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Wednesday, March 20, 2013 - Page updated at 05:30 a.m.
NYC looks to bump tobacco from prime retail space
By DAVID B. CARUSO and JENNIFER PELTZ
Walk into any convenience store or gas station in the country, and chances are the cigarettes will be in roughly the same spot: at eye level, right behind the cash register.
That's no coincidence. Tobacco companies have worked hard, and paid handsomely, to ensure that cigarette displays occupy the retail equivalent of prime real estate. In 2010 alone, the industry made $370 million in payments to retailers to help lock down prime shelving space, according to a report last year by the Federal Trade Commission. It spent an additional $107 million on in-store advertising.
"Every consumer-product goods manufacturer in the country wants to be there," said Kurt M. Ribisl, a professor at the University of North Carolina who studies tobacco marketing. "People making chips and Doritos and Pepsi - all of these companies want that space. But the tobacco industry wins."
Now, that supremacy could be in jeopardy in one of the nation's biggest cigarette markets.
New York City Mayor Michael Bloomberg proposed a bill this week that would force retailers to keep cigarettes out of public view until a customer asks for a pack.
The rule would effectively require merchants to keep tobacco products in closed cabinets or drawers, rather than on the colorful displays, dubbed "power walls," that are familiar just about everywhere in the U.S.
A second bill would take aim at the system of discounts and incentives that manufacturers have long used to woo retail customers and keep merchants happy. It would ban coupons and buy-one-get-one-free promotions for tobacco products and eliminate deep discounts by creating a price floor for each pack.
It is too early to tell whether either measure will survive the legislative process or an almost-certain court challenge. Tobacco companies and convenience store owners have assailed both proposals as unfair and maybe unconstitutional. An industry lawsuit forced the New York village of Haverstraw to quickly rescind a similar ban enacted last April. The city of Providence, R.I., was sued over an anti-coupon ordinance, much like the one proposed in New York.
Even more unclear is whether the policy would actually lead to fewer people smoking.
A number of nations, including Ireland, Canada and Australia, have restricted retail tobacco displays, but most experts say the policies haven't been in place long enough to know whether they have had a strong impact.
Big immediate drops in sales are unlikely, said Ribisl, who favors tighter restriction on tobacco marketing. But he predicted that the display rules - and especially the new prohibitions on discounts and coupons - might lead to a modest reduction in smoking rates over time.
An FTC report last year said the industry gave $6.49 billion worth of price discounts to cigarette retailers and wholesalers in 2010.
"When you stop discounting and multipack specials, you are now thwarting the tobacco industry's ability to prey on low-income smokers," Ribisl said.
Scientists at the nonprofit research firm RTI International recently published the results of an experiment in which they had 1,200 young people take virtual shopping trips through computerized convenience stories. It found that kids were less likely to make fantasy purchases of cigarettes in shops where tobacco products were hidden in cabinets.
It is hard to say whether that type of simulation would repeat itself in real life, said Annice Kim, a social scientist who was involved in the project. But she said that one theory is that simply making a product less visible makes people less likely to make an impulse buy.
The New York supermarket chain Price Choppers decided on its own in 2006 to move its cigarette stocks off regular shelves and into closed cabinets that resemble refrigerator cases with frosted glass.
"We made a commitment not to entice the next generation of smokers," said company spokeswoman Mona Golub. "We visually muted the cases, so as not to entice kids."
Since then, sales have indeed declined, but she said the company doesn't know whether that is due to customers going elsewhere for their fix or maybe quitting because of other factors, such as a subsequent big increase in the state cigarette tax.
Some smokers familiar with New York City's proposed plan said they found it hard to believe it would make a difference.
Talking about the ban on a smoking break, Jonathan Davies, 24, and Roman Gayaram, 22, said they both started out filching cigarettes from their parents - and didn't start buying them in stores until later. Srujan Poshala, 27, an office worker on a cigarette break outside his midtown Manhattan office, noted that young people are exposed to smoking in many other ways.
"What big difference does it make?" he asked. "It's on magazine covers and everywhere. People smoke in movies."
City health officials have said that obscuring cigarettes at the point of sale might lead to fewer impulse buys by addicts trying to quit. That logic appealed to smoker Demian Menezes, 37, who said the visibility of packs at stores was indeed a temptation during a two-year period when he quit.
"You always have that `Oh, my God - it's right there'... `Pick me! Buy me! Smoke me!'" feeling, he said.
Like most of the other anti-smoking campaigns of recent decades, though, the primary goal of the display restrictions seems to be to send the message that smoking is simply no longer an acceptable social behavior but rather something to be hidden and shunned.
Opponents of the measure say it will only hassle smokers unnecessarily and make things more difficult for small businesses.
Tom Briant, executive director of the National Association of Tobacco Outlets, said it would cost around $2,500 for the average business to buy the display cases needed to comply with the law.
"It puts a lot of question marks on how you sell one of your major categories," said Jeff Lenard, a vice president at the National Association of Convenience Stores. "It's not an easy time to be in business right now."
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