At a Minimum

Each New Year’s Day, smokers across the country are used to digging a little deeper into their wallets as cigarette excise taxes typically go up as the ball goes down. Jan. 1, 2016, however, will see smokers and other tobacco users in Hawaii digging in their wallets for something else — their IDs.

With a stroke of his pen on June 19 of this year, Hawaii Gov. David Ige set the last state in the union on a course to be the first state to increase the legal age to buy tobacco to 21. The legislation prohibits the sale, purchase, possession or consumption of cigarettes, other tobacco products and electronic smoking devices to anyone under 21.

“Raising the minimum age as part of our comprehensive tobacco control efforts will help reduce tobacco use among our youth and increase the likelihood that our [children] will grow up tobacco-free,” Ige said at the time.

The first offense will result in a $10 fine. Later violations would lead to a $50 fine or mandatory community service.

The law takes effect Jan. 1, giving retailers in the Aloha State roughly six months to get their “tobacco house” in order, so to speak.

One such retailer prepping for the change is Aloha Petroleum Ltd., where training of sales associates and managers is a key focus, noted Gary Altman, general manager of company-operated stores.

“Beginning Jan. 1, 2016, customers under the age of 21 who have been purchasing tobacco products from us since they turned 18 will no longer be able to do so. How this is communicated and handled by our sales associates is crucial, as we don’t want to lose those customers’ business for non-tobacco items they purchase on a regular basis,” Altman said. “The key will be enforcing the new law while retaining the customers’ loyalty.”

Although the state has yet to provide any training materials or signage, Aloha (Petroleum anticipates that it will provide signage as the law comes into effect, according to Altman. Signs will play an important role when it comes to informing tobacco consumers about the switch. He believes the six-month lead time has been “reasonable” from a retailer standpoint, but he is not sure the average consumer is aware of the change.

While the tobacco category has been declining somewhat over the last few years, it is still an important part of Aloha Petroleum’s business and contributes more than 30 percent of in-store sales, Altman said, adding that many of the customers who purchase tobacco make other purchases in the store and visit its locations regularly. What effect, if any, the increase in the legal buying age has on those sales remains to be seen.

“We expect to see some sales decline in the tobacco category when the new law takes effect. The unknown for us at this point is whether it will impact other categories within the store,” he explained. “Will that 18-to 20-year-old consumer who currently makes legal tobacco purchases return to our store for the other in-store purchases they are currently buying from us, or will this change their shopping habits?”

A GROWING MOVEMENT

As it stands today, the federal minimum legal buying age for tobacco products is 18 years old — a standard followed by many state, county and local governments. Hawaii is the only state to hike the minimum age to 21, but it is by no means the only place requiring tobacco users to also be legal to drink alcohol.

New York City emerged as the leader in this movement when it increased its minimum age to 21 in 2013. Hawaii County in Hawaii followed suit, along with several municipalities across the country.

And the movement seems to be regaining steam these days. Bills were introduced this year in 12 state legislatures to raise the minimum legal age to purchase and use tobacco products, according to Thomas Briant, executive director of the National Association of Tobacco Outlets.

Oregon, Rhode Island, Utah, Vermont and Washington considered bills to raise the legal age to 21. These bills all died due to adjournment of the state legislative sessions. Measures to raise the legal age to 21 remain pending in California, Massachusetts, New Jersey and New York.

Other states have set their sights on age 19. Iowa and Texas both had bills to increase the legal age to 19; neither passed. New Jersey has had age 19 on the books for several years.

FEDERAL ACTION COMING?

State and local action, however, does not necessarily signal federal action. As Briant explained, the Food and Drug Administration (FDA) was required to submit to Congress a report regarding the public health impact of raising the legal age to purchase tobacco.

The agency sponsored a study conducted by the Institute of Medicine (IOM) to determine the public health impact of raising the legal age to 21 and 25.

In the report, a committee of experts reviewed existing literature on tobacco use initiation, developmental biology and psychology, and tobacco policy and predicted the likely public health outcomes of raising the age for tobacco products to 19, 21 and 25 years old.

The report found that increasing the minimum age of legal access (MLA) for tobacco products would likely prevent or delay initiation of tobacco use by adolescents and young adults. The age group most impacted would be those aged 15 to 17.

As a result of this review, the committee also concluded that the impact of raising the MLA to 21 would likely be substantially higher than raising it to 19. However, the added effect of raising the MLA from 21 to 25 would likely be considerably less.

“While the IOM report is often referenced on this topic, it’s important to highlight two key points,” explained David Bishop, managing partner of sales and marketing firm Balvor LLC. “The analysis was designed to look at the issue from a federal level, and the findings are projected based on some very broad assumptions. In other words, it would be inappropriate for someone to argue that these findings are applicable at the state level.”

COURT OF PUBLIC OPINION

The Centers for Disease Control and Prevention (CDC) followed with its own research, which found that three out of four adults — including seven in 10 cigarette smokers — favor boosting the legal purchasing age to 21. While an overwhelming majority of adults favor the policy, favorability is slightly higher among adults who never smoked and older adults.

In contrast, 11 percent of adults strongly oppose making 21 the legal age of sale, while 14 percent somewhat oppose such measures. “The CDC’s research in this case is intended to reinforce that this is a politically popular and safe action to pursue,” Bishop said.

The Campaign for Tobacco Free Kids (CFTFK) is also making a push to make it illegal to sell tobacco products to anyone under 21 years old. Part of the organization’s argument is the comparison to the minimum age to buy alcohol. By 1988, all 50 states had laws on the books putting the age at 21.

“It’s important to understand the context of the IOM report as the perceived benefits will likely not occur anywhere to that magnitude if at all,” Bishop said. “Unfortunately, the CDC research and even some arguments being promoted by the CFTFK may influence legislative actions.”

IMPACT OF A HIKE

Regardless of the research and data cited, Congress is the only entity that can increase the legal buying age at the federal level. Until that happens, if at all, retailers need to be concerned about their tobacco sales bottom line as a result of state and/or municipal actions.

Making it harder for adult consumers to legally purchase tobacco products on a state or municipal level could have the same effect as making it more expensive. Users won’t necessarily stop buying cigarettes or moist snuff, they will just buy them elsewhere.

“This is critical for retailers to understand as increases to the minimum age in a state could impact consumer demand in ways similar to when there’s an increase in the state excise tax,” Bishop said.