Dosal

It doesn't hurt that Dosal, which is housed in a former boat factory, has deep roots here.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Bob Butterworth , the former state attorney general who brought the case that led to the Florida tobacco settlement, said he supports the proposed legislation because Dosal's cigarettes are "causing a health problem for which the state of Florida has to pick up the cost."

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

The industry's largest players dominate the market in most states, making Dosal, whose Florida market share was 18% in the second half of last year, an unusual case.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Dosal, they say, wasn't involved in the alleged industry practices, such as manipulating the nicotine content of cigarettes, that triggered the wave of lawsuits against major tobacco makers in the 1990s.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Jason Henry for The Wall Street Journal CEO Yolanda Nader said a proposed fee on each pack would eventually push Dosal out of business.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Dosal has survived similar campaigns before, but this time its larger rivals are turning up the heat at a time when Florida, which faces a $3.6 billion budget deficit, is under pressure to find new funds.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Dosal recently created a website, SaveDosal.com, where it displays photographs and vignettes about some of its 150 employees, including a machine operator who sends part of his income each month to his mother in the Dominican Republic.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Cigarette prices in Florida range from about $4 a pack for Dosal and other bargain brands to about $6 a pack for Philip Morris's Marlboros.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

As a result, Dosal and other small producers aren't required to pay settlement-related fees to Florida, which pursued its own litigation, rather than joining the so-called 1998 master settlement the major tobacco companies reached with 46 other states.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011

Exempting Dosal and about 30 other small players from the settlement fees has tilted the playing field, giving them a cost advantage of about 40 to 50 cents a pack, according to Altria and Reynolds.

Florida Cigarette Maker Battles Proposed State Fees David Kesmodel 2011