Tuesday, December 23, 2008

Will Obama Pass A Law That Will Help To Bolster The Profits Of The Biggest Tobacco Manufacturer?

While he was a Senator, President-Elect Barack Obama helped to co-sponsor a bill that financial pundits are declaring favorable to Altria.

Altria, whose subsidiary is Philip Morris USA, controls about half of the tobacco market in the United States. This profitable company also endorsed the aforementioned Obama-sponsored legislation. The bill, which the President-Elect is likely to sign into law once he takes office, would subject tobacco products to regulation by The Food and Drug Administration.

The question is, "Why would a tobacco giant want to implement a law that would make tobacco-makers and cigarette manufacturers subject to FDA scrutiny?"

Here's the answer: According to CNN, "The proposed legislation might as well be dubbed the Altria Earnings Protection Act. For starters, the bill prevents the FDA from ever banning cigarettes. Just as important, the wording makes it extremely unlikely that the FDA will ever approve a new cigarette product, because the new entrant would have to be deemed 'appropriate for the protection of the public health.' The bill also restores states' ability to restrict tobacco advertising. Yet another part of the measure would require the FDA to crack down on sales of counterfeit cigarettes, which have been a drain on Altria earnings for some time. All of these provisions would be beneficial to Altria, as they would help it 'lock in its already dominant market share,' says Dan Clifton, a political analyst at Strategas Research Partners."

Pretty slick, huh? The old-hat strategy of a giant corporation using government officials to annihilate their competition. All of these slick maneuverings has prompted CNN to place Altria on its list of the best stocks for 2009. With this type of support, Altria's "vice stock" will likely rise in value even during this "recession."

[SIDEBAR: If you are still a smoker, are you ready to give it up in 2009? It's resolution time for a lot of people :)]

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