How local governments are countering industry efforts to sell cheap tobacco

Tobacco companies spent over $8.6 billion on marketing in retail establishments, also called point-of-sale marketing, in 2014 (the most recent figures available). This article is part of a series highlighting ways that states and localities are countering the deep pockets of the tobacco industry with policies regulating where and how tobacco products are sold.

Raising the price of tobacco products is one of the most effective ways to slash smoking rates, but that can be difficult when tobacco companies spend billions of dollars every year on cigarette price discounts and coupons.

Local governments can counteract the tobacco industry’s deep pockets with policies aimed at keeping cheap tobacco out of their communities. These policies are just one way localities can combat tobacco retail marketing — also called point-of-sale marketing — which includes things like product displays and advertisements in retail establishments. Point-of-sale marketing is linked to impulse purchases of tobacco products, an increased likelihood of young people starting to smoke and decreased success for people attempting to quit smoking.

The federal government has few regulations affecting the price of tobacco products at the point of sale. The 2009 Tobacco Control Act prohibits selling cigarettes in less than packs of 20. The Food and Drug Administration’s “deeming” rule bans free giveaways or free samples of all tobacco products, and vending machine sales outside of adult-only facilities.

While federal regulations impacting the price of tobacco products in stores are limited, here are three ways localities are taking action.

Setting minimum cigarette pack prices

If a pack of cigarettes cost $10 — the minimum price recommended by the U.S. Surgeon General — about 1.5 million U.S. youth and young adult lives would be saved from early deaths. Today, the average price for a cigarette pack is about $6.

Studies have shown that cigarettes are even cheaper in certain communities across the country. For example, in California, for each 10 percentage point increase in the amount of black high school students in a given neighborhood, the cost for a pack of Newport menthol cigarettes was 12 cents lower. Tobacco companies have long targeted African-Americans with menthol cigarettes, and establishing a minimum price for cigarettes can help prevent this type of exploitation.

Last year, California’s Sonoma County passed a policy setting a minimum price of $7 for a pack of cigarettes, beginning January 1, 2018. New York City increased the price for a pack of cigarettes this year to $13, the highest price for cigarettes in the country.

Banning coupons and discounts

Research shows that eliminating discounts nationwide, combined with a $10-per-pack retail price, could result in almost 638,000 fewer youth smokers, almost 4.2 million fewer young adult smokers and more than 7.7 million fewer adult smokers, in just one year.

Several localities already ban promotions that allow consumers to get free or reduced-price tobacco products. Chicago and New York City prohibit retailers from redeeming any coupons, discounts or price-reduction promotions on tobacco products, such as multi-pack or buy-one-get-one deals. In Providence, R.I., retailers can’t redeem coupons, or have multi-pack discounts or sales promotions like buy-two-get-one-free or buy-one-get-one-discounted deals.

Controlling single- and multi-product sales

Cigars, little cigars and cigarillos, which come in flavors designed to appeal to youth, are often sold as singles or in packs of two for less than a dollar. That could make them a cheap alternative or substitute for candy- and fruit-flavored cigarettes, which were banned in 2009 (menthol cigarettes remain the only flavored cigarette still on the market). Studies have also found that little cigars and cigarillos are even cheaper in neighborhoods with more African-American residents.

As a solution, localities can set both minimum pack sizes and price requirements for these products. In New York City, for example, cigars that cost less than $3 individually must be sold in packs of four or more, and little cigars must be sold in packs of 20. In Massachusetts, 146 municipalities require single cigars to be sold for at least $2.50, and multi-packs of two or more cigars for at least $5.

For more information on tobacco industry retail practices, including licensing and density, placement and promotion, read our fact sheet and policy resource.