Catching Fire

As cities, states try to raise tobacco purchase age, retailers wonder where it'll happen next.

By
Melissa Vonder Haar, Tobacco Editor

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It started out East. On April 22, the New York City Council announced its intention to introduce legislation that would raise the minimum age to purchase tobacco products from 18 to 21, making it the first major city with a minimum purchasing age older than 19.

“With this legislation, we’ll be targeting the age group at which the overwhelming majority of smokers start,” said New York Council Speaker and Democratic mayoral hopeful Christine Quinn when announcing this new legislation.

Such a proposal is not surprising for a city that was one of the fi rst to pass public smoking bans and has recently attempted to enact restrictions on soda sizes and tobacco displays.

Less than a week later, New York City had some company: the Empire State itself. State Sen. Diane Savino and Assemblywoman Linda Rosenthal announced legislation that would raise the legal age for all of New York State. And it’s not just in New York. Chicago Alderman George Cardenas has proposed similar legislation; several boards of health in Massachusetts towns also are eyeing 21 years as the new legal age to purchase tobacco. (Two already have done so.) And most recently, as CSPwent to press, respected New Jersey State Sen. Richard Codey proposed emulating New York’s measure in the Garden State.

On the surface, the goal of reducing smoking rates of minors is a noble one; it has been championed by the c-store and tobacco industries through strict ageverification programs. However, the legislation Quinn and others have proposed doesn’t make it illegal for those under the age of 21 to smoke, just for retailers to sell tobacco products to them.

It’s this discrepancy that has prompted retail advocates such as Sal Risalvato of the New Jersey Gasoline-Convenience-Automotive Association (NJGCA) to speak out.

“I cannot remain silent because this legislation would make it incumbent upon the owners and employees of New Jersey’s convenience stores to vigilantly police their customers to ensure that the law is being upheld,” Risalvato said in a written response to Codey’s bill. “This proposal burdens small-business owners who make a living selling coffee, drinks, snacks and newspapers that tend to accompany tobacco purchases.”

As the battle begins, expect likeminded proposals to spread across other parts of the country. As New York’s Quinn said during a public appearance with Codey, “This has now truly become a regional, if not national, effort.”

Lyle Beckwith, senior vice president of government relations for NACS, agrees: “History suggests that these types of initiatives do tend to spread.”

Which means it’s important for all retailers to look at what effect these types of laws might have on their business. Whether it’s lost sales; carding confusion due to different laws in different states, cities or even counties; a growing black market; or steep penalties, one thing is for sure: Raising the age to purchase tobacco on a city or state level will have national implications.

Challenges on the Front Lines

Not surprisingly, many retailers’ hackles are raised over bids to raise the tobacco purchasing age to 21. A recent Tobacco E-News/CSP Daily News poll showed that 58% of tobacco retailers believe these measures would have a moderate to signifi cant effect on their tobacco sales. Though 18- to 20-year-olds may account for a small amount of smokers, retailers will miss out on more than cigarette sales.

“Certainly, raising the legal age to purchase tobacco to 21 would have a negative impact on our store sales,” says Steve Monaco, director of category management for Tedeschi Food Shops, Rockland, Mass. “Not only would the cigarette sales decline, but ancillary products would decline as well.”

The potential loss of both tobacco and higher-margin add-on purchases made by tobacco buyers is even harder to swallow given the lengths the industry has gone to ensure minors do not purchase tobacco products.

“We have encouraged state and local governments, along with our retail customers, to vigorously enforce existing minimum-age requirements as a proven deterrent to underage purchase of tobacco products,” says Brian May, a spokesperson for Philip Morris parent company Altria Group Inc., Richmond, Va. “To that end, we were original supporters of the ‘We Card’ retail program and continue to encourage retailers to train their employees on effective age-verifi cation practices.”

In fact, NATO executive director Thomas Briant reports that the passing rate for retail compliance checks regarding sales to minors have been rising, due in large part to We Card and similar retail efforts. According to a fiscal year 2012 Synar Amendment Compliance Survey issued by the New York State Office of Alcoholism and Substance Abuse Services, 92% of retailers passed inspections and did not sell tobacco products to minors. This represents a continuing trend of improving compliance. And the high level of compliance is playing out on a national level: Ninety-six percent of retailers have passed federal compliance checks authorized by the Food and Drug Administration’s Center for Tobacco Products.

However, such compliance becomes significantly more difficult if a small number of cities or states adopt a different minimum age to purchase tobacco.

“By adopting an age-21 requirement, a town or city becomes an island,” Briant says.And the reality is, many retailers do not operate on an island: Many run locations across counties and states, and thus would have to adopt different training procedures to abide by different age restrictions.

“If this turns into a county-by-county restriction, it would make it difficult to control from store to store,” says Monaco of Tedeschi.

Jim Calvin, president of the New York Association of Convenience Stores (NYACS), agrees: “As someone who has personally trained more than 5,000 retail personnel on the proper techniques for preventing underage sales, I can tell you that the more uniform and consistent the laws are, the easier it is for clerks and cashiers to remember and execute them. Having tobacco purchase ages of 18 in one jurisdiction, 19 in another and 21 in another breeds confusion, and confusion increases the risk of mistakes at the counter.”

And though anti-smoking advocates might push to raise the minimum age to 21 nationally, the 2009 Family Smoking Prevention and Tobacco Control Act expressly prohibits the FDA from raising the federal minimum age from 18 without changing the statute—which would require Congressional approval. That means any state, city or county that goes over the nationally set age of 18 will further complicate carding procedures for retailers.

Black-Market Threat

While many local governments will follow New York’s lead in raising the minimum age, others will undoubtedly stick with the federal requirement of 18. And because it’s possible to purchase tobacco products at 18 in other cities and states, many 18-year-olds will simply make the trip to do so—or, worse, look to the already burgeoning black market, which is bad news for retailers, manufactures, governments and anti-smoking groups alike.

“Imposing a restriction like this on adult consumers of a legal product would likely exacerbate problems with the illicit trade in tobacco products,” says May, citing that Altria supported the FDA in setting the national minimum age at 18. “It will likely push sales away from lawabiding retailers to illegal smugglers who care little whether their customers are 16, 18 or even 21 years old.”

The black market is already a huge problem for New York, which boasts the highest cigarette taxes in the country at $5.85 per pack: The Washington, D.C.-based Tax Foundation estimates that a whopping 61% of the city’s cigarettes arrive illegally. A recently busted smuggling ring made more than $22 million in profi ts in just 17 months by selling lowertaxed or untaxed cigarettes from North Carolina and Virginia.

“Undoubtedly, with a rampant black market already existing in New York City, adults aged 18, 19 and 20 may turn to purchasing tobacco products from unlicensed black-market sellers,” Briant says. “That does not solve the issue. Rather, greater enforcement against the blackmarket operators needs to occur to minimize the illegal sale of tobacco products in New York City.”

Indeed, the data does not support the concept that raising the minimum age to purchase tobacco products has an effect on smoking rates: Calvin reports that two of the four states that have set the smoking age at 19 have a higher smoking rate than New York.

“It would impact smoking rates if New York City’s smoking population was a captive audience, but they’re not,” Calvin continues. “They already get more than half of their cigarettes from illegal channels that ignore the purchase age.”

Illegal to Sell, Not to Consume

Further compounding the black-market threat is the fact that, under the proposed legislation, those under 21 are not at any risk of prosecution if they’re caught consuming illegally obtained tobacco products.

“It’s important to remember that this involves the tobacco purchase age, not the smoking age,” says Calvin. “New York City’s policy toward the tens of thousands of minors who obtain cigarettes from older friends, family or the black market is, ‘Smoke ’em if you got ’em.’

”This is ironic, given that New York—and the other cities and states proposing similar measures—has attempted to sell the public on moving the purchase age to 21.

“In a press release from the New York City Council Office of Communications, a claim is made that raising the legal age would reduce the opportunities for underage youth to obtain tobacco products from adult-aged youth,” Briant says. “Increasing the legal age to 21 will not solve the problem of ‘enabling adults’ who are adult-age siblings, other family members and friends who are older than 21 but may still obtain and provide tobacco products to underage youth.”

“I do not feel the state or any county would gain as a result of this action,” Monaco of Tedeschi says. “People between the ages of 18 and 20 that smoke now will continue to be able to get their hands on product by other means.”

Yet, while it is not at all illegal for minors to consume tobacco products, retailers caught selling to them will pay a hefty price. Under New Jersey’s proposal, stores caught selling to kids face fi nes of $250 to $1,000 and can have their license to sell tobacco suspended or revoked.

NJGCA’s Risalvato wrote in response, “Why doesn’t Sen. Codey propose penalties for those who violate the law and purchase cigarettes? If an individual attempts to manipulate a conveniencestore employee to unlawfully dispense a tobacco product, that individual should be held accountable for their actions.”

If lawmakers such as Codey and Quinn want to reduce the amount of youth smoking, there is little evidence to suggest that targeting retailers will help their cause. The New York City Council cites data that 80% of New York City smokers started before age 21, and that an estimated 20,000 New York City public high school students smoke, as reasons to raise the minimum age. However, Calvin points out that the Centers for Disease Control repeatedly finds that the kind of underage smokers the council describes get their cigarettes from friends and family members—not from retailers.

“It’s a well-intended exercise in futility, given the realities of where and how young people obtain cigarettes,” he says. “Piling more restrictions on retail stores isn’t going to curtail their access to tobacco.

“The only way to do that is to pass and enforce a law making it a civil violation for minors to possess tobacco, but city hall refuses to do that. They’re afraid to hold teenage smokers accountable.”  

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