Sheetz Gets Aggressive on Tobacco

In response to the April 1 increase in federal excise taxes, Sheetz Convenience Stores in Maryland are guaranteeing the lowest allowed price on cigarettes in the state.

“Maryland sets a state minimum on cigarette prices and if we sold them for less than the state minimum, I’d end up in jail. However, I can promise you that Sheetz customers in Maryland won’t pay a penny more than the state minimum,” said Louie Sheetz, executive vice president of marketing for the Altoona, Pa.-based chain.”

Sheetz, which operates more than 350 stores in the Mid-Atlantic, also has been alerting its customers that the tobacco companies raised prices more than three weeks earlier than the April 1 scheduled increase in the federal excise tax. The tax is increasing as part of President Obama’s funding plan for State Children’s Health Insurance Program (SCHIP). This program helps states provide health care to more than five million of the nation’s uninsured children through a matching funds program.

“The cigarette manufacturers think they’re pulling an April fools trick on their customers,” said Sheetz. “Consumers were expecting an increase April 1, but the tobacco companies actually raised the prices as early as March 11, which forced us to raise our retail prices. Now, they’re just pocketing that extra money. Add to that the fact that in the past few weeks, they’ve also raised their own prices, and so now they’re taking in an extra seven bucks per carton. In my book, that’s more than an April Fool’s trick. That’s just wrong.”

Sheetz held off on passing on the increases as long as possible because it wanted to protect consumers. Stores posted notices at the counter explaining that manufacturers took the increases early. Sheetz sympathizes with customers who express grief and anger when confronted with the higher prices.

“I’m angry too,” Sheetz added. “It was unnecessary for the cigarette manufacturers to raise prices early, and I’m calling them out on it. At least we’re able to guarantee our customers the lowest price on cigarettes in Maryland. That will help.”

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