MINNEAPOLIS -- In June, two Minneapolis City Council members introduced an ordinance that would ban the sale of menthol cigarettes and menthol, mint and wintergreen tobacco products in all retail stores except age-restricted tobacco shops. The reasons why this ordinance should not be enacted are numerous and would apply to virtually any city that considers this kind of restriction.
While one of the primary goals of the proposed ordinance is to prevent youth from using tobacco products, Minneapolis retailers have compiled an almost perfect record in preventing the sale of tobacco to minors. From June 2016 through May 2017, the U.S. Food and Drug Administration’s retail-compliance checks conducted by the Minnesota Department of Human Services show that 398 out of 405 stores checked did not sell tobacco to an underage decoy, which is a 98.3% success rate. In short, retailers are a part of the solution to preventing underage tobacco use, not part of the problem.
According to actual industry sales data for 2016, the sales of menthol tobacco products sold by the 325 licensed stores in Minneapolis totaled $73 million dollars. This equates to an average of $226,000 in menthol tobacco-product sales for an average store.
This means that the potential sales loss at an average convenience store is so large that there is a real risk that these retail stores will not be able to remain profitable. It is just not economically feasible from a business-model perspective to remain in business while incurring six-figure sales declines.
However, the sales losses will be even greater because customers will change their purchasing habits and drive to a neighboring suburb or city to buy not only their preferred menthol tobacco products, but also their gasoline, beverages and food items.
To quantify this loss of sales for the tobacco category and the food and beverage products, an economic study is being conducted to estimate the financial impact of the proposed menthol-tobacco ban ordinance on menthol-products sales, retailers, and employee jobs.
Currently, the 325 licensed retail stores employ approximately 3,200 staff people, many of whose jobs may be in jeopardy if the ordinance is enacted. That is the case because many convenience stores and corner markets in Minneapolis rely on menthol sales for 40%, 50%, 60% or more in gross store sales. A ban on the sale of menthol products would eliminate such a large percentage of business that retailers would find it very difficult to remain open. The first thing that would happen is a wave of job layoffs.
One final concern about the ordinance is that it would create the conditions for an underground market in menthol tobacco products. Since the ordinance would ban the purchase but not the possession or use of menthol products, criminals would be able to take advantage of the situation and sell menthol products from their car trunks or the back of a van without any regard to the age of the purchaser. This, in turn, would make underage youth access to tobacco much easier because these illegal sellers will not be concerned with asking to check identification to verify legal age status.
Based on all of these reasons, retailers have rallied around the message “Enough Is Enough, Minneapolis!”
The Health, Environment and Community Engagement Committee held a public hearing on the ordinance this week and a vote by the committee is expected on Aug. 2.