NYC looks to bump tobacco from prime retail space

Friday - 3/22/2013, 11:26am EDT

DAVID B. CARUSO
Associated Press

NEW YORK (AP) -- 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.