European Parliament bans flavorings in tobacco products, a move likely to hurt U.S. growers

A Tuesday decision by the European Parliament could have major implications on the U.S. tobacco business. The multinational legislature approved new tobacco rules that include a ban on menthol and other flavorings, Juergen Baetz reports for The Associated Press. While the ban still needs to be compromised with the 28 European Union governments before it becomes law, diplomats said they expect a deal to be completed by the end of the year, and the law would go into affect in 2014. (Lexington Herald-Leader photo by Charles Bertram: State Rep. Jonathan Shell, R-Lancaster, has 190 acres of burley tobacco)

The ban on flavorings is expected to have the most effect on burley tobacco, a milder variety than most. In 2011, burley growers in the U.S. shipped more than $110 million worth of tobacco to Europe, and Kentucky, which ranks first in U.S. burley production, ships 43 percent of its crop to Europe, Rob Hotakainen reports for McClatchy Newspapers. Even before the parliament made its decision, all the senators from Kentucky and North Carolina were threatening the European Union with a trade complaint. They told EU officials in May that "they had 'serious concerns' about the new rules and their effect on trans-Atlantic trade relations, and have sent signals that adopting the new rules could result in tougher sledding on Capitol Hill for any new trade pact between the U.S. and the EU," AP reports.

Last year the U.S. grew 202 million pounds of burley, with 148 million pounds grown in Kentucky, Tim Thornberry reports for KyForward, an online news outlet. Will Snell, an agricultural economist at the University of Kentucky, told Thornberry that all tobacco raised in the state last year sold for more than $400 million, the first time the state has reached that level since Congress repealed the federal program of quotas and price supports in 2004. (Read more)

North Carolina totals about "$400 million in tobacco exports to Europe, selling mostly flue-cured tobacco," Gurnal Scott reports for North Carolina Public Radio. Blake Brown, North Carolina State University extension economist, told Scot the new rules "would have a fairly substantial impact on cigarette consumption in the European Union. It would cause it to decline. And if you cause cigarette consumption to go down, then it's going to have a big impact on U.S. tobacco farmers because about 34 percent -- in terms of value -- of U.S. tobacco is exported to Europe right now." (Read more)