Battleground of Tobacco Regulation Remains Local

ORLANDO, Fla. — Just six weeks into 2017 and tobacco legislation proposals continue to dominate local and state agendas across the country. 

"Local ordinances are probably the greatest threat to the industry," according to Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO). In fact, each year, the number of proposed ordinances and the severity of those ordinances increase, he noted.

Briant provided an update on tobacco legislation during the Convenience Distribution Association's (CDA) Convenience Distribution Marketplace 2017 event, which took place this week in Orlando.

While much of the legislative activity swirling around local municipalities is concentrated in three states — California, Massachusetts and Minnesota — tobacco regulation is not limited to those three states, and rather is spreading throughout the country.

As Briant explained, one of the major focuses of tobacco regulation currently is a call for flavor bans. Flavored cigarettes have been banned by the Food and Drug Administration (FDA) since the early days of The Family Smoking Prevention and Tobacco Control Act of 2009; however, flavors have not been banned in other tobacco products (OTP) at the federal level. Notably, the FDA's final deeming rule — which went into effect Aug. 8 — did not address flavors for other products such as electronic cigarettes and cigars. But the deeming rule is just a foundational step for future federal regulations.

The push for flavor bans has picked up steam at the local level in Massachusetts, California, Minnesota, New York, New Jersey and Rhode Island.

In addition to taking aim at flavors, local lawmakers are targeting minimum package size for cigars, and cigarette and OTP taxes, Briant reported.

An additional threat to tobacco retailers is the limits on the number of retail licenses that some municipalities are putting in place. In some cases, the number of licenses is less than the number of stores selling tobacco, effectively leaving some retailers out in the cold.

The Tobacco 21 push, which advocates for increasing the legal minimum age to buy tobacco products to 21, is gaining traction in many local communities, too. However, to date, only Hawaii and California have enacted statewide legislation.

To help fight the patchwork of local legislation, Briant advises retailers, wholesalers and distributors to get to know their local officials, invite them to visit their warehouse or store, explain to lawmakers the tobacco business model, and engage employees and customers.

"If tobacco sales go away, it will be hard for convenience stores to make up those dollars," the NATO executive director said, noting that the shift by anti-tobacco advocates has occurred over the past five years. 

Many anti-tobacco efforts are framed as an attempt to keep tobacco products out of the hands of underage consumers. However, Briant cited a recent study, which found that up to 80 percent of youths rely on social sources — older siblings, parents, strangers — to obtain tobacco products. The irony, he said, is that if flavor bans and other restrictions are put in place, lawmakers are not solving the problem. 

"If the problem is social sources, then we need to focus our efforts on social sources; not banning the sale of a legal product," he explained.

2016 vs. 2017

Looking at the legislative landscape across the United States, Briant pointed out that in 2016, 21 states had bills proposed to raise cigarette/tobacco taxes. In the end, only four states adopted higher levies: California, Louisiana, Pennsylvania and West Virginia.

Last year was an election year, he pointed out, and generally elected officials do not vote to raise taxes during elections.

2017 could be a different story. To date, 11 states have already introduced bills to hike cigarette/tobacco taxes this year. And as for e-cigarettes, six states have taxes on the segment going into effect in 2017, and so far seven more states have proposed similar levies.

Additionally, 14 states already have measures on the table to increase the legal minimum buying age this year. North Dakota just recently rejected the move, Briant said.

The 2017 Convenience Distribution Marketplace began Feb. 13 and wrapped up Feb. 15 at the Hilton Orlando. The annual event is designed uniquely to bring convenience distributors together with their supplier partners in a flexible business and networking environment.

The Convenience Distribution Association, formerly AWMA, is the trade organization working on behalf of convenience products distributors in the United States. Its distributor members represent more than $92 billion in U.S convenience product sales, serving a wide variety of small retail formats. Associate members include leading convenience product manufacturers, brokers, retailers, suppliers and others allied to the industry.