Since the U.S. Food and Drug Administration (FDA) barred flavored cigarettes in 2009, numerous cities and local municipalities have taken it a step further, outlawing the sale of all flavored tobacco products.
Providence, R.I., was the first city to successfully enact such legislation back in 2012, allowing an exemption for “smoking bars”—establishments that sell tobacco products primarily meant to be consumed on the premises.
In 2015, Minneapolis took this flavor-ban trend further, proposing regulations that would allow flavored tobacco in 18-and-up retail locations, but not in traditional retailers such as c-stores. The Minneapolis City Council unanimously approved the ban, despite retailers, manufacturers and trade associations pointing out this kind of legislation creates an unfair playing field.
“We are opposed to any action that would put convenience stores at a competitive disadvantage with other channels of trade,” says Lyle Beckwith, NACS’ senior vice president of government relations. “This type of regulation impedes a convenience store from responsibly selling legal products.”
Cam Gorden, the Minneapolis City Council member who introduced the legislation, argued it wasn’t about isolating one set of retailers, telling the Star Tribune, “This is one step we can take that will help prevent serious health impacts to people throughout Minnesota.”
Once Minneapolis was successful, it created a domino effect: St. Paul, Minn., and Boston passed nearly identical regulations in late 2015.
This trend has retailers and manufacturers alike up in arms. “These flavor bans are discriminatory prohibition because only a very small number of age-restricted stores will be able to sell flavored tobacco products, even though convenience stores and grocery stores have the same high level of compliance with the law,” says Jacob McConnico, a spokesman for Reynolds American Inc., Winston-Salem, N.C. “Picking winners and losers among retail licensees is simply arbitrary and unfair.”
The Underage Dilemma
Joyce Redford, director of the North Shore/Cape Ann Tobacco Alcohol Policy Program and a supporter of another “quasi-ban” proposed in Saugus, Mass., told Wicked Local such regulations are not intended to be punitive to retailers but are necessary because flavored tobacco is “an introductory item for young people.”
Despite the many flavor bans enacted for this reason, Thomas Briant, executive director of NATO, says no legislator or advocacy group has offered scientific evidence to support that banning flavored tobacco products results in a reduction in underage tobacco consumption. “The reason that no studies have been submitted,” says Briant, “is because such studies have not been conducted and, therefore, do not exist.”
Singling out retailers who age-verify at the register vs. those who do so at the door suggests one channel has been more successful at preventing underage sales than another. That is not the case, says Miguel Martin, president of Princeton, N.J.-based Logic Technologies LLC, who points to the “long and storied history” the convenience channel has had with age verification, whether with alcohol, tobacco or e-vapor.
“I find it a bit disingenuous that people think it’s OK for a convenience store to verify for a 21-plus alcohol product but would somehow be incapable of age-verifying for an 18-plus tobacco product,” he says. Steve Rush, director of government relationship for Bloomington, Minn.-based Holiday Stationstores, points out that there are tobacco shops in Minneapolis and St. Paul that have failed compliance inspections. “Why is that if underage people are not supposed to be in the store at all?” he says.
Perhaps the biggest irony of selective flavor bans is that they allow for flavored tobacco products to be sold in areas that aren’t even subject to compliance inspections: vape shops and internet sales. Those in opposition argue the vast majority of online vapor retailers use only self-selection for age, and that most of the vape shops are not being inspected by the FDA.
Steve Williams, owner of Minneapolis-based Bobby and Steve’s Auto World, wrote an op-ed for the Star Tribune about the irony in July 2015. “Rather than allowing only a handful of stores to sell the products, why not come up with a solution that prevents underage purchasing?” he said.
Image Issues
Rush agrees retailers have historically not been part of the problem with underage tobacco access, pointing to a September 2014 press release from the Minnesota Department of Human Services that says local retailers achieved a 99% compliance rate with state and federal minimum-age laws. It’s one of many points Rush and other merchants made when testifying before the St. Paul City Council about the proposed flavor ban. “Despite the objective evidence that retailers were not marketing or selling tobacco products to youth, our attempts at reaching a compromise were rejected,” Rush says of the council’s 7-0 vote to ban flavored tobacco in non-age-verified locations.
Beyond the lack of evidence that traditional retailers are less compliant than 18-and-up shops, NATO provided sales data that showed the St. Paul ordinance would result in the loss of an estimated $50,000 in sales of flavored tobacco products per store, resulting in a $13 million annual loss for retailers citywide. “Some St. Paul elected officials do not consider this financial impact a punishment on retailers,” Briant says. “But that is exactly what it is.”
It’s not merely about the loss of flavored-product sales. The $50,000 figure does not take into account the loss in would-be gasoline and market-basket sales from purchasers of flavored tobacco, Rush says.
What’s worse: This channel-specific legislation seemingly gives an advantage to the competition. “Since these types of products are still available at age-verified stores in these cities, it is likely that consumers will choose to purchase tobacco products at these outlets,” says McConnico.
Then there’s the image issue: the notion that tobacco or vape shops are better equipped to verify a consumer’s age. Briant again says there is no data to support this claim. The FDA’s own retail compliance checks show that approximately 95% of U.S. retailers do not sell tobacco to minors.
“The bottom line is that the ordinance completely infringes on the legal sale of flavored tobacco in gas, grocery and convenience stores,” Rush says. “That was not the right answer to the problem the ordinance sought to solve.”
Targeting Retailers
The problem, Briant says, is not retailers but social sources. The Journal of School Health published a study August 2014 that showed 86% of minors obtain tobacco products from social sources such as older friends, siblings, parents, or even strangers.
If legislatures insist on bringing the fight to retailers, Williams of Bobby and Steve’s Auto World suggests targeting retailers that are not complying with the law instead of punishing those that are. In his op-ed, he encouraged legislation that would require tobacco retailers to install verification procedures that would prevent transactions without proper identification.
This kind of compromise is no longer an option for retailers such as Williams and Rush, operating in markets where flavor bans have already passed. But more city, state and local legislatures are eyeing similar channel-specific regulation.
“Just because it’s not happening in your backyard—don’t think that it can’t,” says Martin of Logic. “The playbook here is to take it from one municipality to another. If somewhere [such as] Boston is successful in banning the product, others will take that exact same language or legislation around the country.”
Unfortunately for retailers, the first several dominoes have fallen in the form of Minneapolis, St. Paul and Boston. Only time will tell how many more will follow suit.
Indicators
>300 —Retail locations selling flavored tobacco in Minneapolis prior to Jan. 1, 2016
<12 —Minneapolis tobacco shops allowed to sell flavored tobacco after Jan. 1, 2016
99% —Age-verification compliance rate for Minnesota retailers
$50,000 —Estimated annual loss in flavored-tobacco sales per store in St. Paul, Minn.
$13 million —Estimated annual loss in flavored-tobacco sales for all St. Paul, Minn., retailers
Sources: Minneapolis Star Tribune; Minnesota Department of Human Services, September 2014; NATO
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