E-TOBACCO: Online Smokes Concern Legislators, Activists
Scores of Internet sites selling tobacco products at discounted prices threaten to undermine America's efforts to reduce smoking by raising the cost of cigarettes, the Scripps Howard News Service/Arkansas Democrat-Gazette reports. Some 70 internet "smokes-for-sale" sites have made their debut in the past six months, selling large volumes of cigarettes at deep discounts. In addition to discounts, anti-smoking advocates note that the online companies "promise to deliver [cigarettes] speedily and discreetly to the smoker's door," prompting concerns about teenage smoking and the potential loss of millions in tax revenues. "It's a huge business," said Gary Kirchner, a former tobacco industry executive who now operates an online cigarette sales and distribution business. Of the $50 billion domestic retail market for cigarettes, Web proprietors estimate that Internet sales could generate as much as 20% of revenues.
Undercutting Public Policy
The "mushrooming" of cigarette sites troubles anti-smoking activists, who note that Web cigarette sales could reverse recent public policy achievements on the war against tobacco. According to U.S. Agriculture Department statistics, a combination of increases in the manufacturer price and taxes levied by federal and state authorities resulted in a 6% drop in cigarette consumption nationwide. In California last year, a s tate tax increase of 50 cents per pack translated into a 30% drop in cigarette sales. "I'm afraid [Internet cigarette sales] could undermine all the work we've done," said Lon Conner, chair of the Coalition for a Tobacco Free Alabama. Federal, state and local officials also "lament the potential loss of tens of millions of dollars in tax revenue," citing that the online discounters operate from either low tobacco-tax states or American Indian reservations, where cigarettes are free of the federal excise tax. In either circumstance, Internet consumers are liberated from the sales tax of their home jurisdiction. Moreover, critics fear that low prices and minimal background checks -- typically a site statement that cigarette buyers must be over 18 -- may send "cash-strapped" teenagers flocking to the Web to get their fix.
Concerned about cigarette sales to minors, the attorneys general in 13 states -- Arizona, Arkansas, Florida, Illinois, Kansas, Maryland, New Jersey, New Mexico, Oregon, Pennsylvania, Texas, Washington, and Wisconsin -- are currently taking action to curtail the spread of the practice, particularly with respect to flavored cigarettes from India. New York is also investigating Web tobacco sales after a 17-year-old state Assembly intern was able to buy five cartons from a firm "no questions asked." Given that online commerce seems "tailor-made" for products such as cigarettes, Director of Action on Smoking and Health John Banzhaf applauded the recent regulatory response by the states, arguing that authorities should "nip such a potential problem in the bud." He said, "I think they're just waking up to it" (Hoffman, 1/8).