Ever since the Food and Drug Administration (FDA) was granted regulatory authority over combustible cigarettes with the 2009 Tobacco Control Act, there have been stirrings throughout the convenience store industry that the agency would withdraw market authorization for menthol cigarettes. It wasn’t until the FDA announced in January 2022 that it would revisit the possibility of a menthol ban, that many tobacco category managers sensed there was a reinforced seriousness behind the effort this time.
On April 28, the FDA made it official. According to its public statement, “The Food and Drug Administration is proposing a tobacco product standard that would prohibit menthol as a characterizing flavor in cigarettes…. This proposed product standard would reduce the appeal of cigarettes, particularly to youth and young adults, and thereby decrease the likelihood that nonusers who would otherwise experiment with menthol cigarettes would progress to regular smoking.”
Before the consequence of such action on convenience stores can be assessed, it is worthwhile to review the FDA timeline. Per protocols, the public has 60 days to submit comments regarding the impact a menthol ban would have on businesses and consumers. After the comment period, the Office of Management and Budget will conduct a review for unintended consequences and other factors. The FDA then has a compulsory one- to two-year delay while concerns are addressed.
Therefore, the immediate impact on c-stores is basically nullified because menthol cigarettes are permitted to be sold as this process unfolds. Rather, any consequence will develop only when the rule change takes full legal effect and survives anticipated court challenges. Of course, at that point, removing menthol cigarettes from tobacco sets will deliver a big hit to the category for most c-stores. Currently, menthol accounts for approximately one-third of all cigarette sales nationwide.
For some stores, the impact could be even greater. This is often the case for retailers with a customer base that predominantly includes people of color. Medpage reports that an estimated nine out of 10 Black smokers choose menthol, and nearly 30% of Hispanic smokers reach for the flavor. Indeed, arguments have been waged that a menthol ban unfairly targets minority populations.
Naturally, retailers hope cigarette customers will switch to non-menthol options or other tobacco product lines. However, many observers, including the National Association of Convenience Stores (NACS), have expressed concern a ban would further empower the black market.
One thing leaning in c-stores’ favor is the extended timeline. Not only can they still ring up menthol cigarette sales for now, but there’s also time to adjust planograms and confer with distributors regarding possible buyback programs.
