fe") in connection with an agreement between Santa Fe and the U.S. Food & Drug
Administration ("FDA") concerning the removal of the phrase "Additive Free" from all Natural
American Spirit cigarette product labels, labeling, advertising, and promotional materials. Santa
Fe expressly reserved the right, in the agreement with FDA, to include the statement "Tobacco
Ingredients: Tobacco & Water" or "Tobacco Filler Ingredients: Tobacco & Water."
Under the terms of Santa Fe's April 27, 2000 Consent Order with the FTC (File No. 992
3026; Attachment A), Santa Fe agreed to include the disclosure "No additives in our tobacco
does NOT mean a safer cigarette" (for cigarettes) or ''No additives in our tobacco does not mean
safer" (for tobacco products other than cigarettes) on any advertisement that "through the use of
such phrases as "no additives," "no chemicals," "additive-free," "chemical-free ," "chemical
additive-free," "100% tobacco," "pure tobacco," or substantially similar terms, represents that a
tobacco product has no additives or chemicals." (Emphasis supplied).
In the time since Santa Fe entered into the Apri l 2000 Consent Order with the FTC,
Congress enacted the Family Smoking Prevention and Tobacco Control Act ("Tobacco Control
Act"). The Tobacco Control Act gives FDA broad authority over tobacco products, but provides

Rosemary Rosso
March 9, 2017
Page 2
for concurrent, overlapping jurisdiction between FDA and the FTC with regard to regulation of
advertising practices. See 21 U.S.C. § 387n.
Under the Tobacco Control Act, manufacturers must obtain clearance from FDA to
market tobacco products as "modified risk tobacco products." The term "modified risk tobacco
product" is defined as any tobacco product that is "sold or distributed for use to reduce harm or
the risk of tobacco-related disease associated with commercia ll y marketed tobacco products." 2 1
U.S.C. § 387k(b)( l ). Whether a product is "sold or distributed for use to reduce harm or the risk
of tobacco-related disease" is determined, in part, based on the product 's label, labeling, and
advertising. It is under this authority that Santa Fe entered into the January 2017 agreement with
FDA.
To assure that Santa Fe continues to meet its obligations under the 2000 Consent Order, it
now seeks an informal, written opinion from the FTC 's Division of Advertising Practices on the
following two questions:
(1) Are the phrases " Tob acco Ingredients: Tobacco & Water" or "Tobacco Filler
Ingredient s: Tobacco & Water" "substantia ll y similar terms" under the 2000 Consent
Order such that their use triggers the disclosure requirement of the 2000 Consent Ord er!?
(2) If"Tobacco Ingredients: Tobacco & Water" or "Tobacco Filler Ingredients: Tobacco
& Water" are deemed substantia ll y similar terms, would the FTC either permit or not
otherwise object to Santa Fe replacing the disclosures required under the 2000 Santa Fe
Consent Order with the following disclosure: "N atural American Spirit cigarettes are not
safer than other cigarettes."
We thank you for your attention to this matter, and look forward to a productive dialogue.
If you require any additional information, please contact me at (202) 626-5443 or
mbrown@kslaw.com.
Sincerely,
Attachments:
A: April 27, 2000 FTC Consent Decree
B: January 23, 2017 FDA Memorandum of Agreement
cc: 	Ann Simoneau (w/attachments)
Ele Ibarra-Pratt (w/attachments)
Mitch Neuhausuer (w/attachments)

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CONFIDENTIAL, NOT l•'OH PUBLIC DISCLOSURE
Vin UPS O\•ernight
January 23, 2017
Ann Simoneau, J.D.
Office of CompIiance and Enforcement
FDA Center for Tobacco Products
c/o Document Control Center
Building 71, Room 0335
I0903 New Hampshire Avenue
Silver Spring, Maryland 20993 -0002
Dear Ms. Simoneau:
Enclosed please find an executed original Memorandum of Agreement. 1 have also
e-mailed a copy to Eli Ibarra-Pratt as you have requested.
Respectfu ll y sub~	_/ 	/ 	/
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Mitchell A. Neuhauser
cc: Eli Ibarra-Pratt

Confldentlal - Not for Public Disclosure
Memorandum of Agreement Between
The Un ited States Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) and RAI
Services Company (RAIS)/Santa Fe Natural Tobacco Company, Inc. (Santa Fe),
(Dated: January 19, 2017)
The parties, the FDA's Center for Tobacco Products (CTP) end RAI Services Company (RAIS)/Santa Fe
Natural Tobacco Company, Inc. (Santa Fe), have been engaged In discussions to resolve the Issues raised
in CTP's Warning Letter dated August 27, 2015. Per those discussions, CTP and Santa Fe agree to the
following steps and conditions:
1. 	Senta Fe will remove the phrase "Additive Free• from all Natural American Spirit cigarette product
labels, labeling, advertising, and promotional materials.
2. 	Santa Fe will remove the term •natural" from all Natural American Spirit cigarette product labels,
labeling, advertising, and promotional materials, except as provided In Paragraph Three (3) below.
Santa Fe may, if It chooses to do so , use the statement "Tobacco Ingredients: Tobacco & water" or
"Tobacco Fiiier Ingredients: Tobacco & Water" on product labels, labeling, advertising, and
promotional materials. The use of the phrases "Tobacco Ingredients: Tobacco and Water" and
"Tobacco Flffer Ingredients: Tobacco and Water" Is not required under this Agreement, but Santa Fe
wishes to retain the option of using these statements.
If Santa Fe chooses to use the statement "Tobacco Ingredients: Tobacco & Water" or "Tobacco Filler
Ingredients: Tobacco & Water" on product labels, labeling, advertising, and promotional materials,
Santa Fe agrees to Initiate discussions with the FTC and FDA within 30 days of signing this
Agreement In order to address, and reach a mutually agreeable resolution regarding, whether, under
the Consent Decree entered in 2000 between FTC and Santa Fe regarding Santa Fe's advertising of
Natural American Spirit cigarettes, FTC would require a disclosure with use of the statements
"Tobacco Ingredients: Tobacco & Water" or "Tobacco Filler Ingredients: Tobacco & Water: CTP's
position is that no disclosure would be needed for either of the tobacco Ingredients statements In the
preceding paragraph. .However, CTP would not object to Santa Fe's use of the disclosure "Natural
American Spirit cigarettes are not safer than other cigarettes" on product packaging, labels, labeling,
advertising and promotional materials. Santa Fe agrees to work dlllgently with FTC and FDA to reach
resolution on this issue.
CTP recognizes that Santa Fe will need to coordinate with Its vendors to print and Implement new
product labeling and advertising. However, CTP expects that this process would be completed and
that changes to the labels, labeling, advertising, and promotional materials would be implemented
within seven (7) months from the date Santa Fe receives In writing the agreement reached between
FTC and FDA regarding the necessity, and, if applicable, wording, of a disclosure, and the process
for effectuating It, as a result of the discussions among Santa Fe, FTC, and FDA. Followlng the
seven (7) month de~dline , Santa Fe will not utilize the terms "additive free" or •natural" except as
allowed under Paragraph 3 of this Agreement on the labels, labeling, advertising, or promotional
materials for Natural American Spirit cigarette products. Santa Fe need not, however, remove or
recall products or product labels, labeling, advertising, or promotional materials utilizing the terms
"additive free" or ·natural" that were Introduced Into the market (e .g., through distribution to
wholesalers, dlstrlbuters. retallers, or consumers) prior to the seven (7) month deadline.
3. 	Santa Fe may retain use of the term "Natura l" In the "Natural American Splrlr brand name and
trademarks.
4. 	To the extent any premarket authorization requirements of section 905(j) and 910 of the FD&C Act
apply, CTP wlll not enforce them with respect to the changes specified in Paragraphs 1 and 2 above.
5. 	If Santa Fe seeks labeling review from FTC for the changes described In the Agreement. Santa Fe
will submit a letter to CTP's Office of Compliance and Enforcement to inform CTP of such review
once the FTC has completed its review. In addition, Santa Fe will prompUy notify CTP's Office of
Compliance and Enforcement in writing and provide exemplars of Its revised packaging, labels,

Confidential -· Not for Public Disclosure
labeling, advertising, and promotional materials that reflect the removal of "addltivo free" and
"natural" claims, and related changes, in accordance with this Agreement. Thereafter, any
subsequent changes to packaging, labels, labeling, advertising, and promotional materials shall be
communicated In conformance with Section 905(i) of the FD&C Act.
6. 	Within thirty (30) days after CTP receives exemplars of Santa Fe's revised packaging, labeling,
advertising, and promotional materials pursuant to Paragraph 5, CTP shall determine whether the
exemp lars are in compliance with the applic able requ irements of the FD&C Act and notify Santa Fe
in writing of its determination.
7. 	By accepting the terms of this Agreement, Santa Fe does not admit any liability or wrongdoing.
If Santa Fe agrees to the conditions outlined above, CTP will commit to not initiating enforcement action
against Santa Fe related to the August 27, 2015 Warning Letter during the seven (7) month timeframe set
forth in Paragraph 2 for Santa Fe to complete and implement changes to the product packaging, labels,
labeling, advertising and promotional materials. The parties may agree to extend these dates by written
agreement. CTP's Office of Compliance and Enforcement requests periodic updates as to Santa Fe's
progress towards meeting the terms of this Agreement.
Th is Agreement applies only to the specific products and claims described in this letter. It is Santa Fe's
responsibility to ensure that Its other tobacco products and all related labeling and/or advertising comply with
each applicable provision of the FD&C Act and FDA's Implementing regulations.
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MITCHELL A NEUHAUSER 	_....,7£,__o_~-·T--..·E..-,
Vice President
Assistant General Counsel-Regulatory
RAI Services Company
ANN SIM ONE
Director
Office of Compliance and Enforcement
Center for Tobacco Products
Food and Drug Administration

UNITED STATES OF AMERICA
FE DERAL TRA DE COMMISSION
In the Matter of
SANTA FE NATURAL TOBACCO COMPANY, INC., a corporation.)
FILE NO. 992 -3026
AGREEME NT CONTAINING CONSENT ORDER
The Federal Trade Comm ission has conducted an investigation of certa in acts and
practices o f Santa Fe Natural Tobacco Comp any, Inc., a corporation ("proposed
respondent"). Proposed respondent is willing to enter into an agreement containing a
consent order resolving the allegations co ntained in the attached draft complaint.
Th erefore,
IT IS HE REBY AGREED by and between Santa Fe Na tural Tobacco Company, Inc.,
by its duly authorized officer, and counsel for the Federal Trade Commission that:
I. Proposed respondent Sa nta Fe Natural Tobacco Company, Inc. is a New Mexico
corporation with its principal office or place of business at 1368 Ce rri llos Road, Santa
Fe, NM 87505-3507.
2. Proposed respondent admits a ll the jurisdictional facts set forth in the draft co mplaint.
This agreement is for settlement purposes only and does not constitute an admission by
proposed respondent that the law has been violated as alleged in the draft complaint, or
that the facts as a ll eged in the draft complaint, other than the jurisdictional facts , are true.
3. Proposed respondent waives:
a. Any fu rther procedural steps;
b. The requirement that the Commission's decision contain a statem ent of findings
of fact and conclusions of Jaw; and
c. All rights to seek judicia l review or otherwise to challenge or contest the validity
of the orde r entered pursuant to this agreement.
4. This agreement shall not become part of the public record of the proceeding unless and
unti l it is accepted by the Commission. If this agreement is accepted by the Com mission,
it, togeth er with the draft com plaint, will be placed on the public record for a period of
thirty (30) days and information about it publicly released. The Commissio n thereafter
may either w ithdraw its acceptance o f this agreement and so notify proposed res pondent,
in which event it will take such action as it may consider appropriate, or issue and serve
it s comp laint (in such form as the circumstances may require) and decision in disposition
of the proceeding.
5. This agreement contemplates that, if it is accepted by the Commi ss ion, and if su ch
acceptance is not subsequently withdrawn by the Commission pur suant to the provisions
of Section 2.34 of the Commission's Rules, the Comm ission may, without further notice
to proposed respondent, (I) issue its co mplaint corresponding in form and substance with
the attached draft compla int and its decision co ntaining the following order in disposition
of the proceeding, and (2) make in fo rm ation about it public. When so entered, the order
shall have the same force and effect and may be a ltered, modified, or set aside in the
same mann er and w ith in the same time provided by statute for other orde rs. The ord er
shall become final upon se rvice. Delivery of the complaint and decision and order to

proposed respondent's address as stated in the agreement by any means specified in
Section 4.4 of the Co mmission's Rules sha ll constitute service. Proposed res pondent
waives any right it may have to any other mann er of service. Th e comp la in t may be used
in construing the terms of the order. No agreement, understanding, representation, or
interpretation not contained in the order or in the agreement may be used to vary or
contradict the terms of the order.
6. Proposed respondent has read the draft complaint and consent order. It understands
that it may be liable fo r civil penalties in the amount provided by law and other
appropriate rel ief for each violation of the order after it becomes fina l.
ORDER
DEFINITIONS
For purposes of this orde r, the following definitions shall apply:
I. "Competent and reliable scientific evidence" shall mean tests, analyses, res earch,
studies, or other evidence based on the expertise of professionals in the relevant area, that
has been conducted and eva lu ated in an obj ective manner by persons qualified to do so,
using procedures gene rally accepted in the profession to yield accurate and reliable
results.
2. Unless otherwise specified, "respondent" sha ll mean Santa Fe Natural Tobacco
Company, Inc., a corporation, its successors and assigns and its officers, age nt s,
representa ti ves, and employees.
3. "Commerce" shall mean as defined in Section 4 of the Federal Trade Comm iss ion Act,
15 u.s.c. § 44.
4. "Advertisement" shall mean any written or verbal statement, illustration, or depiction
that is designed to effect a sale or create interest in the purchasing of any product,
including but not limited to a statement, illustration or depiction in or on a brochure,
newspaper, magazine, free standing insert, pamphlet, leaflet, circular, mai ler, book insert,
letter, coupon, catalog, poster, chart, billboard, transit advertisement, point of purchase
display, specialty or util itarian item, sponsorship material, package insert, film , slide, or
the Internet or ot her computer network or systt:m.
5. "Tobacco product" shall mean cigarettes, cigars, cigari llos, little cigars, smokeless
tobacco, cigarette tobacco, pipe tobacco, and any other product made or derived fro m
tobacco that is intended for human consumption, including any component, part, or
accessory of a tobacco product.
6. "Herbal smok in g product" shall mean c igarettes, cigars, cigarillos, little cigars and any
other product made or derived from plant material other than tobacco, that is intended for
human smoking, inc luding any component, part, or accessory of an herbal smoking
product.
7. " Clearly and prominently" shall mean:
a. With regard to advertisements for tobacco and herbal smoking products, in black
type on a solid white background, or in white type on a solid red background, or in
any other color combination that would provide an equivalent or greater degree of
print contrast as objectively dete rmined by densitometer or comparable

measurements of the type and the background color. The color of the ruled
rectang le shall be the same color as that of the type; and
b. (i) With regard to advertisements for tobacco products, centered, both horizontally
and vertically, in a ruled rectangle. The area enclosed by the rectangle shall be no
less than 40% of the size of the area enclosed by the ruled rectangle surrounding
the health warnings for tobacco cigarettes mandated by 15 U.S.C. § 1333. The
width of the rule fonning the rectangle sha ll be no less than 50% of the width of
the ru le required for the health warnings for tobacco cigarettes mandated by 15
u.s.c. § 1333.
Provided that, if, at any time after this order becomes final, 15 U .S.C. § 1333 is
amended , modified, or superseded by any other law, the area enclosed by the ruled
rectangle shall be no less than 40% of the area required for health warn in gs for
tobacco cigarettes by such amended, modified, or superseding law, and the width
of the rule forming the rectangle shall be no le ss than 50% of the width of any
surrounding rule required for health warnings for tobacco cigarettes by such
amended, modified, or superseding law; and
(ii) With regard to advertisements for herbal smoking products, centered, both
ho ri zontally and vertically, in a ruled rectangle. The area enc losed by the rectangle
shall be no less than the size of the area enclosed by the ruled rectangle
surrounding the health warnings for tobacco cigarettes mandated by 15 U.S.C. §
1333. The width of the rule forming the rectangle sha ll be no less than the width of
the ru le required for the health warnings for tobacco cigarettes mandated by 15
u.s.c. § 1333.
Provided that, if, at any time after this order becomes final, 15 U.S.C. § 1333 is
amended, modified, or superseded by any other law, the area enclosed by the ruled
rectangle shall be no less than the area required for health warnings for tobacco
cigarettes by such amended, modified, or superseding law, and the width of the
rule forming the rectangle shall be no less than the width of any surrounding rule
required for health warnings for tobacco cigarettes by such amended, modified, or
superseding law; and
c. Jn the same type style and type size as that required for health warnings for
tobacco cigarettes pursuant to 15 U.S.C. § 1333.
Provided that, if, at any time after this order becomes final, 15 U.S.C. § 1333 is
amended, modified, or superseded by any other law, the type sty le and type size of
the disclosure shall be the same as the type style and type size required for health
warnings for tobacco cigarettes by such amended, modified, or superseding law;
and
d. In a clear and prominent location but not immediately next to other written or
textual matter or any rectangular designs, elements, or similar geometric fonns,
including but not limited to any warning statement required under the Federal
Cigarette Labeling and Advertising Act, 15 U.S.C . § 1331 et seq., or the
Comprehensive Smokeless Tobacco Health Education Act, 15 U .S.C. § 440 I et
seq. In addition, the disclosure shall not be positioned in the margin of a print
advertisement. A disclosure shall be deemed "not immediately next to" other
geometric or textual matter if the distance between the disclosure and the other
matter is as great as the distance between the outside left edge of the rule of the
rectangle enclos ing the health warning required by 15 U. S. C. § 1333 and the top
left point of the letter "S" in the word "SURGEON" in that health warning; and

c. For audiov is ual or audio advertisements, includ ing but not limited to
advertisements on videotapes, cassettes, discs, or the Internet; promotional film s or
filmstrips; and promotional audiotapes or other types of sound recordings, the
disclosure shall appear on the screen at the end of the advertisement in the format
described above for a length of time and in suc h a manner that it is easily legible
and shall be announced simultaneously at the end of the adverti se ment in a manner
that is c lea rly audible.
Provided, however. that in any advertisement that does not contain a visual
component, the disclosure need n ot appear in visual format, and in any
adve1tiseme nt that does not contain an audio co mp onent, the disclosure n eed not
be announced in aud io format.
I.
IT IS ORDERE D that respondent, directly or through any corporation, subsidiary,
division, or other device, in connection with the advertising, promotion, offering for sale,
sale, or distribution of Natural American Sp irit tobacco cigarettes or a ny other tobacco
product in or affecting commerce, shall display in advertisements as specified below,
clearly and prominently, the following disclosures (including the line breaks,
punctuation, bold font and capitalization illustrated):
In cigarette advertisements:
No additives in our tobacco
does NOT mean a safer cigarette.
In advertisements for any other tobacco product:
No additives in our tobacco
does NOT mean safer.
These disclosures shall be displayed beginning no later than thirty (30) days after the
date of service of th is orde r, in any advertisement that, through the use of such phrases as
"no additives;" "no chemicals," "additive-free," "chemical-free," "chemical-additive
free," " 100% tobacco," "pure tobacco," or subs tantially similar terms, represents that a
tobacco product has no additives or chemicals.
Provided, that the above disclosures shall not be required in any cigarette advertisement
that is not required to bear a health warning pursuant to 15 U.S.C. § 1333.
Provided further, that the above disclosures sha ll not be required if respondent possesses
and relies upon competent and reliable scientific evidence demonstrating that such
cigarette or other tobacco product poses materially lower h ea lth risks than other
cigarettes or other products of the same type.
Nothing contrary to, inconsistent with, or in mitigation of any discl osure provided for in
this part shall be used in any advertisement. Provided, howeve r. that this provision shall
not prohibit respondent from truthfully representing, through the use of such phrases as
"no additives," "no chemicals." "additive-free," "chemical-free," "chemical-additive
free," " I 00% tobacco," "p ure tobacco," or substantia ll y similar terms, that a tobacco
product has no additives or chemicals, where such representation is accompanied by the
disclosure mandated by this provision.
11.

IT IS FURTHER ORDERED that respondent, directly or through any corporation,
subsidiary, division, or ot her device, in connection with the advertising, promotion,
offering for sa le, sale, or distribution of any herbal smoking product in or affecting
commerce, shall display in advertisements and on packaging as specified below, clearly
and prominently, the fo llowing disclosure (including the line breaks, punctuation and
capitalization illustrated):
In advertisements and on packaging for herbal cigarettes:
Herbal cigarettes are dangerous to your health.
They produce tar and carbon monoxide.
In advertisements and on packaging for other herbal smoking products:
Smoking this product is dangerous to your health.
It produces tar and carbon monoxide.
Th ese disclosures shall be displayed beginning no later than thirty (30) days after the
date of service of this order, in any advertisement and on any package that, through the
use of such phrases as "no tobacco," "tobacco-free," "herbal," or substantially similar
terms, represents that an herbal smoking product has no tobacco.
Prov;ded, that the above disclosures shall not be required if respondent possesses and
relies upon competent and reliable scientific evidence dem onstrating that such herbal
smoking products do not pose any material health risks.
Nothing contrary to, inconsistent with, or in mitigation of any disclosure provided for in
this part shall be used in any advertisement. Provided, however, that this provision shall
not prohibit respondent from truthfully representing, through the use of such phrases as
"no tobacco," "tobacco-free," "herbal," or substantially similar terms, that an herbal
smoking product has no tobacco, where such representation is accompanied by the
disclosure mandated by this provision.
I I I.
IT IS FURTHER ORDERED that respondent shall:
A. Provide, within forty-five (45) days after the date of service of this order, an exact
copy of the notice attached hereto as Attachment A to each retailer, distributor, or other
purchaser for resale to whom respondent has supplied Natural American Spirit tobacco
cigarettes since January I, 1998. Respondent shall send the notice by first class mail. The
mailing shall not include any other documents.
B. Di scontinue dealing with any retailer, distributor, or other purchaser for resale once
respondent has actual knowledge, or knowledge fairly implied on the basis of objective
circumstances, that such retailer, distributor, or other purchaser for resale has continued
to use or disseminate any of respondent's advertisements for any of respondent's tobacco
products that:
I. represents, through the use of such phrases as "no additives," "no chemicals,"
"additive-free," "chemical-free," "chemical-additive-free," "I 00% tobacco," "pure
tobacco," or substantially similar terms, that the tobacco products have no
additives or chemicals; and

2. does not include the disclosure specified in Part I of this order
unless, upon notification by respondent, such retailer, distributor, or other purchaser for
resale immediately ceases using or disseminating such advertisements. If, after such
notification, respondent obtains actual knowledge, or knowledge fairly implied on the
basis of objective circumstances, that such retailer, distributor, or other purchaser for
resale has not permanently ceased using or dissem inating such advertisements,
respondent must immediately and indefinitely, discontinue dealing with such retailer,
distributor, or other purchaser for resale, until such time as respondent has obtained
written assurance and verified that such retailer, distributor, or other purchaser for resale
has permanently ceased using or disseminating such advertisements.
C . For five (5) years after the date of service of this order, maintain and upon request
make available to the Federal Trade Commission for inspection and copying:
(I) copies of all notification letters sent to retailers, distributors, or other
purchasers for resale pursuant to subparagraph A of this part; and
(2) copies of all communications with retailers, distributors, or other purchasers for
resale pursuant to subparagraph B of this part.
JV.
IT IS FURTHER ORDERED that respondent Santa Fe Natural Tobacco Company, Inc.,
and its successors and assigns, shall, for five (5) years after the last date of d isse mination
of any representation covered by this order, maintain and upon request make available to
the Federal Trade Commission for inspection and copying:
A. All advertisements and packaging containing the representation;
B. All materials that were relied upon in disseminating the representation; and
C. All tests, reports, studies, surveys, demonstrations, or other evidence in their
possession or control that contradict, qualify, or call into question the
rep resentation, or the basis relied upon for the representation, including complaints
and other communications with consumers or with governmental or consumer
protection organizations.
v.
IT IS FURTHER ORDERED that respondent Santa Fe Natural Tobacco Company, Inc.,
and its successors and assigns, sha ll deliver a copy of this order, in either paper or
electronic form , to all current and future principals, officers, and directors, and to all
current and future managers, employees, agents, and representatives having
responsibi li ties w ith respect to the subject ma tter of this order. Respondent shall secure
from each such person either I) a signed and dated statement acknowledging receipt of
the o rder; or 2) a dated , e lectronic acknowledgment indicating that the person has read,
downloaded or printed the order. Respondent shall deliver this order to current personnel
w ith in thirty (30) days after the date of service of this o rd er, and to fut ure personnel
within thirty (30) days after the person assumes such position or responsibilities.
Respondent shall maintain and upon request make available to the Federal Trade
Comm ission fo r inspection and copying a co py of each signed statement acknowledging
receipt of the order or a record, in either electronic or paper form, of each electronic
acknowledgment o f receipt of the order.

VI.
IT IS FURTHER ORDERED that respondent Santa Fe Natural Tobacco Company, Inc.,
and its successors and assigns shall notify the Commission at least thirty (30) days prior
to the sale of any of its tobacco products or herbal smoking products for which the
composition or formula has been changed in such a manner as may affect compliance
obligations arising under this order, including but not lim ited to the addition o f any
additives to any variety of such products. All notices required by this Part shall be sent
by certified mail to the Associate Director, Division of Enforcement, Bureau of
Con sume r Protection, Federal Trade Comm ission, 600 Pennsylvania Avenue, N. W.,
Washington, D.C. 20580.
VII.
IT IS FURTHER ORDERED that respondent Santa Fe Natural Tobacco Company, Inc.,
and its successors and assigns shall notify the Commission at least thirty (30) days prior
to any change in the corporation that may affect compliance obligations arising under
this order, including but not limited to a dissolution of a subsidiary, parent or affiliate that
engages in any acts or practices subject to this order; the proposed filing of a bankruptcy
petition; or a change in the corporate name or address. Provided, however, that, with
respect to any proposed change in the corporation about which respondent learns less
than thirty (30) days prior to the date such action is to take place, respondent shall notify
the Commission as soon as is practicable after obtaining such knowledge. All notices
required by this Part shall be sent by certified mail to the Associate Director, Division of
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600
Pennsylvania Avenue, N.W., Washington, D.C . 20580.
VIII.
IT IS FURTHER ORDERED that res pondent Santa Fe Natural Tobacco Company, Inc.,
and its successors and assigns shall, within sixty (60) days after the date of service of this
order, and at such other times as the Federal Trade Commission may require, file with the
Commission a report, in writing, setting forth in detail the manner and form in which
they have complied with this order.
IX .
This orde r will terminate twenty (20) years from the date of its issuance, or twenty (20)
years from the most recent date that the United States or the Federal Trade Commission
files a comp laint (with or without an accompanying consent decree) in federal court
alleging any violation of the order, whichever comes later; provided, however, that the
filing o f such a complaint will not effect the duration of:
A. Any Part in this order that terminates in less than twenty (20) years;
B. This order's appl ication to any respondent that is not named as a defendant in
such complaint; and
C. This order if suc h complaint is tiled after the order has terminated pursuant to
this Part.
Provided further, that if such complaint is dismissed or a federal cou rt rules that the
respondent did not violate any provision of the order, and the dismissal or ruling is either
not appealed or upheld on appeal, then the order will terminate according to this Part as
though the comp laint had never been filed, except that the order will not terminate

between the date such complaint is filed and the later of the deadline for appealing such
dismissal or ruling and the date such dismissal or ruling is upheld on appeal.
Signed this ____ day of _______ , 2000
SANTA FE NATURAL TOBACCO COMPANY, INC.
By: ------ ---Robin Som mers
President
C. Randall Nuckolls
Long Aldridge & Norman, LLP
Attorney for Respondent
Michael Ostheimer
Shira Model!
Counsel for the Federal Trade Commission
AP PROVED :
C. Lee Peeler
Associate Director
Division of Advertising Practices
Joan Z. Bernstein
Director
Bureau of Consumer Protection
ATTACHMENT A
[To be pr inted on Santa Fe Natural Tobacco Company, Inc. letterhead]
[date]
Dear [retailer, distributor, or other purchaser for resale]:
This let ter is to inform you that Santa Fe Natural Tobacco Company, Inc. recently
reached a settlement agreement with the Federal Trade Co mm ission ("FTC") concerning
certain past advertising for Natural American Spirit cigarettes. The FTC has been
reviewing "no additive" claims for cigarettes and other tobacco products as a result of
concerns that such representations might mislead consumers to believe that tobacco
products without additives are safer than tobacco products containing additives. As part
of this rev iew, the FTC conducted a n investigation of past advertising for Natural
American Spirit cigarettes and alleged that certain of our past advertising was
misleading. Although we do not admit the FTC's allegations, we have agreed to notify
our di str ibutors, retailers and others who sell our cigarettes to consu mers that we will be
adding a new disclosure statement to certain advertisements making a "no additive"
claim and that they should discontinue the use of certain old advertising materials not
conta in ing the new disclosure lang uage.
The FTC Agreement

The FTC claimed that because we state that the tobacco used in Natural American Spirit
cigarettes contains no additives or chemicals, we made implied, unsubstantiated claims
that smoking our cigarettes is less hazardous to a smoker's health than smoking otherwise
comparable cigarettes that contain additives or chemicals. Beginning in late 1997, we
voluntari ly began placing the statement ''To our knowledge there is no research
indicating cigarettes containing additive-free tobacco are safer than cigarettes with
tobacco contain ing additives" in certain ads for Natural American Spirit tobacco
cigarettes. Since ear ly I998, we have also included th e statement "We make no
representation expressed or implied that t he se cigarettes are any less hazardous than any
other c ig arettes" on the packaging of Natural American Spirit cigarettes. We have now
agreed to revise our disclosure in certain advertisements for Natural American Spirit
tobacco cigarettes to stale the following:
No additives in our tobacco
does NOT mean a safer cigarette.
Our Notifi cation Obligations
In addition to agreeing to revise our disclosure statement, we have also agreed to request
that you discontinue using, relying on or distributing certain old Natural American Spirit
advertisements or promotional materials in your possession that do not contain the new
disclosure statement. Certain existing point of sale items may continue to be used
without the new disclosure statement while other items will need to be discontinued or
removed unless a sticker is applied containing the new disc losure statement. In the near
future, we will provide instructions for dealing with these existing items and we will be
sending you new Natural American Spirit promotional materials. If you are a distributor,
we also ask that you make this information available to your Natural American Spirit
dealers who may have existing material s so that they can take similar action. The FTC
agreement requires us to cease doing business with even our most loyal customers in the
event they continue using noncompliant materials, so please help us make this transition
in an order ly and prompt fashion.
If you have any questions, you may call us at (xxx) xxx-xxxx. We apologize for any
inconvenience this may cause you and thank you for your assistance.
Sincerely,
Robin Sommers, President
Santa Fe Natural Tobacco Company, Inc.