State Reaches $39.3M Settlement With Defunct Keysville Tobacco Company

Twenty-three years after the landmark Tobacco Master Settlement Agreement was reached, defunct Keysville tobacco company S&M Brands Inc. has settled with Virginia for nearly $40 million, the attorney general’s office announced Wednesday.

S&M Brands, the makers of Bailey cigarettes and other products, closed in 2019. It was started in 1995 by father and son Mac and Steven Bailey, part of a longtime family business growing and brokering tobacco in Charlotte County dating back to 1860. In November 1998, the four largest U.S. tobacco product manufacturers — Virginia’s Philip Morris Inc., R.J. Reynolds, Brown & Williamson and Lorillard — entered into the master settlement agreement with 46 states, the District of Columbia, Puerto Rico and four U.S. territories.

Under the agreement, the states settled their Medicaid lawsuits against tobacco manufacturers in exchange for the companies stopping certain marketing practices and paying annual compensation to the states for medical costs stemming from smoking-related illnesses. In subsequent years, other tobacco companies entered the agreement, but S&M Brands did not do so, leading to this year’s settlement.


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