The proposed ordinance also cites a recommendation contained in a report by the FDA’s Tobacco Product Scientific Advisory Committee that menthol cigarettes should be removed from the marketplace. Local lawmakers cannot and should not rely on this report to support passage of the flavored tobacco product sales ban.
In July 2014, the United States District Court for the District of Columbia ruled in a lawsuit filed against the FDA and the Tobacco Product Scientific Advisory Committee that members of the committee had conflicts of interest and that the findings and the recommendations of this report are “at a minimum, suspect, and, at worst, untrustworthy.” With this case now on appeal, it would be inappropriate for the city of Oakland to adopt a ban on menthol-flavored cigarettes and to rely on this report, even in part, to support adoption of the ordinance.
According to industry sales data, a complete ban on all flavored tobacco products, including menthol cigarettes, flavored cigars, pipe tobacco, electronic cigarettes and vapor products and flavored moist chewing tobacco, would result in the average convenience store located in Oakland losing $83,626 in annual net income on lost tobacco sales alone. The $83,626 in net income can make up a significant portion of a store’s annual profit because the business model for a convenience store relies on gasoline sales at the outside pumps, plus tobacco sales making up 36 percent of in-store sales.
This significant decline in net income will be exacerbated because of the loss of other product sales, including gasoline, snacks and beverages when adult customers simply drive a short distance to an adjacent city to buy their preferred tobacco products and make other purchases. These supplementary purchases of gasoline, snacks and beverages are very important revenue sources for a retail store to remain profitable. The severe impact on sales means that many family-owned retail stores would no longer remain profitable enough to remain in business.
This potential outcome is why local retailers need to become engaged in the public debate on these kinds of local ordinances to protect their right to sell tobacco products and the right of their legal-age customers to purchase tobacco products.
– Contributed by Thomas A. Briant, executive director
of the National Association of Tobacco Outlets (NATO)
This story first appeared in the July/August 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.
