November 09, 2009 -
Imagine for a moment, your stores' back bars and tobacco sections as they are today. Now remove all flavored SKUs -- the Black & Mild Wine and Cream cigars, the grape and peach Swisher Sweets, the coffee little cigars and the wintergreen moist snuff. How much revenue would you lose if this were to happen, not even counting the ancillary purchases that come with these items? And for a moment, remove menthol items from the racks as well. The tobacco category becomes barren.
Ask yourself this -- can the stores survive without these products, and the traffic and sales they bring in? Unless the stores have a stellar foodservice offer, the answer is most likely no.
If the convenience industry allows the FDA to push its limits on a recently enacted law, it may be the end of the important category -- at least as we know it today.
On Sept. 22, flavored cigarettes and their component parts (rolling papers, loose tobacco, filters, etc.) became illegal. For some c-store retailers such as Kum & Go, it was not a big change -- the four clove SKUs in distribution in some of its stores were replaced with new products, so the chain could continue to have a product that met the wants of those customers, said Jodi Benson, category manager for the West Des Moines, Iowa-based chain. No promotions to move the clove cigarette product out of inventory were necessary ahead of the ban, as it sold on its own, she noted.
Most of the regulation relating to the flavored cigarette ban was straightforward, except for the part where the FDA stated the ban also affects tobacco products "even if they are not labeled as 'cigarettes' or are labeled as cigars or as some other product."
It is this phrase that threatens to open the gates for the FDA to ban all types of flavored tobacco items. Little cigars appear to be immune from the ban at this time; however, the FDA stated it will look into them on a case-by-case basis, and issued letters to two tobacco distributors, Kretek Intl. and Cheyenne Intl., asking for information regarding the marketing of their small cigar products since the ban, and Kretek has sought an injunction to permanently prevent the FDA from classifying its cigars as cigarettes.
It is one small step from banning flavored cigarettes to banning flavored little cigars -- after all, little cigars come in a variety of flavors already banned from cigarettes, including peach and vanilla, mint, rum and even pina colada. And the lack of clarity from the FDA should be a warning shot to the industry that something bigger may be in store. I wouldn't doubt the FDA, after banning little cigars, will then begin down the slippery slope to banning flavored cigar wraps and large cigars, and any other tobacco product with added flavors.
The one tobacco flavoring that may be exempt from the flavor ban is menthol. And despite whatever results come from the studies that are planned to investigate its effects and impact on smoking rates, menthol's existence in the future is really in the hands of the lobbyists, and whether the tobacco firms can outfight the health organizations.
The fate of all the flavored tobacco items in your stores is in your hands. Help the efforts of NACS, NATO, and other tobacco groups and manufacturers. Help elect lawmakers who stand for free enterprise and against the nanny-state. Inform your customers of impending legislation and its impact. It is imperative the industry does not let the FDA put a chokehold on the tobacco category in convenience stores.
RSS
By Mehgan Belanger
