§  4-75-701. Title

    This subchapter shall be known and may be cited as the "Unfair Cigarette Sales Act". 

 HISTORY: Acts 1951, No. 101, §  1; A.S.A. 1947, §  70-601. 

§  4-75-702. Definitions

    As used in this subchapter, unless the context otherwise requires:

   (1) "Basic cost of cigarettes" means whichever of the two (2) following amounts is lower, namely, the gross invoice cost of cigarettes to the wholesaler or retailer, as the case may be, or the lowest gross replacement cost of cigarettes to the wholesaler or retailer, as the case may be, within thirty (30) days prior to the date of sale, in the quantity last purchased, whether within or before the thirty-day period, plus the full face value of any stamps or any tax which may be required by any cigarette tax act of this state or political subdivision thereof, now in effect or hereafter enacted, if not already included in the invoice cost of cigarettes to the wholesaler or retailer, as the case may be;

   (2) "Buying pool" means and includes any combination, corporation, association, affiliation, or group of retail dealers operating jointly in the purchase, sale, exchange, or barter of cigarettes, the profits of which accrue directly or indirectly to the retail dealers;

   (3) "Cigarettes" means and includes any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether or not the tobacco is flavored, adulterated, or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material, except tobacco;

   (4) (A) "Cost to the retailer" means the basic cost of the cigarettes involved to the retailer plus the cost of doing business by the retailer as evidenced by the standards and methods of accounting regularly employed by him or her and must include, without limitation, labor including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance, and advertising.

      (B) In the absence of the filing with the Arkansas Tobacco Control Board of proof satisfactory to the board of a lesser or higher cost of doing business by the retailer making the sale, the cost of doing business by the retailer shall be presumed to be seven and one-half percent (7 1/2%) of the basic cost of cigarettes to the retailer.

      (C) In the case of any retail dealer who in connection with the retail dealer's purchase of any cigarettes shall receive not only the discounts ordinarily allowed upon purchases by a retail dealer but also in whole or in part the discounts ordinarily allowed upon purchases by a wholesale dealer, the cost of doing business by the retail dealer with respect to the said cigarettes shall be, in the absence of proof of a lesser or higher cost of doing business by the retail dealer, the sum of the cost of doing business by the retail dealer and, to the extent that he or she shall have received the full discounts ordinarily allowed to a wholesale dealer, the cost of doing business by a wholesale dealer as defined in subdivision (5)(B) of this section.

   (5) (A) "Cost to wholesaler" means the basic cost of the cigarettes involved to the wholesaler plus the cost of doing business by the wholesaler as evidenced by the standards and methods of accounting regularly employed by him or her and must include, without limitation, labor costs, including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance, and advertising.

      (B) In the absence of the filing with the Arkansas Tobacco Control Board of proof satisfactory to the Board, of a lesser or higher cost of doing business by the wholesale dealer making the sale, the cost of doing business by the wholesale dealer shall be presumed to be four percent (4%) of the basic cost of the cigarettes to the wholesale dealer;

   (6) "Director" means the Director of the Arkansas Tobacco Control Board;

   (7) "Person" means and includes any individual, firm, association, company, partnership, corporation, joint-stock company, club, agency, syndicate, the State of Arkansas, county, municipal corporation, or other political subdivision of this state, receiver, trustee, fiduciary, or trade association;

   (8) "Retailer" means and includes any person who is engaged in this state in the business of selling cigarettes at retail and includes any group of persons, cooperative organizations, buying pools, and any other person or group of retailers purchasing cigarettes on a cooperative basis from licensed distributors or wholesalers. Any person placing a cigarette vending machine at, on, or in any premises shall be deemed to be a retailer for each such vending machine;

   (9) "Sale" or "sell" means any transfer for a consideration, exchange, barter, gift, offer for sale, advertising for sale, soliciting an order for cigarettes, and distribution in any manner or by any means whatsoever;

   (10) "Sell at retail", "sale at retail", or "retail sales" means and includes any sale for consumption or use made in the ordinary course of trade or usual conduct of the seller's business;

   (11) "Sell at wholesale", "sale at wholesale", and "wholesale sales" mean and include any sale made in the ordinary course of trade or usual conduct of the wholesaler's business to a retailer for the purpose of resale; and

   (12) (A) "Wholesaler" means and includes:

      (A) Any person other than a buying pool as defined in subdivision (2) of this section, wherever resident or located, who brings or causes to be brought into this state unstamped cigarettes purchased directly from the manufacturer thereof and who maintains an established place of business where substantially all of the business is the sale of cigarettes and related merchandise at wholesale to cigarette licensees and where at all times a substantial stock of cigarettes and related merchandise is available for resale, if seventy-five percent (75%) thereof are sold to retailers or other wholesalers not connected with the wholesaler by reason of any business connection or otherwise; and

      (B) Any person retailing cigarettes to consumers, if at least seventy-five percent (75%) of his or her purchases are made directly from the manufacturers thereof; and

      (C) Any person in this state other than a buying pool, as defined in subdivision (2) of this section, who purchases cigarettes from any other person who purchases from a manufacturer, at least seventy-five percent (75%) of which are for purposes of resale to retailers in this state not connected with the wholesaler by reason of any business connection or otherwise and who maintains an established place of business where cigarettes and related merchandise are sold at wholesale to persons licensed under this subchapter, and where at all times a substantial stock of cigarettes and related merchandise is available to all retailers for resale; and

      (D) Any person in this state who acquires cigarettes solely for the purpose of resale in cigarette vending machines provided the person operates thirty (30) or more machines.

(13) “Gross Invoice Cost” means the manufacturer’s or wholesaler’s price for the product sold as listed on the invoice to the wholesaler or retailer, as the case may be, before any deduction for allowances, whether manufacturer promotional allowances or otherwise, or for discounts of any kind; and

(14) “Manufacturer Promotional Allowance” means any payment or compensation given by a manufacturer of cigarettes to wholesalers or to retailers to promote the sale of cigarettes, and which the manufacturer requires the wholesaler to pass on to the retailer and the retailer to pass on to the retailer’s customer.

HISTORY: Acts 1951, No. 101, §  2; A.S.A. 1947, §  70-602; 1999, No. 1237, §  1; 2003, No. 627 §§ 1-4. 

§  4-75-703. Sales excepted from subchapter

    The provisions of this subchapter shall not apply to a sale at wholesale or a sale at retail made:

   (1) In an isolated transaction and not in the usual course of business;

   (2) Where cigarettes are advertised, offered for sale, or sold in a bona fide clearance sale for the purpose of discontinuing trade in such cigarettes, and the advertising, offer to sell, or sale shall state the reason therefor and the quantity of such cigarettes advertised, offered for sale, or to be sold;

   (3) Where cigarettes are advertised, offered for sale, or sold as imperfect or damaged, and the advertising, offer to sell, or sale shall state the reason therefore and the quantity of the cigarettes advertised, offered for sale, or to be sold;

   (4) Where cigarettes are sold upon the final liquidation of a business; or

   (5) Where cigarettes are advertised, offered for sale, or sold by any fiduciary or other officer acting under the order or direction of any court. 

HISTORY: Acts 1951, No. 101, §  6; A.S.A. 1947, §  70-606. 

§  4-75-704. Transactions permitted to meet lawful competition

    (a) (1) Any wholesaler may advertise, offer to sell, or sell cigarettes at a price made in good faith to meet the price of a competitor who is rendering the same type of service and is selling the same article at cost to the competing wholesaler as defined by this subchapter.

   (2) Any retailer may advertise, offer to sell, or sell cigarettes at a price made in good faith to meet the price of a competitor who is selling the same article at cost to the competing retailer as defined in this subchapter.

(b) The price of cigarettes advertised, offered for sale, or sold under the exceptions specified in §  4-75-703 shall not be considered the price of a competitor and shall not be used as a basis for establishing prices below cost, nor shall the price established at a bankrupt sale be considered the price of a competitor within the purview of this section.

(c) In the absence of proof of the actual cost to the competing wholesaler or to the competing retailer, as the case may be, the cost may be presumed to be the lowest cost to wholesalers or the lowest cost to retailers, as the case may be, within the same trading area as determined by a cost survey made pursuant to §  4-75-711(b). 

 HISTORY: Acts 1951, No. 101, §  7; A.S.A. 1947, §  70-607. 

§  4-75-705. Contracts in violation of subchapter void

    Any contract, express or implied, made by any person in violation of any of the provisions of this subchapter is illegal and void and no recovery shall be had thereon. 

 HISTORY: Acts 1951, No. 101, §  8; A.S.A. 1947, §  70-608. 

§  4-75-706. Director of the Arkansas Tobacco Control Board -- Powers and duties

    (a) (1) The Director of the Arkansas Tobacco Control Board shall prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this subchapter.

   (2) (A) The director is empowered to and may from time to time undertake and make or cause to be made one (1) or more cost surveys for the state or such trading area as he or she shall define, and when the cost survey shall have been made by or approved by the director, it shall be permissible to use the cost survey as provided in §  4-75-711(b).

      (B) The director is also empowered to investigate price fixing.

   (3) The director may revoke or suspend the license issued under the provisions of this subchapter of any person who refuses or neglects to comply with any provisions of this subchapter or any rule or regulation of the director prescribed under this subchapter.

(b) Whenever any person fails to comply with any provision of this subchapter or any rule or regulation of the director promulgated under this subchapter, the director, upon a hearing, after giving the person ten (10) days' notice in writing specifying the time and place of the hearing and requiring the person to show cause why his or her license should not be revoked, may revoke or suspend the license held by the person.

(c) Any ruling, order, or decision of the director shall be subject to review, as provided by law, in any court of competent jurisdiction in the county in which the person affected resides. 

 HISTORY: Acts 1951, No. 101, §  12; A.S.A. 1947, §  70-612; 1999, No. 1237, §  2. 

§  4-75-707. License requirement

    (a) No person shall engage in or conduct the business of purchasing for resale or selling cigarettes without having first obtained the appropriate license for that purpose.

(b) All such licenses shall be issued by the Director of the Arkansas Tobacco Control Board, or his or her designated agent, who shall make rules and regulations respecting applications therefor and issuance thereof.

(c) A wholesaler or retailer who sells or intends to sell cigarettes at one (1) or more places of business shall be required to obtain a separate license for each place of business.

(d) Any person licensed only as a wholesaler shall not operate as a retailer unless the appropriate license therefor is first secured, and any person licensed only as a retailer shall not operate as a wholesaler unless the appropriate license therefor is first secured. 

 HISTORY: Acts 1951, No. 101, §  13; A.S.A. 1947, §  70-613; 1999, No. 1237, §  3. 

§  4-75-708. Sales at less than cost, rebates, concessions, etc. -- Penalty

    (a) It shall be unlawful for any wholesaler, retailer or salesperson with intent to injure competitors or destroy or substantially lessen competition, to advertise, offer to sell, or sell, at retail or wholesale, cigarettes at less than cost to the wholesaler or retailer, as the case may be.

(b) It shall be unlawful for any wholesaler or retailer, with intent to injure competitors or destroy or substantially lessen competition, to offer a rebate in price, to give a rebate in price, to offer a concession of any kind, or to give a concession of any kind or nature whatsoever in connection with the sale of cigarettes.

(c) (1) It shall be unlawful for any retail dealer to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than cost to the wholesaler.

   (2) It shall be unlawful for any retail dealer to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes.

(d) Any wholesaler or retailer who violates the provisions of this section shall be guilty of a misdemeanor and be punishable by a fine of not more than five hundred dollars ($ 500).

(e) Evidence of advertisement, offering to sell, or sale of cigarettes by any wholesaler or retailer at less than cost to him or her, or evidence of any offer of a rebate in price or the giving of a rebate in price or an offer of a concession or the giving of a concession of any kind or nature whatsoever in connection with the sale of cigarettes, or the inducing or attempt to induce or the procuring or the attempt to procure the purchase of cigarettes at a price less than cost to the wholesaler or the retailer shall be prima facie evidence of intent to injure competitors and destroy or substantially lessen competition. 

 HISTORY: Acts 1951, No. 101, §  3; A.S.A. 1947, §  70-603. 

§  4-75-709. Combination sales

    (a) In all advertisements, offers for sale, or sales involving two (2) or more items, at least one (1) of which items is cigarettes, at a combined price, and in all advertisements, offers for sale, or sales involving the giving of any gift or concession of any kind, whether coupons or otherwise, the wholesaler's or retailer's combined selling price shall not be below the cost to the wholesaler or the cost to the retailer, respectively, of the total of all articles, products, commodities, gifts, and concessions included in the transactions; but if any such articles, products, commodities, gifts, or concessions shall not be cigarettes, the basic cost thereof shall be determined in the manner provided in §  4-75-702(1). 

   (b) The redemption by a retailer of coupons supplied to consumers by manufacturers and redeemable from the retailer by the manufacturers is not a violation of this subchapter, if the sum of the coupon and other consideration paid by the consumer is not below the cost to the retailer.

    (c) Any manufacturer promotional allowance provided to a wholesaler or retailer may be passed on to the purchaser by the wholesaler or retailer without violating this subchapter, if the sum of the manufacturer promotional allowance and other consideration paid by the purchaser is not below the cost to the wholesaler or retailer, as the case may be.

 HISTORY: Acts 1951, No. 101, §  4; A.S.A. 1947, §  70-604. 2003, No. 627 § 5; 2003, No. 1808 § 1.    

§  4-75-710. Sales by a wholesaler to a wholesaler

    When one wholesaler sells cigarettes to any other wholesaler, the former shall not be required to include in his or her selling price to the latter the cost to the wholesaler, as provided by §  4-75-702, but the latter wholesaler, upon resale to a retailer, shall be subject to the provisions of that section. 

 HISTORY: Acts 1951, No. 101, §  5; A.S.A. 1947, §  70-605. 

§  4-75-711. Determination of cost generally -- Cost surveys

    (a) In determining cost to the wholesaler and cost to the retailer, the court shall receive, and consider as bearing on the bona fides of the cost, evidence tending to show that any person complained against under any of the provisions of this subchapter purchased the cigarettes involved in the complaint before the court at a fictitious price or upon terms or in such manner or under such invoices as to conceal the true cost, discounts, or terms of purchase, and shall also receive and consider as bearing on the bona fides of the costs, evidence of the normal, customary, and prevailing terms and discounts in connection with other sales of a similar nature in the trade area or state.

(b) Where a cost survey pursuant to recognized statistical and cost accounting practices has been made for the trading area in which a violation of this subchapter is committed or charged to determine and establish on the basis of actual existing conditions the lowest cost to wholesalers or the lowest cost to retailers within the area, the cost survey shall be deemed competent evidence in any action or proceeding under this subchapter as tending to prove actual cost to the wholesaler or actual cost to the retailer complained against, but any party against whom any such cost survey may be introduced in evidence shall have the right to offer evidence tending to prove any inaccuracy of the cost survey or any state of facts which would impair its probative value. 

 HISTORY: Acts 1951, No. 101, §  9; A.S.A. 1947, §  70-609. 

§  4-75-712. Determination of cost -- Sales outside ordinary channels of business

    In establishing the basic cost of cigarettes to a wholesaler or a retailer, it shall not be permissible to use the invoice cost or the actual cost of any cigarettes purchased at a forced, bankrupt, or closeout sale, or other sale outside of the ordinary channels of trade. 

 HISTORY: Acts 1951, No. 101, §  10; A.S.A. 1947, §  70-610. 

§  4-75-713. Remedies

    (a) The Director of the Arkansas Tobacco Control Board or any person injured by any violation or who would suffer injury from any threatened violation of this subchapter may maintain an action in any court of equitable jurisdiction to prevent, restrain, or enjoin the violation or threatened violation.

(b) (1) If, in such action, a violation or threatened violation of this subchapter is established, the court shall enjoin and restrain, or otherwise prohibit, the violation or threatened violation, and, in addition thereto, the court shall assess in favor of the plaintiff and against the defendant the costs of suit including reasonable attorney's fees.

   (2) In the action it is not necessary that actual damages to the plaintiff be alleged or proved, but, where alleged or proved, the plaintiff in the action, in addition to the injunctive relief and costs of suit, including reasonable attorney's fees, shall be entitled to recover from the defendant the actual damages sustained by him or her.

(c) In the event that no injunctive relief is sought or required, any person injured by a violation of this subchapter may maintain an action for damages and costs of suit in any court of general jurisdiction. 

HISTORY: Acts 1951, No. 101, §  11; A.S.A. 1947, §  70-611; 1999, No. 1237, §  4. 

§  4-75-714.  Enforcement Agents -- Selection -- Qualifications -- Authority

    The Director of the Arkansas Tobacco Control Board shall designate the personnel assigned as agents of the Arkansas Tobacco Control Board, who, upon meeting the qualifications established by the Arkansas Commission on Law Enforcement Standards and Training, shall have the powers of specialized law enforcement officers for the purpose of conducting investigations pertaining to violations of tobacco laws in this state. 

 HISTORY: Acts 2001, No. 1699, §  1.