The Food and Drug Administration (FDA) appears intent on moving ahead with revoking market authorization for menthol cigarettes. Next month, the agency is expected to release a proposed rule on the tobacco product standard to eliminate menthol cigarettes from convenience stores and other tobacco retailers.
“(The National Association of Convenience Stores) is on record opposing menthol bans, as we believe illicit vendors will quickly source and begin selling foreign and counterfeit menthol cigarettes,” said Lyle Beckwith, NACS senior vice president of government relations, in a recent public statement.
What’s more, menthol makes up 37% of the c-store cigarette category, which fires up approximately 28% of all in-store sales, per the 2020 NACS State of the Industry report. A hit to menthol certainly would further dampen sales.
According to IRI convenience store data, cigarettes finished out 2021 with a 52-week gain in dollar sales of less than 1% in a year-to-year comparison for the week ending Dec. 26. More recent data from Nielsen indicated the segment is slowing even more. Dollar sales in all channels, including c-stores, posted losses for both the two- and four-week periods ending Jan. 29, -6.3% and -5.7%, respectively.
Updating the Back Bar
Dips in cigarette sales prompted Scrivener Oil Co. leaders to reconfigure back bars at its 12 Signal Food Stores in southwest Missouri.
“At some locations, cigarette spacing decreased in order to make room for more smokeless and other tobacco products (OTPs),” said Sean Bumgarner, Scrivener vice president. “We replaced all of our cigarette, smokeless and OTP shelving with new shelving from Harbor Industries during 2021. Not only does it look nicer than our old shelving, it is more flexible in the layout of our products.”
Of course, planograms will change again if the federal menthol restriction takes effect, but that’s sure to be at least a year out. Federal regulations must follow a specific path that typically takes several months; however, states have more agility, and they continue to contemplate menthol prohibitions.
“States that introduced flavor ban legislation (including a ban on menthol cigarettes) in 2021 and carried the legislation over to the 2022 state legislative sessions since the bills did not receive action (or were not passed in 2021) include: Hawaii, Maine, Minnesota, Vermont and Washington,” noted Thomas Briant, executive director and legal counsel for the National Association of Tobacco Outlets (NATO).
On a more positive note, in late December, the FDA approved a modified-risk classification for 22nd Century’s VLN King and VLN Menthol King, which contain 95% less nicotine than traditional cigarette formulations. This is the first modified-risk approval for combustible cigarettes.