Retailers feel the heat over tobacco sales

The pressure is on some of the nation's top retailing names to quit selling tobacco products, which now bring in billions of dollars in revenue. No. 1 retailer Wal-Mart (WMT), along with Walgreen (WAG) and Rite-Aid (RAD), two of the largest pharmacy chains, and top grocery store operators Kroger (KR) and Safeway (SWY) are feeling the heat from state attorneys general and public health advocates.

The request this week by a coalition of more than two dozen attorneys general led by New York's Eric Schneiderman and Ohio's Michael DeWine comes about a month after CVS Caremark (CVS) announced that it would stop carrying tobacco products on April 1.

"Pharmacies and drug stores, which increasingly market themselves as a source for community health care, send a mixed message by continuing to sell deadly tobacco products," said Schneiderman in a press release issued Monday. He urged the companies to "do the right thing and remove tobacco products from store shelves."

Officials at Wal-Mart, Safeway and Rite-Aid said they were crafting a response to the letter, and they declined to comment further. Walgreen, the largest pharmacy chain, and Kroger, the largest grocer, didn't respond to a request for comment. How much leeway the attorneys general have in restricting the sale of an otherwise legal product isn't clear.

According to data from the Center for Global Tobacco Control cited by the Los Angeles Times, pharmacies accounted for less than 5% of cigarette sales in 2009, although they're on the rise. Most cigarette sales occur in convenience stores, the paper noted.

Roughly 44 million adults in the U.S. smoke, about the same number as did 50 years ago when the first U.S. Surgeon General report linking smoking to health problems was released. Since the U.S. population has grown considerably since then, the percentage of the American public who smoke has fallen. Data from the Centers for Disease Control and Prevention indicate that 293 billion cigarettes were purchased in the U.S. in 2011.

The American Lung Association and other health advocates have become alarmed at the growing popularity of cigars and e-cigarettes among young people. Youth smoking rates, which had declined for years, have lately plateaued.

Erika Sward, vice president for national advocacy at the American Lung Association, notes that smoking remains the country's top cause of preventable death. The costs of smoking-related illnesses are estimated at $333 billion annually.

"This issue of retailers (selling tobacco products), especially those with pharmacies has gotten a great deal of attention and discussion because of CVS' leadership," she said.

CVS never sold e-cigarettes, which their backers argue are healthier alternatives to smokes, but may retailers carry the products. According to Sward, there's no evidence that e-cigarettes can help people quit conventional smokes. The Lung Association has called on the Food and Drug Administration to crack down on companies making claims that e-cigarettes help break the smoking habit.

"Ultimately, e-cigarettes are a tobacco product and will be regulated as tobacco product," she said. "Tobacco products are guilty until proven innocent."

Nonetheless, sales of e-cigarettes, which provide a nicotine fix through a vapor pipe, are expected to top $3 billion next year. As Reuters and others have noted, industry lobbyists are trying to prevent the imposition of stringent regulations.

  • Jonathan Berr

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