Florida Cigarette Sales Fall

 

Just two months since a $1 tax was tacked onto cigarette packs in Florida on July 1, cigarette sales have plummeted and smokers are driving into neighboring states to avoid the extra expense, Florida Today reported.

 

According to the latest figures from the Department of Business and Professional Regulation, cigarette pack sales plunged by 28%  from July 2008 to July 2009  or 76.8 million packs sold this year compared to 106.6 million packs a year ago. And, that was before the tax increase began wreaking havoc on sales.

 

The state’s convenience stores, where most cigarettes are sold, and where tobacco makes up 34% of non-gasoline sales, are already feeling the affects of the tax, Jim Smith, head of the Florida Petroleum Marketers and Convenience Store Association told Florida Today.

 

Some owners are working longer hours behind the counter and cutting employee shifts to make ends meet, and layoffs are inevitable.

 

“Indeed, my members in the northern part of the state have seen reduced sales of 30%,” Smith said. “You are going to see layoffs, I think that’s going to come. Sooner or later, something’s got to give.”

 

C-store owners noted that they are unable to compete with big chain stores, such as Wal-Mart, which have more buying power and therefore are able to offer cheaper cigarettes.

 

Some also are cutting back on the number of cartons they buy, as consumers are opting for individual packs of cigarettes and filtered cigars, which cost around $1.20 per pack compared with about $6 for a pack of cigarettes.

 

Other smokers are just driving 15-minutes to Georgia to Huds III convenience store and Texaco station in tiny Beachton, where cartons of premium cigarettes are $8 to $12 cheaper and where  weekly carton sales have skyrocketed from 150 to 800 since the beginning of July.

 

Meanwhile, health advocates point to studies, including a 1998 market analysis by Credit Suisse First Boston Corp., that show that for every 10% increase in price, overall smoking declines by 4% and tobacco use among kids drops 7%.

 

Before the July tax increase, Florida taxed cigarettes at 34 cents a pack, well below the national average of $1.19 and it was one of only six states that had not raised cigarette taxes in 10 years.

 

The new tax promises to bring in $900 million a year in new state revenue.

 

To make sure that Florida actually acquires that revenue, lawmakers for the first time ordered regulators to begin tracking down Internet tobacco sales. Department of Business and Professional Regulation press secretary Alexis Antonacci Lambert said administrators are hiring seven people to begin the hunt.

 

 

 

 

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