Walgreens Feels Tobacco Heat

Shareholder group files request for drug chain to review its practice of selling tobacco

NEW YORK -- A shareholder group within Walgreens is striking a match under the major drug-store chain, filing a formal request for it to review its practice of selling tobacco products.

This week, the New York-based Interfaith Center on Corporate Responsibility, which also is a Walgreens shareholder, announced the filing of a proposal requesting that the Deerfield, Ill.-based drug chain’s board of directors review the risks of selling tobacco. In a separate resolution, the group requested the disclosure of lobbying expenditures.

In a statement, the proponents of the resolution argued that “the sale of tobacco products, which are known to carry serious health risks, in Walgreens pharmacies exposes the company to significant and long-term risks that may impact shareholder returns.”

Chief among these concerns is “the impact this contradiction will have on Walgreens’ brand image as a company focused on health.”

The shareholders decided to file the resolution because management failed to respond to their requests for further study of the topic in ongoing dialogues, the statement said.

The statement also quoted the proposal’s lead filer, Tom McCaney of the Sisters of St. Francis of Philadelphia, Aston, Pa., who said, “When the evidence of the health impacts of tobacco are so abundant and glaring, the public has no alternative but to view Walgreens’ persistence in selling these products as profiteering at the expense of the health of its customers. This perception can only hurt the company. We question the board’s oversight on this matter and are requesting a report that lays out the potential risks to the company.”

Two years ago, CVS Caremark Corp., Woonsocket, R.I., pulled tobacco from the shelves of its 7,700 drug stores, creating a dramatic shift in market share in many trade areas. Addressing the NACS State of the Industry Summit in Chicago in 2015, speaker Andy Jones, president and CEO of Sprint Food Stores, Augusta, Ga., called CVS’ move a “$2 billion gift” to the c-store industry.

Walgreens has more than 8,000 locations in more than 50 states.

The resolution currently facing Walgreens also cited a letter from 28 U.S. attorneys general that urged the company to discontinue tobacco sales. The statement quoted the letter as saying, “There is a contradiction in having these dangerous and devastating tobacco products on the shelves of a retail chain that services health-care needs. The availability of such products in a retail store that also serves as a pharmacy normalizes tobacco use; furthermore, selling tobacco products in the same store as smoking-cessation products is likely to increase impulse tobacco purchases among those trying to quit and undermines their efforts.”

A Walgreens official declined to comment on the issue.

Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


How to Make the C-Store the Hero for Retail Media Success

Here’s what motivates consumers when it comes to in-store and digital advertising

Mergers & Acquisitions

Soft Landing Now, But If Anyone Is Happy, Please Stand Up to Be Seen

Addressing the economic elephants in the room and their impact on M&A


Opportunities Abound With Limited-Time Offers

For success, complement existing menu offerings, consider product availability and trends, and more, experts say


More from our partners