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Does A Brand Name Really Make A Difference?

Does A Brand Name Really Make A Difference?

By Victor Ochieng

Altria Group, the maker of Black & Mild brand, has gone to court seeking an order to stop the government from demanding that it changes its name. The lawsuit comes after the U.S. Food & Drug Administration expanded its oversight role on tobacco products, introducing a rule that bans the use of “mild” by companies to describe cigars.

In Altria’s Thursday lawsuit, the company argues that the new rules released by the FDA are in violation of the First Amendment that protects brands and trademarks, the Wall Street Journal reported.

According to FDA’s new regulations, companies aren’t allowed to sell “modified-risk products” and marketing them as “Mild,” “Light,” or “Low” without first obtaining approval from the agency.

On its end, Altria argues that it uses “mild” in the name of its cigars in description of “taste and body” and not health, safety or risk as the FDA is claiming.

Moreover, Altria has also challenged FDA’s newly introduced oversight scope saying it’s in violation of the Fifth Amendment that protects private property, underlining that by taking private property for public use, the private owner ought to be compensated accordingly.

To emphasize how costly it was to secure the brand, Altria revealed that it paid a whopping $2.9 billion in 2007 to purchase John Middleton Co.s cigar and pipe business, which includes the Black & Mild brand. The company has further highlighted the fact that the brand name has been in use for over 40 years.

Altria is a major U.S. company that controls about half of the U.S. tobacco market. Last year, for example, the company sold 1.3 billion Black & Mild cigars.

Efforts by the WSJ to get the FDA to comment on the issue went futile as the agency declined to comment or release any statement on the same.

The FDA introduced the new rules as a way to control the sale of products perceived to have lower or lighter impact on health, without warning consumers or seeking the agency’s approval. The agency says that by using such terms as “Low,” “Light” and “Mild,” the consumer gets the impression that the said products are safer than others that don’t use such descriptions or names.

Altria’s lawsuit is seeking nothing less than declaratory and injunctive relief for the company as the issue is still being looked into for final ruling.

Source

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