SCHIP and Tobacco: Nails in the Coffin? (retail convienience stores)

[DJ13]

March 8, 2009

NEW YORK -- While the regulations surrounding the April 1 increase of the federal excise tax (FET) on tobacco are unknown as of press time, the impact it will have on the tobacco industry is clear to many convenience store retailers and advocates, who indicated this law -- on top of the crumbling economy and slumped consumer spending -- could spell the end for those retailers already struggling due to the recession or those dependent on tobacco as traffic and profit drivers.

"This is certainly going to affect tobacco sales volume. April and May will really tell the story, and it will be tough going into the summer months when tobacco consumption increases," said Mary Szarmach, vice president of trade marketing for Smoker Friendly, who anticipated an 8 to 10 percent decline in consumption as a result of the new FET rates.

The consumption decline estimated by the Congressional Budget Office and the U.S. Treasury is similar, with at least a 10 percent decline in sales of cigarettes and tobacco products, according to Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO). He added: "Convenience stores should prepare for this significant sales decline."

In addition, many existing problems in the convenience channel will be exacerbated when the new FET rates go into effect, according to an editorial letter written by Tony Miller, senior vice president of sales and marketing for Thorntons Inc., and obtained by CSNews Online earlier this month. Given that cigarettes represent 30 to 45 percent of convenience store inside sales, he wrote, the deterioration of the category will have devastating consequences......

http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1003946162

[Egnever]

1. So?

[DJ13]

2. Jobs

Also the SCHIP program's funding was based on few people quitting, while the experts in the retail channel are estimating a 10% reduction in sales.

You do the math.

[napi21]

3. I think they're generating a black market. Stupid IMO.

'm not going to quit smoking nor are most hard core smokers. I will find an alternative method of purchasing. If that's what you really want, knock yourself out.

[RoyGBiv]

5. Already alive and running well ...

Estimates of black market activity in tobacco sales skyrocketed after the last major tax increase, and it's bringing all the things with it that prohibitions and exorbitant "sin" taxes have brought with other products throughout history.

[moundsview]

7. I'm used to my Mexican smokes already

we pick them up when we go down for our prescriptions and dental work. In an emergency there is always the reservation smoke shops.

[RoyGBiv]

4. This will kill Mom & Pop stores ...

... the ones that are left anyway. It'll also kill the privately owned franchise stores, of which there are many.

The large chains will survive, but they'll reduce their workforce significantly. Smokes and beer are the main reasons these things exist at all.

I'll leave it to others to decide whether this is a good or bad thing overall in the long term. Frankly the "convenience store culture" is not something of which I've been a fan, but that culture did employ me for quite a good bit of my life and got me through college. The timing of this happens to be bad, of that I'm certain. The industry as a whole might be able to absorb it better if the larger economy weren't in the tank already. In any case, it's going to hurt more people than it helps in the short term.

[glowing]

6. The tax should have come from wealthier persons, not sin tax. It does seem like

a silly notion to support children's health off the back of hoping addicted smoker's will continue feeding their habit... Its as wonderful as using a tax on gas to pay for roads.. as people drove less, states and feds lost revenue for roads projects.

[onehandle]

8. The result of tobacco use is a Huge burden on states.

Tax the Hell out of it.

[1]

9. fuck 'um. we all know tobacco is bad. fuck 'um.

[blues90]

10. well that's a great attitude

You may not be one who is addicted to the damn things so lets tax something you are and then come back and see what you have to say.

I smoke and i don't promote it but it is the most difficult thing to break free of. But now I will be forced to quit at these prices and I buy the cheap no name brand at a rite aid drug store. I have been cutting back more and more just don't run into me on a bad day with some mindless comment like this one.

You have children, if so sorry I won't be contributing simply because I have been priced out of the market as many more will.

Lots of the shit sold out there is bad like fast food ,why not tax the hell out of that , that sounds like a sin tax if I ever saw one.

[1]

11. it is the prevailing attitude...

fuck the smokers. a true progressive/liberal finds this tax totally acceptable to support this schip funding because it is a tax we will never have to pay. we don't smoke.

a true progressive/liberal loves taxes we don't ever have to pay, right? the best of all taxes!

fuck you smokers, pay the taxes and shoulder the entire burden of this fine program for the rest of us smug elitist shits. we love your efforts in paying for this, smokers, but the rest of us don't really want to actually step up and contribute a penny to the schip funding in any way ourselves.



that way, we can be all fine and good progressive/liberals. we got the schip passed. for the children, you know. without ever contributing a penny of our actual money to support it.

fuck the smokers.

fuck 'um...