Posts

The young and poor are keeping big American tobacco alive

By Roberto A. Ferdman, The Washington Post

Big American tobacco wants to get bigger in America.

Reynolds American Inc., which sells both Camel and Pall Mall cigarettes, has agreed to acquire rival and Newport menthol-maker Lorillard for an estimated $27.4 billion. If approved, the deal will effectively combine the portfolios of two of the country’s largest cigarette companies—as of last year, Reynolds and Lorillard controlled roughly 26 percent and 14 percent of the U.S. market, respectively—and send a number of brands to the smaller but still significant player Imperial Tobacco Group.

“The deal strengthens Reynolds position in the US, supplying them with Newport’s excellent brand equity and establishes Imperial as a viable third force in the world’s third largest cigarette market by volume,” Shane MacGuill, Tobacco analyst at Euromonitor International, said in an interview.

The shuffle atop American tobacco is a sign that consolidation might be the industry’s best way to cope with the country’s growing disinterest in cigarettes. It also nods to a few areas of potential growth, most notably menthol cigarettes, for which sales have proven comparatively resilient—Newports, a menthol brand, is second only to Marlboro in U.S. sales.

The-most-popular-cigarette-brands-in-the-U-S-Cigarettes-sold-in-2013_chartbuilder

But the deal is also a surprising indication of optimism surrounding the U.S. industry.
“The U.S. is a key growth market for us,” Alison Cooper, Chief Executive for Imperial Tobacco Group, said in a call with reporters. “We’re hugely excited about the opportunities that lie ahead.”
Why? Because the American tobacco market, while challenged, is still more attractive than many of its international counterparts. The U.S. tobacco market contracted by four percent last year, according to the Food and Drug Administration, but cigarette sales in Europe are falling even faster—they are now nearly half what they were in 2000—and other markets are difficult to penetrate. China’s, while growing, is dominated by local player China National Tobacco Corp.
Make no mistake, cigarette consumption has long been in decline in the United States. Americans adults, on average, smoke fewer than 1,300 cigarettes per year, according to a report (pdf) released earlier this year by the Surgeon General. By comparison, that number was upwards of 4,200 in 1963–three times the current figure.

Tobacco-consumption-historical

But some states and demographics still seem to be clinging on to the habit–and keeping American tobacco companies afloat.

“Approximately one in five U.S. adults smoke cigarettes, and certain population groups have a higher prevalence of smoking,” the Centers for Disease Control and Prevention (CDC) noted in a report from earlier this year.

On a state-by-state level, that certainly appears to be true. Take Kentucky and West Virginia, for instance, which each sport smoking rates well above the national average, according to the CDC’s report. More than 28 percent of Kentucky’s and West Virginia’s adult population were regular or frequent smokers as of 2012. In Utah, smokers made up barely more than 10 percent of the population; in California, just over 12 percent; and in New York, just over 16 percent. The national smoking rate was just above 18 percent.

Tobacco-by-state

Smoking, as it happens, also appears to be highly correlated with both poverty and education levels in the United States: 27.9 percent of American adults living below the poverty line are smokers, while just 17 percent of those living above it are, according to the CDC; 24.7 percent of American adults without a high school diploma are smokers, while 23.1 percent of those with one are. Only 9.1 percent of those with an undergraduate degree, and 5.9 percent of those with a graduate degree are smokers.

It ranges considerably by race, too. The CDC found that Americans of mixed race were the biggest smokers, with 26.1 percent still smoking cigarettes in 2012. Next were Native Americans, with 21.8 percent smoking. By comparison, only 10.7 of Asians smoked in 2012, according to the survey.
And cigarettes are most popular among those adults between the ages of 25 and 44 years old: 21.6 percent of the age group smokes, more than any other.
Tobacco-smokers
If the big tobacco deal is approved, Reynolds will suddenly find itself with more than 30 percent of the American market, and Imperial will find itself with more than 10 percent (Altria Group, which owns Marlboro, controls nearly 50 percent). Don’t be surprised if both turn to those Americans who have been slowest at kicking their respective cigarette habits for help.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/16/the-young-and-poor-are-keeping-the-u-s-tobacco-industry-alive/

Military's tobacco discount: Up in smoke

DONNA CASSATA, The Associated Press
WASHINGTON (AP) – The familiar image of a battle-hardened member of the military smoking a cigarette may become a little less common.
The Senate Appropriations defense subcommittee on Tuesday approved a $549.3 billion defense spending bill that would eliminate the 25 percent discount that members of the armed services enjoy when buying tobacco products at commissaries and elsewhere, including cigarettes and chewing tobacco.
Sen. Dick Durbin, D-Ill., chairman of the subcommittee, said studies show that tobacco use is higher in the military. He said that translates into more illnesses and health care costs of $1.6 billion a year.
“There is no reason these deadly products are subsidized,” Durbin said.

Sen. Lisa Murkowski, R-Alaska, said she was surprised that the subsidy was so high.
The defense bill for the fiscal year beginning Oct. 1 would do away with the discount.
The move is controversial and certain to generate disagreements in Congress.
The House version of the defense policy bill would thwart any Navy efforts to restrict access to tobacco. In May, Rep. Duncan Hunter, R-Calif., described smoking as one of the few pleasures for a member of the military, and he easily convinced his colleagues on the House Armed Services Committee to back his measure.

http://www.philly.com/philly/business/20140715_ap_94954c617fa642af84a1e8e0b7a6e73d.html#BkjokdzS2RZ315xC.99

Washington Post: Raise the smoking age

The Washington Post

New Jersey’s Senate approved a raise in the legal smoking age from 19 to 21 last week, pushing the groundbreaking experiment in public health one step closer to fruition. The bill, which the General Assembly will consider in the fall, would make New Jersey the first state to prohibit the sale of tobacco products, including e-cigarettes, to anyone younger than 21. It is designed to cut teenage exposure to tobacco, since about 90 percent of regular smokers have their first cigarette before turning 18. A few localities, such as New York City and the island of Hawaii, already raised the age.

Raising the smoking age eventually could cause a decline of 30 percent in adult smokers, according to one estimate, but whether it will have such a large effect in New Jersey remains to be seen. New Jersey’s current smoking age already prohibits virtually all high schoolers from buying cigarettes. Very few extensive case studies exist now, but the Food and Drug Administration is due to release a report on the effect of a 21- or 25-year-old smoking age next year.

There is no harm in trying. The experiment’s success could spur on the District of Columbia, which has a similar bill in committee, and other states that are contemplating the move. The only way the measure can hurt is if it distracts policymakers from implementing more proven prevention strategies, such as higher taxes.

Despite New Jersey’s campaign against smoking, some key areas still need work. E-cigarettes, many of which contain known carcinogens and whose popularity has skyrocketed, are taxed at a low rate. The cigarette tax has not been raised in five years; New Jersey’s $2.70-per-pack tax lags behind that of eight states. Most troubling, none of the revenue from the tobacco tax goes to tobacco prevention efforts. One good start would be to pass a bill that would equalize the tax between tobacco products.

In early June, when the smoking-age bill was still in committee, state Sen. Ronald Rice Sr., D, cast one of only two votes against it. “I’m getting tired of folk trying to tell adults what to do,” he said. But cigarettes, unlike some alcoholic drinks, have no health benefits and are destructive even in small doses. Exactly what New Jersey would be depriving its citizens of, besides a slow poison, is unclear.

Mr. Rice also argued that it was unfair to ban smoking for 19- and 20-year-olds who “can buy real estate, pay state and sales taxes” and join the military. There he has a point; there is no societal consensus about when a citizen reaches adulthood. Yet when urgent practical needs are balanced with theoretical inconsistencies, initiatives that save lives should take precedence. As New Jersey and other states battle their smoking crises, they should undertake initiatives both innovative and tested.

http://www.sltrib.com/sltrib/opinion/58169701-82/smoking-age-jersey-tobacco.html.csp

Hindsight, MN 2020: Cigarette Tax Increase Succeeds in Reducing Tobacco Usage

By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis
From Hindsight, Minnesota 2020 Blog

One of the reasons for increasing Minnesota’s cigarette tax was to incentivize current smokers to “kick the habit.” It appears that the cigarette tax increase is already having the desired effect. According to information from ClearWay Minnesota, “Quit attempts by Minnesotans have increased dramatically since the cigarette tax increased by $1.60 per pack on July 1, 2013. During the first two weeks of July 2013, QUITPLAN® Services received 256 percent more calls than in the first two weeks in July 2012, and saw a 289 percent increase in visits to quitplan.com.”

Long term, ClearWay projects that the tobacco tax increase enacted in 2013 will lead to a 47,800 reduction in the number of children who become addicted, a 16 percent reduction in youth smoking rates, incentivize 36,600 Minnesotans to quit smoking, and a 25,700 reduction in premature smoking related deaths.

A reduction in tobacco usage was incorporated into projections of how much revenue the 2013 tobacco tax increase would generate. As a result, the tobacco tax increase is generating about as much new revenue as it was expected to. According the most recent economic update from Minnesota Management & Budget, net tobacco tax collections are within three percent of their projected target since the tax increase took effect (through March 2014).

It is true that tobacco taxes are regressive, falling most heavily on low income households. However, the long-term health effects of the tobacco tax increase outweigh concerns over regressivity. After all, the positive health effects of the tobacco tax increase will likely be concentrated among low income smokers, since they are most sensitive to cigarette price increases and will be most incentivized to quit as a result. There are many ways we can change the tax code to help low income households; giving them access to cheap carcinogens should not be one of them.

http://www.mn2020hindsight.org/view/cigarette-tax-increase-succeeds-in-reducing-tobacco-usage

Faces of the Boom: Smoke shop angles for return customers

By Amy Dalrymple, Forum Communications
ALEXANDER, N.D. – New Yorker Phil Hamda came to North Dakota to scout for real estate opportunities, but his plans changed after paying nearly $8 for a pack of cigarettes in Williston.

Hamda, whose father owned tobacco shops in New York City, noticed that tobacco prices in the Bakken varied widely.

“In New York, if you don’t like the prices, there’s a store right next door,” Hamda said.

Instead of trying to develop housing, Hamda took lessons he learned from his father and opened the Tobacco Depot in Alexander in February. He says his niche is fair, consistent prices that earn him repeat customers.

“Everybody’s nuts about our prices,” Hamda said. “We’re not extortionists.”

He initially struggled to find retail space and planned to operate from a trailer in Watford City. But when that location didn’t work out, he discovered a space for rent along the heavily traveled U.S. Highway 85 in Alexander, between Williston and Watford City.

“You couldn’t ask for better visibility than this,” Hamda said as a steady stream of oilfield traffic goes by his shop.

The North Dakota Department of Transportation is constructing a bypass that will take Highway 85 traffic around Alexander. Hamda said he expects the bypass will actually help his business because the traffic is often so heavy that customers can’t get into his parking lot.

“A lot of guys say they’ve been trying to get in here for a week,” Hamda said.

Hamda said he wasn’t prepared for the demand for electronic cigarettes and personal vaporizers. They account for about half of his business, primarily because smoking isn’t allowed on many oilfield locations and housing camps where workers live, Hamda said. He also sells a lot of chewing tobacco and cigarettes by the carton.

Hamda, who spent 20 years self-employed as a contractor, was in the middle of developing two six-unit condominium buildings in Jersey City, N.J., when the recession hit. He still wants to finish the buildings, and his success in North Dakota will help him do that.

He plans to sell the buildings once they’re complete and make North Dakota his home.

“After I’m done with them, I’m bringing that money here,” said Hamda, who has plans to expand his tobacco business. “There’s plenty of opportunity out here and I think it’s safe to invest.”

http://www.inforum.com/content/faces-boom-smoke-shop-angles-return-customers-0

Letter: Time for state to update, increase tobacco taxes

By Jay Taylor, Durbin, ND

The state of North Dakota just recently unveiled newly designed license plates that will be used and distributed over the coming months/years.

The total cost to the taxpayers of North Dakota for this update was $7 million. The last time the license plate was changed was more than two decades ago.

During the 2013 legislative session, North Dakota lawmakers also passed a bill that increased fees for many hunting and fishing licenses. This legislation passed with overwhelming support from legislators, hunters and anglers. This was the first comprehensive license fee adjustment in nearly two decades.

Do you know what else in our state hasn’t been updated in the last two decades? The cost of tobacco products. One of the best ways to prevent young people from ever entering a life of addiction to tobacco —something nearly everyone (except the tobacco industry, of course) can agree is a good thing —is to make the product more expensive.

Does the North Dakota Legislature agree that our state’s tobacco tax of 44 cents per pack —the 46th lowest in the nation —is also outdated?

The effects of North Dakotans’ tobacco use also impacts the wallets of those who don’t use tobacco. North Dakota’s annual health care costs directly caused by smoking is $326 million. The portion covered by state Medicaid is $47 million.

As the price of tobacco increases, more people quit and fewer young people start the addiction.

If it was time to update our state’s license plates to the tune of $7 million and raise the fees on hunting and fishing at the expense of the taxpayers, I think it’s time to engage in the long-overdue discussion about the costs of cheap tobacco to the health of our state.

Jay Taylor, Durbin

http://www.thedickinsonpress.com/content/letter-time-state-update-increase-tobacco-taxes

 

Letter: N.D. needs a hefty tobacco-tax hike

By Brenda Jo Gillund from West Fargo, N.D.

WEST FARGO — My family and I have been really happy with North Dakota’s smoke-free indoor workplace law that passed in 2012. As a mother of young children, I feel very fortunate that young people today will have decreased exposure to secondhand smoke.

As my children get older, I worry about their exposure to marketing for tobacco products. I find it appalling that tobacco companies target their marekting to children, including enticing flavored tobacco products and colorful packaging.

We know that as we increase the price of tobacco, fewer children start smoking, and more smokers make the decision to quit.

With so many lives at stake, my question is this: Why don’t we make cigarettes more expensive so people — especially children and young adults — can really start to see how much their habits cost them?

When it hits us in the pocketbook, we start looking for a way to quit an addiction or decide never to start in the first place.

I’ve heard that North Dakota is one of the cheapest places to buy cigarettes. There’s something wrong with that, and I think it is time for action.

Gillund is a registered nurse. 

http://www.grandforksherald.com/content/nd-needs-hefty-tobacco-tax-hike

Letter to the Editor: The issue with smoking is addiction, not freedom

I am writing in response to the Herald’s editorial on tobacco use in Grand Forks parks (“Too much loss for too little gain,” Page F1, June 1).

Tobacco prevention policies have, throughout history, always been met with some resistance. Tobacco use was so common when I was a child that it was normal to see smokers in grocery stores, movie theaters, school classrooms, teacher’s lounges, doctors’ offices, airplanes, airports and hospital rooms.

Each of those changes was met with the attitude that it was beyond the pale to even consider making changes. But today, it would seem unusual to see someone smoking in their hospital room or at a movie theater.

Tobacco use rates were high, and we all paid the price of the damage tobacco use does to the human body by way of health care costs, Medicaid costs, loss of productivity and sadly, early deaths of loved ones.

As a result of sound evidence-based practices, such as 1) preventing initiation among youth and young adults, 2) promoting quitting among adults and youth, 3) eliminating exposure to secondhand smoke and 4) identifying and eliminating tobacco-related disparities among population groups, headway has been made in reducing tobacco-use rates. But there still is work to be done.

Grand Forks Park District Commissioner Molly Soeby’s column put it well: “Tobacco use kills more people than AIDS, alcohol, car accidents, illegal drugs, murders and suicides combined” (“For health’s sake, Grand Forks parks should ban tobacco use,” Page F1, June 1).

“It is the No. 1 cause of preventable death in our country. Young people in North Dakota use tobacco more than the national averages. They smoke at higher rates (19.4 percent vs. 18.1 percent), and they use more chewing tobacco than adults (13.6 percent vs. 8.2 percent).”

Tobacco use kills about 480,000 people each and every year in the United States. That equals the number of American deaths in all the U.S. wars since the American Revolution, every 2½ years.

So, what can be done to improve these numbers? What does the research show us works?

The Centers for Disease Control recommends creating tobacco-free social norms through the use of “increasing the unit price of tobacco products, sustaining anti-tobacco media campaigns and making environments smoke-free.”

Tobacco-free parks policies are part of a comprehensive combination of strategies to get our youth tobacco use rates lowered.

Tobacco-free parks policies will keep young people from ever starting. The research is done, the evidence is clear. According to the CDC, comprehensive tobacco-free policies prevent young people from seeing tobacco use as a normal adult activity and show a significant effect on reducing tobacco use initiation among youth.

Our community would not be the first to adopt a tobacco-free parks policy. North Dakota currently has 12 communities with tobacco-free parks, and Minnesota has more than 150.

According to the editorial, “secondhand smoke in indoor areas is a health hazard; secondhand smoke in parks in inconsequential.”

But it’s not about secondhand smoke, which, by the way, many people consider a nuisance that interferes with their personal enjoyment of the parks. It is about what we know will work to keep young people from starting to use tobacco.

The editorial says that this is not a good enough reason to “clamp down on personal freedom.”

But this is not a personal freedom issue, either. Tobacco use is an addiction, and most adult tobacco users report that they started using before age 18.

A policy such at this will not prohibit anyone from using tobacco. It will help to keep children, who do not use tobacco, from starting.

That is a public health issue, not a personal freedom issue.

Recent studies in Grand Forks show overwhelming support in the community for the adoption of tobacco-free policies on all of our Park District properties. (The community-wide study is available on www.tobaccobytes.com)

Tobacco-free parks policies are cost effective. They’re good for the health of North Dakotans now and, as Soeby put it, “for future generations of residents of Grand Forks.”

Knox coordinates the tobacco prevention program for the Grand Forks Public Health Department.

http://www.grandforksherald.com/content/theresa-knox-issue-smoking-addiction-not-freedom

AMA, Doctor Allies Push CVS Rivals To End Tobacco Sales

The American Medical Association and allied physician groups this week are exacting added pressure on pharmacies and others that sell health products to join CVS’ move to cease peddling cigarettes and other tobacco products.

Earlier this year, CVS grabbed international kudos that included acclaim from the White House for the giant pharmacy chain’s decision to stop selling cigarettes and other tobacco products in all of its more than 7,600 stores by October 1, according to its parent company, CVS/Caremark (CVS).

Public health advocates said CVS’ move was particularly notable given its drugstores would be sacrificing $2 billion in annual sales for public health and future growth.

Now, the largest doctor group in the U.S. and affiliated state and national medical societies are voicing a more unified chorus against retail sales of tobacco products at the AMA’s annual policy-making House of Delegates meeting that runs through Tuesday in Chicago.

Several doctor groups said Sunday that they want the AMA to push pharmacies and “providers of health services and products” to stop-selling cigarettes and tobacco products or work to pressure them to limit sales of such products. An AMA reference committee Sunday considered two resolutions urging the organization to step up the pressure on pharmacies and other retailers.

The American College of Cardiology, for example, said even limiting tobacco has led to its reduced use.

“We urge retailers that sell health related products to follow the example set by CVS Caremark CVS +0.38% and discontinue the sale of all tobacco products,” said Dr. L. Samuel Wann, an AMA delegate representing the American College of Cardiology. “Selling both prescription medicines and cigarettes in the same store is hypocritical. Large pharmacy chains that continue to sell cigarettes appear irresponsible to society. The ACC supports all possible action to reduce tobacco access and use, especially when it comes to our nation’s youth.”

The resolutions before the AMA didn’t name retailers specifically. CVS rivals Wal-Mart (WMT) and Walgreen WAG -0.75% (WAG) continue to sell tobacco products.

The AMA reference committee ultimately reaffirmed the organization’s existing policy which opposes “the sale of tobacco at any facility where health services are provided.” 

The AMA’s annual House of Delegates’ meeting serves as more of a bully pulpit for health issues than anything.

“The power of the AMA is in its role as a single umbrella organization that covers all physicians, across specialty, geography, practice type or career stage,” Dr. Robert Wah, the incoming AMA president, said in a statement at the meeting’s open. “We have the ability to convene all the parties that need to come to the table to work on solutions to the challenges physicians face today. It’s the bringing together of different perspectives that makes the organization stronger.”

http://www.forbes.com/sites/brucejapsen/2014/06/08/ama-doctor-allies-push-cvs-rivals-to-end-tobacco-sales/

Andrew Knight: Extend to parks the push to reduce smoking

By Andrew Knight, Grand Forks Herald

Smoking should be allowed in Grand Forks parks because banning it “clamps down on personal freedom?” (“Too much cost for too little gain,” editorial, Page F1, June 1)

Is the argument really about progress vs. freedom?

The Herald’s “ThreeSixty” opinion section on June 1 includes the phrases “enjoy a cigarette on a park bench,” “cigarette smoke smells like roses,” and that a “(smoking) ban is ‘pointless’ from a traditional perspective.” It felt more like an opinion section from the 1960s.

Grand Forks Park District Commissioner Molly Soeby expertly lays out the issues with several pieces of evidence for this ban, and then non-local public policy wonks (Dennis Prager et al.) are trotted out as the counterpoint, with nary a point made specific to smoking in parks.

Soeby explains 78 percent of the Grand Forks community and 82 percent of golfers and softball managers are for a comprehensive tobacco-free policy. Even with sampling error, we can discern a clear majority opinion here.

How then, does Grand Forks City Council President Hal Gershman think the ban would be “very unpopular?” (“Banning smoking in parks a ‘needless intrusion,’” letter, Page A4, June 4).

This isn’t to say that I don’t expect a small but vocal backlash from the “hey, freedom!” crowd.

The supposed “counter” to Soeby’s arguments and statistics is a smattering of excerpts on the topic of smoking, starting with Simon Chapman from Australia (yes, Australia). Chapman compares car exhaust to secondhand smoke because we breathe in benzene from both sources. There are a LOT of car owners and not nearly as many smokers. How much benzene shoots out of exhausts in cars versus a single cigarette?

This argument fails because he’s using two different scales.

Chapman finishes the tortured analogy saying “we hear no serious calls for the banning of cars.” First, no one is calling for banning cigarettes; it’s about reducing smoking.

Second, there is substantial market pressure on car companies to reduce emissions. Science told us vehicle emissions are pretty bad, so we are trying hard to reduce them. Science also told us smoking is bad, so that’s why the push to reduce places where smoking is allowed needs to continue to parks and other public places.

The slippery slope fallacy continued with an excerpt from a New York Times editorial (from three years ago) to that city’s smoking ban, comparing it outright to alcohol prohibition 90 years ago. If we ban smoking in parks, it may lead to “a civic disaster,” according to the writer.

If this is the best group of arguments to keep smoking legal in parks, maybe it means there are few, if any, locals willing to write against the ban (in which case, kudos to Gershman and the Herald’s editorial board for being lone wolves on this minority opinion).

You have freedom to smoke on your property, in your car, while you walk around town and so on. You have freedom to do a LOT of things in your own home that you cannot do in a park because many of us believe it is better not to expose nature, playgrounds and children to it.

Add smoking to the list. We don’t want children to see adults smoking, feel cigarette butts in their toes or smell the cigarette smoke. Leave the cigarettes in the car for a round of golf or a volleyball match.

Soon my family is moving to Colorado — a state with acres ravaged by fires in recent years. Herald readers can probably understand that the residents there are skittish about smoking in places such as parks and playgrounds, and therefore have enacted smoking bans.

Like people in Grand Forks, they have natural beauty worth preserving, would prefer not seeing people “enjoying a cigarette on a park bench” and don’t want to take the chance that an errant cigarette butt could take down a forest range.

We’re packing up for the move and are already missing people we’ve befriended here, but we won’t miss the overly cautious, conservative approach to environmental protections.

This is not a simple false choice of progress or freedom. The Park Board should feel very confident moving forward in enacting this policy.

And to the Herald editorial board: Yes, the benefits are more than worth the costs.

Knight is an assistant professor in the music department at UND. 

http://www.grandforksherald.com/content/andrew-knight-extend-parks-push-reduce-smoking