Date: 5/27/2020
Thousands of local businesses will face economic calamity on June 1, 2020, when Massachusetts ‘Bans the Sale of Menthol Cigarettes’, and strips these products from their shelves, at a time when these owners are being proclaimed as ‘heroes’ for remaining open during this pandemic, and exposing themselves, and their families, to great personal risk.
The Northeast Association of Wholesale Distributors (NEAWD) joins the New England Convenience Store and Energy Marketers Association, in calling on Governor Baker, and the Massachusetts Legislature, to ‘temporarily delay’ implementing this ‘Ban on Menthol Products’, until after the COVID-19 Pandemic has passed, to prevent local businesses from suffering a crippling blow to their currently fragile operations, and to prevent the loss of hundreds of millions of dollars of tobacco excise and sales tax revenues.
The MA Department of Revenue recently reported a drop of $2.341 Billion in revenues collected in April (a decline of over 50 percent) from the amount collected a year ago.
To automatically strip menthol products from their shelves, will force consumers to travel over state lines, or turn to black market alternative sources who do not comply with age restriction verification, or pay the commonwealth the taxes that are due.
Besides increasing out-of-state travel at a time when every state health government official is encouraging a stay-at-home policy, the ban will also make it that much more difficult for these local merchants to remain in operation.
Menthol flavored products make up approximately 30 percent of their sales (35 percent in stores serving urban and racially diverse communities). Once you eliminate the sale of menthol tobacco products to adult consumers, these small businesses will suffer a “double hit” because they will also lose all ancillary sales that accompany their sales. When people stop in to purchase tobacco products, they oftentimes also purchase gasoline, newspapers, lottery tickets, snacks, candy, gum, coffee, soda, and a variety of other sundry items. If prohibited from purchasing their menthol tobacco products from local convenience stores, it will also mean that the storeowner will lose out on all other ancillary sales made at the time of their tobacco purchases.
The wholesale distributors are the commonwealth’s legal distribution network that employs thousands of Massachusetts residents, and is responsible for getting all essential goods that stock the shelves of these local retailers.
The NEAWD is also a partner to the DOR, as the sole entity entrusted with the responsibility for affixing tax stamps on ALL tobacco products. Each year, we collect over three-quarters of $1 billion in Tobacco Excise and Sales Taxes.
The potential loss of sales to bordering states, and the black market, will certainly reduce the collection of hundreds of millions of dollars in taxes, and further increase the loss of desperately needed revenues at a time it is most needed to combat the coronavirus.
The Northeast Association of Wholesale Distributors urges Governor Baker, and our State Legislature, to temporarily postpone this ban until after the coronavirus pandemic has passed. This temporary ban on the sale of menthol cigarettes to adult consumers will not affect the current prohibition on sale of these products to minors. That prohibition will remain unchanged, but the temporary delay of the ban would serve as a lifeline to small businesses by allowing the sale of these products to their adult customers.
Paul E. Caron
Executive Director
Northeast Association of Wholesale Distributors
