Under the Thumb
Even for a retail channel beset with probably the highest degree of government regulation of any other retailer, the amount of federal, state and local interference in the way convenience stores sell tobacco products has reached an all-time high.
That’s not to say the heat is off such issues as labor, energy, alcohol and food regulation. But, of the top 10 legislative and regulatory articles last year on CSNews.com, eight were about tobacco, e-cigarette or vape product regulation.
And our just completed 2020 Forecast Study (published in our January 2020 issue) reported that c-store retailers anticipate tobacco and e-cigarette regulation having the second biggest impact on their sales and profits this year, after motor fuel prices.
While the Trump administration has been a breath of fresh air when it comes to reducing federal regulation on most businesses (it’s been reported that approximately five regulations have been eliminated for every one new regulation created), this anti-regulation trend hasn’t applied to the tobacco industry. Just last month, the Food and Drug Administration announced a ban on flavored e-cigarette and vapor cartridges, with the exception of menthol and tobacco flavored products. President Trump also signed a new spending package that prohibits the sale of cigarettes and e-cigarettes to anyone under the age of 21.
No wonder c-store retailers are concerned about the future of the highest sales-producing category within their stores. Cigarettes and other tobacco products (including e-cigs and vape) represent more than a third of in-store sales, according to the 2019 Convenience Store News Industry Report.
A Gallup poll conducted late last year found that Americans are expressing slightly greater support for a more activist government. Since 2010, the percentage of Americans saying government should do more to solve the country’s problems has increased 11 percentage points, to 47 percent, and the percentage wanting government to take active steps to improve people’s lives is up eight points, to 42 percent. So, the momentum is clearly in favor of more regulation at the federal, state and local levels.
A degree of government regulation is needed and expected, especially for a product with the health risks associated with tobacco and cigarettes. Unfortunately, our government and media are portraying e-cigarettes and vape products as a health crisis based on a relatively low number of health incidents. E-cigs let people consume nicotine without burning tobacco. They aren’t without their risks, but scientists say they are far less harmful than smoking. If more smokers switched to e-cigs, millions of lives would be saved.
This is a message convenience industry retailers need to tell to their federal, state and local government representatives.