BIG TOBACCO MAY SUBMIT TO CONTROLS : INDUSTRY FACES STUNNING CHANGES.

Byline: Anthony Flint The Boston Globe

The tobacco industry is so eager to strike a deal with opponents that it has already agreed to a stunning array of demands, including letting the government regulate nicotine and agreeing to put cigarettes behind counters with no advertising or logos anywhere in stores, say people familiar with settlement discussions set to resume today in Chicago.

The concessions, much more extensive than have been reported thus far, would transform the way cigarettes are marketed and sold in this country. Stores would be stripped of all indications that they sell cigarettes - from such things as brand-specific ``open'' signs to clocks, racks and other types of promotional materials.

People familiar with the discussions say the tobacco companies also have agreed to put much larger, starkly worded warning labels on the front of cigarette packages; to disclose all ingredients and additives; to modify the system for measuring tar and nicotine; and to submit to present and future regulation by the Food and Drug Administration - which would be renamed the Food, Drug and Tobacco Administration.

But important issues still need to be resolved. Money - how much will eventually be offered and how it will be distributed - remains a critical sticking point. The companies reportedly have offered to pay out up to $300 billion over a 25-year period. And there are legal complexities on the issue of immunity from future lawsuits.

Secret talks

The chief executives of the two top cigarette makers, Philip Morris and R.J. Reynolds, began holding secret talks about three weeks ago with plaintiffs' attorneys and state attorneys general who are suing the industry to recoup the costs of medical treatment for people with smoking-related illnesses.

``They're agreeing to completely change the way they do business,'' said one official involved in the talks. ``They're not just floating the idea; they've said they'd do it. That's their offer, right at the start.''

Fragments of the industry's proposals began to emerge last week - the cash payout, a ban on billboards and the use of models and cartoon figures in advertising, and an agreement to turn over research on the development of a safer cigarette.

But according to an account pieced together from participants, the industry's concessions on sales, marketing and regulation are much broader and more comprehensive than had been demanded by the attorneys general.

Public health advocates have long called for cigarettes to become more ``invisible'' - that is, not to be advertised or available for people to grab off a store shelf. The belief is that the number of new smokers will almost certainly decline and smoking rates will go down.

Future sales

While the proposal to limit cigarette marketing and promotion is likely to result in sharp declines in sales, many analysts say it makes financial sense for the tobacco companies.

A settlement would allow the companies to stay in business in the United States and would protect them from future lawsuits. Robust international sales would help offset the dip in domestic business in the years to come, the analysts said.

Massachusetts Attorney General Scott Harshbarger said the tobacco companies' offer is worth a serious look - not least because a change in the way cigarettes are bought and sold could ultimately save lives.

``The potential benefits to children and to the public health are historic, and they should be,'' Harshbarger said last week. ``The tobacco industry has a lot of wrongs to right.''

However, he added, ``I am very skeptical, after decades of lies and deception, that they can be trusted to pay the appropriate price and become responsible corporate citizens.''

Public health advocates would like to see even more concessions. Some would like to see cigarettes placed in plain-paper packaging as well as being kept out of sight in stores. Others say some kind of resolution on smoke-free buildings should be a part of any settlement. But taken as a whole, the basic proposal by the companies struck many participants as impressive, because it represents such a massive turnaround from the tobacco industry's traditional don't-give-an-inch posture.

Companies' proposal

The tobacco companies' proposal is said to include:

Requiring retail outlets to obtain a special license to sell tobacco products.

Elimination of vending machines and putting tobacco products out of sight in stores. ``It would all be under lock and key,'' said one official.

Warning labels based on the Canadian model, which cover one-third of the top of cigarette packs and say that smoking kills; full ingredient disclosure; and a new measuring system for tar and nicotine that more accurately reflects what smokers actually inhale.

No pre-emption of rights of state or local governments to set their own tobacco-control policies.

No billboards and no models or cartoon characters in ads, and black-and-white print advertising - and that only in publications read by adults.

Elimination of clothing and accessory lines such as Marlboro Gear, product-placement agreements in movies and television, and endorsements in sports such as car racing.

An open-ended agreement to be regulated by the FDA.