In April, Scott Gottlieb resigned as commissioner of the U.S. Food and Drug Administration (FDA), causing some observers to speculate that the agency would back off on the pressures his two-year tenure put on the tobacco industry.
But when Ned Sharpless, former director of the National Cancer Institute, was named acting FDA head, he quickly dismissed that notion. “Let me dispel any misconceptions that the change in leadership reflects some desire of the president or the secretary for the FDA to go in a different direction from the Gottlieb era,” he said.
Menthol in Purgatory
Last year, in a public statement issued on Nov. 15, Gottlieb announced the FDA “… will advance a Notice of Proposed Rulemaking that would seek to ban menthol in combustible tobacco products, including cigarettes and cigars …” citing that youth smokers were more likely to use menthol cigarettes than any other age group.
FDA’s website notes more than 19.5 million people currently smoke menthol cigarettes. SwiftIQ data presented at the National Association of Convenience Stores (NACS) State of the Industry (SOI) Summit showed menthol cigarettes account for 35% of cigarette unit sales and 34% of cigarette dollar sales.
“I’m deeply concerned about the availability of menthol-flavored cigarettes,” Gottlieb wrote in November. “I believe these menthol-flavored products represent one of the most common and pernicious routes by which kids initiate on combustible cigarettes.”
But in March, new FDA draft guidance, titled “Modifications to Compliance Policy for Certain Deemed Tobacco Products,” shifted the focus to vape and e-cig flavor restrictions to curb what the FDA has referred to as an “epidemic” of underage use of flavored electronic nicotine delivery systems (ENDS).
But that doesn’t mean the FDA has forgotten about menthol cigarettes. Last November, Gottlieb noted, “Unlike menthol-flavored ENDS, there’s no evidence to suggest that menthol-flavored cigarettes may play a role in harm reduction for adult smokers.”
While retailers await potential action from FDA on menthol, some cities are already taking action.
Minneapolis banned sales of menthol products in c-stores in 2018, restricting sales to tobacco shops and liquor stores, which do not sell to minors. San Francisco has also banned flavored tobacco sales, including menthol. In April, Sacramento banned menthol cigarettes along with flavored e-cigarette cartridges, and other flavored tobacco products, effective Jan. 1, 2020. California Senate bill SB38 aims to ban flavored tobacco, including menthol cigarettes. New York City is also weighing a menthol cigarette ban.
In May, the city council of Beverly Hills, Calif., proposed eliminating the sale of all tobacco products except in cigar lounges and luxury hotels.
But c-store retailers argue the c-store industry is already on the frontlines of preventing youth access to tobacco products, including flavored e-cigs and menthol cigarettes, making bans and regulations excessive.
Scott Zaremba, president of Zarco USA in Lawrence, Kan., and a member of the Petroleum Marketers and Convenience Store Association of Kansas, believes the proposed FDA regulations to prevent youth access are unnecessary, especially since the Kansas association’s membership has a 92% compliance rate during sting operations.
“The convenience industry in our state is doing an excellent job of compliance,” Zaremba said. “We understand the regulations, adhere to them and believe in them. We want to abide with the laws on the books.”
Lisa Dell’Alba, president and CEO of Square One Markets based in Bethlehem, Pa., agrees the convenience industry has acted responsibly in selling age-restricted products and should be allowed to continue to do so.
“I would be very concerned if that particular category was not something we are able to offer our customers,” Dell’Alba said. “I agree with the FDA’s concerns about keeping these types of products out of the hands of kids, but I think we’re being unfairly targeted as an industry.”
The Smoking Age
According to the Centers for Disease Control and Prevention, 90% of cigarette smokers smoked their first cigarette before age 18, and a movement is underway to up the smoking age to 21. Already, more than a dozen states and more than 450 local governments have passed bills to increase the legal age to buy tobacco to 21, and Congress is considering similar action on the federal level.
In February, a Hawaii state legislator proposed a bill that would halt the sale of all cigarettes in the state by increasing the minimum age for tobacco purchase to 30 in 2020, 40 in 2021, 50 in 2022, 60 in 2023 and 100 in 2024. Although the bill received plenty of publicity, it died in committee. The legislator still wants the age limit raised to 25.
Tax Hikes
Since 2002, 48 states and the District of Columbia have increased cigarette tax rates 136 times, the Campaign for Tobacco-Free Kids, an advocacy organization, reported in December 2018. While the average state cigarette tax is $1.79 per pack, the highest combined state-local tax rate per pack is $6.16 in Chicago, followed by New York City at $5.85.
In April, Colorado HB19-1333 would have asked voters to approve upping the tax on a pack of cigarettes to $2.49 from 84 cents and add a 62% tax on all nicotine products, but the bill died in the Senate in May. Illinois lawmakers discussed in May plans to increase the state’s cigarette tax $1 per pack — three times higher than the 32-cent increase the state’s governor proposed. Despite regulatory barriers, cigarettes were still the top merchandise category at c-stores in 2018, according to NACS SOI Summit data.
Chicago-based research firm IRI found cigarettes brought in $55.95 billion dollars in the 52 weeks ending March 24, 2019, with unit sales down 3.1% year-over-year.
