Case Study: The Tobacco Deal

Case Study: The Tobacco Deal

Issues


Considering that the tobacco industry is a major contributor to the U.S. economy, what may be causal effect of such severe legislation and punishment inflicted on the Tobacco industry?
If the tobacco industries were eventually forced to close their respective doors due to excessive punitive damages awarded or if they were forced to file for bankruptcy due to costs associated to civil lawsuits, what would happen to the economy? It added over $55 billion annually to the gross domestic product. Taxes collected from the sale of cigarettes as well as other tobacco products in the U.S. alone totaled $13.1 billion in 1996. Taxes have steadily risen since then. The industry also plays a big part as a major employer in some states. The industry spent $6.2 billion a year in advertising. I’m sure this has decreased today as advertisement of tobacco products has been banned from TV and billboards. However, the decrease could not be that signi...