US: Smokers Stock up before Cigarette Tax Increases

Source from:  The Journal  07/03/2013

Local businesses saw a flurry of cigarette carton purchases Sunday and throughout last week ahead of Monday's implementation of the new state tobacco tax hike.

Starting July 1, Minnesota's tobacco tax was increased by $1.60 per pack to bring the total state tax to $2.83 per pack. The tax increase makes a pack of Marlboro at the state minimum price cost around $7.83 per pack.

Area smokers went on a spending spree last week to buy cartons before the tax increase. Sales got particularly intense on Sunday night when smokers took advantage of their last chance to stock up.

Convenience stores and gas stations had the highest traffic of sales as well as the most dramatic anecdotes about their sales. Every one of these stores reported selling nearly twice their typical monthly sales in just the last week.

One store reported blowing through sales of 10 cartons of cigarettes in less than 20 minutes. A woman claimed to have stocked up by buying approximately $500 in cartons of cigarettes on Sunday.

Another store reported that it typically restocks their cigarettes every other day, but it had to restock the front desk supply twice on Sunday.

These stores reported selling almost no packs on Monday. In one instance, a store reported only selling one pack the entire day.

Larger business like Walmart and Hy-Vee only reported modest boosts in sales during last week. They did not experience the Sunday night buying spree that the gas stations did.

Nearly all of the business owners and managers said they believe Monday's drop was due to smokers stocking up on Sunday. However, they said they will be watching closely to see if this signals lower overall cigarette sales in the future.

Impact on the

person-to-person level

In informal questioning, a majority of people asked about the new tax said they were apathetic or had no opinion about it because they were not smokers.

The biggest and most negative response to the tax came from high volume smokers and store owners. A heavy smoker vehemently opposed the new tax and others described it as "discriminatory." The heavy smokers said they do not anticipate the tax impacting their smoking habits and that they expected it to negatively impact their monthly budgets.

A?New Ulm smoker who requested not to be directly named, said he believes smokers were unfairly picked to carry the tax burden because they are easy targets.

"They could have taxed anything else if they wanted," said Jim, "They knew they could do this and not get in trouble."

New Ulm Hy-Vee store director Brian Amsberry gave his perspective about the tax. The tax hike forced retailers to increase prices even though the stores would not see any additional profit. He said the tax increase is unlikely to impact the dedicated smokers that bought cartons before Monday, but casual smokers would likely be closer to determining it was too expensive to keep smoking.

A handful of people interviewed said the additional tax is an incentive to quit smoking or to help their existing efforts to stop smoking. Some said they might use the less taxed e-cigarettes to help them quit. Enditem