|Tobacco companies profit from loophole, market small cigars|
Tobacco companies profit from loophole, market small cigars
After decades of progress toward their goal of preventing smoking-related illness and death, public health officials said Thursday that they're seeing a worrisome new trend: Smokers who switch from high-priced cigarettes to cheaper, but equally dangerous, small cigars.
While cigarette consumption declined 33% from 2000 to 2011, use of other kinds of tobacco grew by 123%, as smokers sought lower-cost alternatives to cigarettes, whose prices have risen sharply as a growing number of states raise taxes on them, according to a new report from the Centers for Disease Control and Prevention. And overall declines in smoked-tobacco consumption are grinding to a halt, with less than a 1% decrease in use from 2010 to 2011.
"This report demonstrates that the the tobacco industry is as resourceful, and as predatory, as ever," saysThomas Glynn, director of international cancer control at the American Cancer Society. "It also provides us with some insight into the tobacco industry's future plans. When manufactured cigarettes may, at some point in the future, no longer be their primary source of income, they will look to other ways — such as cigars, roll-your-own, various forms of smokeless tobacco — of maintaining their customer's nicotine dependence."
Tax "loopholes" appear to be driving the shift in smoking habits, says the CDC's Terry Pechacek, the report's co-author.
Due to those loopholes, "little cigars" that look nearly identical to cigarettes, except for their brown color, are taxed at much lower rates, so they cost a fraction of what a pack of cigarettes does, Pechacek.
Unlike old-fashioned stogies, the newly popular little cigars are basically plumped up cigarettes. Their slightly larger size nudges them over the edge into a different tax category, allowing them to sell for as little as seven cents each, or about $1.40 a pack. In most states, cigarettes sell for $4 or $5 a pack, says the CDC's Michael Tynan, another co-author of the report. Little cigars are especially appealing to children and teens, Tynan says, because they come in a variety of flavors, such as grape, vanilla and chocolate.
"They look like cigarettes," Tynan says. "They smoke like cigarettes. They taste better than a cigarette, because they have flavors. They are cheaper than cigarettes, because of the tax issues. But they are just as deadly. They contain the same toxic chemicals."
Young people, who have the least disposable income, make up the bulk of new smokers, Pechacek says. Studies show that nearly all smokers take up the habit before they turn 20. Raising taxes and creating smoke-free zones have been shown to be among the most effective ways to prevent kids and adults from starting smoking, as well as encouraging them to quit.
Recent CDC research shows that one in four high school boys is already smoking cigars, however, Pechacek says.
Studies show that kids are also increasingly turning to smokeless tobacco, either in traditional chews or new pellets, to get their nicotine fix in places where they can't smoke, he adds.
Pechacek says he's concerned that these alternatives to traditional cigarettes are allowing tobacco manufacturers to circumvent the many roadblocks put in their paths in recent years, from taxes to smoking bans.
"When we look at the pattern of 'replacement smokers,' which are youth and young adults, we have half a million more replacement smokers this past year than we did 10 years ago," he says.
Matthew Myers of the Campaign for Tobacco-Free Kids says that "by keeping the prices of these products low, tobacco companies are attracting kids and keeping smokers smoking."
Myers says the report shows the need to equalize taxes on all tobacco products, and for the Food and Drug Administration to regulate all of them. A 2009 law gave the FDAauthority to regulate cigars, but it has not done so yet, he says.
Myers notes that the biggest changes in tobacco use happened from 2008 to 2011. That's when the federal tax on cigarettes increased to $1.01 a pack, taxing small cigars and roll-your-own tobacco at the same rate as cigarettes. Larger cigars, pipe tobacco and smokeless tobacco were taxed at much lower rates. Many cigar makers made their small cigars slightly heavier to qualify for the lower tax rate on large cigars, Myers says.
Altria, the parent company of the country's leading cigarette maker, Philip Morris USA, believes "that little cigars and roll-your-own tobacco should pay the same tax as cigarettes, as Congress intended," spokesman David Sylvia said. Although Altria also owns John Middleton, which makes machine-made cigars, it supports state and federal laws "to ensure that taxes on little cigars and roll-your-own are taxed the same as cigarettes."
R.J. Reynolds Tobacco Company, also a major cigarette manufacturer, does not market loose or roll-your-own tobacco, or cigars. Other makers of little cigars could not be reached or declined to comment.
William Zoghbi, president of the American College of Cardiology, praised the CDC for bringing the trend to light. He says he's concerned that American's health — which has improved markedly as smoking rates have declined — will suffer. "This is really alarming," he adds.
Tax loopholes have cost governments more than $1 billion in revenue since 2009, saysChris Hansen, president of the American Cancer Society Cancer Action Network.
"The disparity in tax treatment of tobacco products is undercutting our ability to effectively reduce tobacco use and save lives," he said in a statement. "Tax loopholes harm public health by encouraging use of lower-taxed tobacco products. … More smokers who might otherwise quit are now resorting to other types of tobacco products, including cigars and pipe tobacco, because of lower taxes resulting in overall lower costs. The CDC's findings are consistent with a Government Accountability Office report issued in April that found the same disparities in consumption of smoked tobacco products."
Tobacco use is the leading cause of preventable deaths in this country, killing approximately 443,000 Americans each year, Hansen says. Tobacco costs the health care system $96 billion a year.