LAS VEGAS — The tobacco category has experienced several dramatic shifts in recent months, with the minimum age to purchase tobacco products rising from 18 to 21 nationally and the federal government temporarily pulling flavored vaping cartridges from the market. The result is retailer confusion and concern over the future of the cornerstone category, according to two educational speakers at the recent Tobacco Plus Expo (TPE) gathering in Las Vegas.
Held Jan. 29-31 at the Las Vegas Convention Center, the TPE event and trade show featured numerous educational sessions as well as an expansive exhibitor show floor.
During an education session, Thomas Briant, executive director of Lakeville, Minn.-based tobacco retailing association NATO, outlined several of the key changes, including requirements that the federal government will expect from convenience-store operators in the coming weeks.
“Federal law supersedes state law,” Briant said, pointing out that some states, for instance, may have buying-age exemptions for military personnel. The new federal minimum means those exemptions no longer apply, he said. “So switch as soon as possible, even if you have to go back to manually carding while you to wait to upgrade your [point-of-sale registers].”
The FDA realizes that retailers will require a “ramp-up” time period and for an undisclosed period of time will be using only undercover operatives who are 18 and under to monitor stores. In the meantime, retailers need to educate employees and customers, update their POS systems and order new signage, Briant said.
In terms of the FDA’s new Jan. 2 final guidance on pulling flavored-vape cartridges from shelves, Briant said those products had to be taken off the market as of Feb. 6. The agency understands, however, that retailers need time to get product back to manufacturers and distributors, but by that February date, all product was to be packed away and not visible to customers. People must not presume that the products are for sale.
The rule does not apply to disposable e-cigarettes, e-liquids or tobacco- and menthol-flavored cartridges, Briant said.
Virtually all vaping products will have to undergo the FDA’s new-product review process, through which manufacturers must submit premarket tobacco applications (PMTAs) by May 12, 2020, he said. Manufacturers that do submit PMTAs can leave their products on the market while the FDA reviews their submissions.
In terms of tobacco statistics, Don Burke, senior vice president of Pittsburgh-based research firm Management Science Associates, predicted that cigarette volume would experience a 4.5%-5.5% volume decline in 2020, depending on the major tobacco manufacturers' strategies around price increases. While other tobacco-tracking firms such as New York-based Nielsen have predicted a volume drop of up to 6% for 2020, Burke said, “After several years of decline, we think this will be a moderating year.”
Regarding flavor bans, Burke said MSA has tracked the effects of such bans on cities such as San Francisco and Minneapolis, which have enacted either complete flavor bans or heavy restrictions on tobacco, including menthol products. While retailers within the effected zones experience 100% declines in restricted products, they also experience significant declines in other tobacco segments. At the same time, retailers in surrounding areas unaffected by the new restrictions experience increases in essentially all segments of the tobacco category.
“Retailers were affected up to 50 miles away,” Burke said. “So there will be an impact and you may need to adjust.”