Obama Win Could Trigger Regulatory Changes for Tobacco, Beverages

NEW YORK -- In less than five weeks, the country will finally get an answer to the most important question of 2012: Will President Barack Obama get another four years, or will Republican challenger Mitt Romney move into the White House in January?

While many Americans may think the outcome won't make much of a difference, a new Wells Fargo Securities LLC research report entitled "Election 2012 -- A Race to the Finish" takes an in-depth look at the possible outcomes of the presidential race and their impact on several sectors, including those that directly affect the convenience store industry.

According to Bonnie Herzog, managing director of beverage, tobacco and consumer research at Wells Fargo Securities, a win by Obama could be a headwind for the tobacco and beverage sectors.

Tobacco consumption could be negatively impacted if President Obama wins another four-year term, Herzog said, explaining that a Democratic win may trigger increased regulatory controls and increased excise taxes. Conversely, she noted, a Republican win could be marginally beneficial for tobacco companies.

Herzog painted a similar picture for the beverage sector. A win by President Obama may lead to two negatives: a change in the overall regulatory environment on beverages -- like the recently enacted ban on 16-ounce sugary drinks in New York City -- and a greater likelihood of higher consumption taxes, she said.

Like in the tobacco sector, a Republican win could be marginally beneficial for the beverage sector, as Romney would likely leave current taxes in place, according to Herzog.