By John Lofstock, Editor.
Of all the different tobacco legislative bills introduced this year in Congress and state legislatures, two issues stand out, namely higher tobacco taxes and electronic cigarettes. Both issues will help shape the tobacco offering at convenience stores for years to come.
The Centers for Disease Control and Prevention (CDC) on Sept. 5, announced the findings from the National Youth Tobacco Survey, in a Morbidity and Mortality Weekly Report, showing that the percentage of high school students who reported ever using an e-cigarette rose from 4.7% in 2011 to 10% in 2012.
The news has the National Association of Tobacco Outlets (NATO) speaking out to refute the data, and asserting that the CDC is merely setting the stage for the FDA’s proposed e-cigarette regulations in two months.
According to the CDC study, high school students using e-cigarettes within the past 30 days rose from 1.5% to 2.8%. Use also doubled among middle school students. Altogether, in 2012 more than 1.78 million middle and high school students nationwide had tried e-cigarettes.
The study also claimed that 76.3% of middle and high school students who used e-cigarettes within the past 30 days also smoked conventional cigarettes in the same period. In addition, one in five middle school students who reported ever using e-cigarettes say they have never tried conventional cigarettes. This raises concern that there may be young people for whom e-cigarettes could be an entry point to use of conventional tobacco products, including cigarettes.
Tom Briant, executive director of NATO, said the CDC’s study about youth use of electronic cigarettes raises too many unanswered questions for the data to be used as a basis for proposing significant restrictions on electronic cigarettes.
“It appears the CDC and the FDA are extrapolating data from the 2011 and 2012 National Youth Tobacco Surveys (NYTS) to support the FDA’s announced plan to expand its authority over other tobacco products, including electronic cigarettes, by issuing proposed regulations this October,” Briant said. “However, studies have found e-cigarettes to be effective in reducing cigarette smoking or aiding smokers in quitting. Given that e-cigarettes appear to have a positive effect in the reduction of smoking tobacco-burning cigarettes, NATO can only conclude that the FDA is setting the stage for the roll-out of the agency’s proposed e-cigarette regulations in two months.”
NATO and its retailers that operate more than 28,000 tobacco stores, convenience stores, service stations, grocery stores and liquor stores nationwide firmly agree that underage youth should not use e-cigarettes.
“Currently, 26 states have enacted laws that prohibit the sale of electronic cigarettes to minors and retailers are abiding by those laws and their own business practices to prevent the sale of electronic cigarettes to minors,” Briant said. “The CDC’s claim that electronic cigarette use has more than doubled among middle and high school students from 2011 to 2012 is a generalization and may not be supported by the NYTS data. The NYTS statistics relied on by the CDC to estimate how many youth use electronic cigarettes, including middle and high school students who currently use e-cigarettes and those who have used an e-cigarette just once. This means that the CDC’s claim that electronic cigarette use has doubled among underage youth is likely overstated since students who used the product one time may no longer be using e-cigarettes.”
Moreover, NATO has not seen the actual 2012 NYTS study itself—only the summary that has been provided by the CDC. “NATO does not support the sale of e-cigs to underage consumers,” Briant said. “However, NATO members firmly stand behind the right of adults to purchase e-cigarettes, particularly when they are looking for assistance in ‘stepping down’ from smoking traditional cigarettes. We hope any future regulations proposed by the FDA will not interfere with the right of adults to choose what, at least at this time, appears to be a less harmful alternative to traditional cigarettes.”
With 2013 coming to a close, Briant sat down with Convenience Store Decisions to look back at the tobacco legislative and regulatory actions under consideration across the country.
CSD: For the past several years, local legislative efforts have been increasing both in number and kind of retail restrictions. Has this trend continued in 2013?
TB: The short answer is yes. Local regulatory actions have continued to increase in cities and counties. As of Sept. 1, 70 cities and counties in 16 states have considered local restrictions on tobacco products.
In some cases, the local proposals have been more numerous and restrictive than state tobacco legislation. The local restrictions have included banning coupon redemption, requiring all tobacco products to be stocked out of the public’s view, limiting or reducing how may retailers are licensed to sell tobacco products, banning the sale of e-cigarettes, requiring minimum cigar package sizes, and raising the legal age to purchase tobacco to either 19 or 21 years old.
While towns in Massachusetts have proposed just under one-half of all of these local tobacco restrictions, local governments in California, Colorado, Florida, Illinois, Indiana, Iowa, Maryland, Minnesota, Nebraska, New York, North Carolina, Pennsylvania, Virginia, West Virginia and Wisconsin have also considered local tobacco restrictions.
CSD: What has NATO seen on the state tobacco legislative front this year?
TB: Although 36 state legislatures considered bills to increase or decrease cigarette and tobacco product tax rates, only eight states have actually enacted an increase or decrease in taxes.
Arkansas enacted a cap on premium cigars of 50 cents a cigar, Colorado made permanent the state sales tax of 2.9% on cigarettes; Kentucky reduced the chewing tobacco tax rate to 19 cents per single unit, while Massachusetts raised the cigarette tax rate by $1 per pack to $3.51. Cigars and RYO tax rates were raised to 40%, and the tax on moist snuff and chewing tobacco rose 210%.
Minnesota had the largest cigarette tax increase at $1.60 per pack and the OTP tax was raised to 95%. New Hampshire had a 10-cent per pack cigarette tax increase go into effect automatically because cigarette revenue was less than expected. The tax on little cigars in Ohio increased from 17% to 37% of the wholesale price, and in Texas a 55-cent per pack tax is now assessed on non-settling manufacturer cigarette brands and non-settling manufacturer cigarette tobacco.
In terms of taxation of e-cigarettes, Minnesota remains the only state that taxes e-cigarettes and applies a 95% tax rate. Four other state legislatures introduced, but did not pass bills to tax e-cigarettes, including Massachusetts (90% of the wholesale cost), Utah (86% of the wholesale cost), and Oklahoma and South Carolina (five cents per
Also on the state level, five states considered, but did not enact bills that would have raised the legal age to purchase tobacco products. The states with bills included New Jersey (age 21), New York (bills for ages 19 and 21), Oklahoma (age 19), Oregon (age 21) and Texas (age 21). Currently, Alabama, Alaska, New Jersey and Utah have a minimum purchase age of 19.
CSD: Turning to the federal level, what kind of legislation and regulations were proposed?
TB: This year, the federal level topics have included several FDA issues, including a request for additional public input on the use of menthol in cigarettes and an announcement of possible new proposed regulations to be issued by October on cigars, pipe tobacco and electronic cigarettes.
Regarding federal tobacco taxation, President Obama has proposed to expand pre-school education to all low income four year olds across the country at a cost of $75 billion over the next 10 years and to pay for the expansion by raising the federal cigarette tax from $1.01 per pack to $1.95 per pack and also increasing the federal tobacco tax rate on all other tobacco products by 93%.