Action on Smoking and Health A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions    Search  | Info About  | ash.org | To Join |  Email Page To Comment or Read Other Members' Comments, Click Here

Excerpts from: Tobacco Shops. . . grow in popularity in Maine

By COLIN HICKEY, Tobacco Shops  [08/19/01]
 

                  In a state that in October will increase its per-pack tax on cigarettes to
                  $1, opening stores that cater to smokers may seem like a questionable
                  business decision.

                  Tax-revenue numbers, moreover, confirm that cigarette sales in the state
                  have declined 16 percent since 1997, the year the state raised the tax to
                  74 cents from 37 cents a pack.

                  But Alan Decker, president of Bangor-based Reid's Confectionery,
                  which owns 21 Cigaret Shoppers in Maine, said his stores are doing well
                  and points to tax increases as one of the reasons.

                  Such hikes, he said, have led directly to the rise of stores that specialize
                  in tobacco and use discounts to generate high-volume sales. Decker
                  opened his first store just nine years ago.

                  "Normally speaking, a tax increase helps us because our lower margins
                  help defray the tax," he said.

                  Sharon Cohen, of Waterville, makes no mention of defraying taxes. She
                  said she goes to Maine Smoke Shop to save money on the tobacco she
                  buys by the bag, which she rolls with a special tobacco-rolling machine
                  at her home.

                  "I buy a bag of tobacco here for $10," she said. "I pay $30 to $40 at
                  other places."

                  Other customers also said they go to smoke shops because of the lower
                  prices. One man said he can purchase a carton of Marlboro cigarettes
                  for $5 cheaper than at the local big-box discount store.

                  That net effect is that while total cigarettes sales have declined in Maine,
                  tobacco shops are gaining an ever greater share of sales.

                  The proliferation of tobacco-centered shops, Decker said, is not a local
                  phenomenon. It is a national trend.

                  "There is even a National Association of Tobacco-Only — NATO —
                  stores that formed in March or April of last year," he said.

                  Decker said along with discounted prices, Cigaret Shopper and like
                  businesses offer customers greater convenience than convenience stores,
                  which deal with a wider spectrum of people and products.

                  In a Cigaret Shopper, customers do not have to wait behind the man
                  paying for gas nor the child buying a pack of baseball cards.

                  Maine Smoke Shop and Cigaret Shopper both have signs in their
                  windows that state the store is for adults only. Decker said that
                  restriction allows tobacco-only stores to operate on a serve-yourself
                  basis — no need to ask the clerk to reach for a carton of Camel or
                  Newport cigarettes.

                  Beth O'Connor, manager of Cigaret Shopper in Augusta, said her store,
                  which is in a densely populated neighborhood, attracts a great deal of
                  people who find it difficult to get to supermarkets and big-box discount
                  outlets.

                  "I think it is convenient to come here for people up here who don't have
                  vehicles, and we offer good deals (on tobacco products)," she said.

                  Dr. Dora Ann Mills, director of the state's Bureau of Health, said
                  tobacco-only stores are another example of the tobacco industry's
                  innovative marketing ability.

                  "We are up against an industry that hires the best and the brightest
                  marketing people. They are devious and they are brilliant," she said.

                  "We counter their strategy, and every time we turn around, they counter
                  our strategy with something that is absolutely brilliant."

                  Maine, too, continues to rank as a state with one of the highest
                  percentages of young adult smokers (ages 18-30) in the country at 32
                  percent.

                  Michael J. Allen, director of economic research for the state's taxation
                  office, said even the apparent decrease in smokers since 1997 must be
                  qualified.

                  The 16 percent reduction, he said, is based on sales tax revenue, not
                  research data on smokers.

                  "People could be going to New Hampshire to purchase cigarettes," Allen
                  said. "People could be purchasing them over the Internet. People could
                  be rolling their own."

                  Decker argues smokers are less sensitive to prices than are average
                  consumers. Raise the tax on cigarettes, he said, and they will continue to
                  puff.

                  "I think there is a demographic of people who — whatever the state or
                  federal government want to mandate as far as taxation —see smoking as
                  a matter of choice," he said.