While the proposal in San Francisco would prohibit the transfer/sale of tobacco retail permits (from one retailer to another), a market based approach (i.e. allowing tobacco retailers to transfer/sell licenses/permits to others) would be far superior for everyone.

Many state and/or local governments limit the number of alcohol retail and serving licenses (and some local governments, including more than 150 here in PA, prohibit the sale and/or serving of any alcohol known as dry laws). Here in PA, the leading opponents of allowing more alcohol licenses are existing license holders (who don’t want more competitors), and licensed beer distributors have repeatedly gone to court to prevent grocery/convenience stores from being allowed to sell beer.

Currently in PA, anyone (except convicted felons) can currently obtain a cigarette retail license simply by filling out a half page application (providing name and address) and sending the State a $25 check annually, which is why there are 25,000 licensed cigarette retailers, with many licensed cigarette retailers selling very few cigarettes. The most effective and fairest way to reduce the number of cigarette retailers is to simply increase the annual license fee, which also would increase cigarette sales/revenues by retailers that continue to sell cigarettes.

Reasonable compromise policies can benefit both public health and different segments of the tobacco industry.

Here in Pennsylvania, there are only 550 stores statewide that can legally sell liquor (i.e. state owned/operated liquor stores), while there are 25,000 cigarette retailers. So the tobacco business (like the liquor business) can thrive even if there are exponentially fewer retailers.

While cigarette consumption has declined in the US by 50% since 1982 (from 32 to 16 billion packs), the number of cigarette retailers (not including vending machines) has remained at about 500,000.

The proposal in SF would take many decades just to reduce the number of tobacco retailers by half.

The most effective way to sharply reduce the number of tobacco retailers (which I’ve long advocated) is to increase the annual tobacco retailer license fee to $1,000, $2,000 or more (similar to what was recently enacted in NY), which would quickly convince 10%, 20% or more of the lower volume retailers to stop selling tobacco.

Another way (which is increasingly occurring in other countries, and I suspect may soon be proposed/enacted in some liberal US cities) would be to require all tobacco products be kept out-of-sight by customers, which would encourage some retailers to stop selling tobacco. While I haven’t advocated this latter alternative (as I don’t believe it would achieve its stated purpose of preventing youth smoking), this could benefit tobacco specialty retailers as they would likely be able to get exempted from this type of law if they prohibit youth from entering the stores.

Attack on Tobacco
San Francisco mulls proposal to reduce the number of sale permits by more than half

SAN FRANCISCO — Smokers are huffing and businesses fuming over a controversial new proposal to drastically reduce the number of stores in San Francisco that can sell cigarettes.

Since 2003, retailers selling tobacco products in San Francisco have had to apply for a special permit. The permitting process helps the city keep track of sellers and crack down on those vending to minors, officials said.

But now there are too many permits citywide—particularly in low-income neighborhoods—according to city officials and anti-tobacco advocates, who have created legislation that would greatly reduce the number of stores that sell tobacco, reports the San Francisco Examiner.

An initial proposal imposes a cap of 35 permits for each of the 11 supervisor districts—385 total in the city. That is a more than two-thirds reduction from the 1,097 stores currently selling tobacco products citywide, acccording to the newspaper.

The proposal would not take away permits from businesses, but it would reduce them through attrition until there are no more than 35 per district. Also, owners would not be able to transfer the permits when they sell their stores, said Janet Clyde, a commissioner in the Office of Small Business.

The proposal might limit options for smokers, but it would also limit tobacco exposure to children, said Matt Rosen, senior director of community programs for the Youth Leadership Institute.

The institute wrote the legislation and is receiving guidance the Department of Public Health.

The legislation is still being vetted and has not been endorsed by a supervisor.

“[Children] can see advertising,” Rosen told the newspaper. “They can see stores that are visibly selling tobacco and other kinds of products that aren’t very good for them.”

The Department of Health says limiting permits would be an extension of its “commitment to public health.” Last year, tobacco-related death and disease cost the city $4,310 per smoker, anti-tobacco activists say.

Opponents of the proposal, mainly from the small-business community, say the bill would severely damage the health of retailers in San Francisco.

For most stores, “approximately 30% of the revenue is tobacco-related,” said Jimmy Shamieh, president of the Arab American Grocers Association, which has proposed alternative legislation that bans new permits but allows a transfer to new owners.

The stores become “valueless” when owners cannot transfer their tobacco permit to a person who wants to purchase the store, Shamieh said.

“It will change the landscape of San Francisco as we know it,” Shamieh said. “It will make it corporate-friendly. It will be devastating to mom-and-pop businesses.”

The new initiative is the latest is a string of efforts by the sity to limit smoking.

Last year, San Francisco became the first city in the nation to ban tobacco sales in pharmacies. The law exempts supermarkets and big-box stores, such as Costco, that contain pharmacies.

Also, the city recently imposed a 20-cent fee on each pack of cigarettes sold to offset the cost to clean up cigarette butts from city streets.

Supervisor Eric Mar is also reigniting stalled legislation that would forbid smoking in a slew of new settings, adding to an existing ban in bars, restaurants, parks, transit stops and taxicabs. The bill would expand no-smoking zones to include farmers markets and the outdoor seating areas of restaurants, cafes and coffee shops. Smoking would also be prohibited while waiting in lines at ATMs, theaters, athletic events and concert venues.

Boston’s ban on tobacco sales in pharmacies and on college campuses will affect fewer than 5% of tobacco retailers, and will have no effect of tobacco sales/consumption (as tobacco consumers will simply go to another tobacco retailer nearby).

This new regulation in Boston is basically anti tobacco grandstanding.

December 12, 2008 – BOSTON–Boston officials approved some of the toughest anti-tobacco rules in the United States on Thursday, extinguishing cigar bars and hookah bars and ending the sales of tobacco in pharmacies and on college campuses.
The Boston Public Health Commission, however, decided to give the bars 10 years before they would have to close, doubling the original proposed grace period for the establishments. Even then, the bars could seek an extension for another 10 years.

Boston is the largest U.S. city, by far, to move to outlaw smoking bars, which have been exempt from the city’s four-year-old workplace smoking ban.

Connecticut: Bristol Officials Discuss Proposal To Ban Smoking On Newell Road
City officials in Bristol, Connecticut, are currently discussing a proposal by Bristol Hospital President Kurt Barwis to declare Newell Road a no-smoking zone, which if approved would reportedly be the first smoking ban on a public road in the State. Mayor Art Ward said that if the officials approve the proposal he would consider expanding the ban to cover streets bordering city parks, schools and libraries. State Attorney General Richard Blumenthal welcomed the proposal, saying that “[t]his is an important public health goal that’s on the cutting edge.” Meanwhile, a city council panel is drafting an ordinance that would ban smoking in outdoor public areas (Connecticut Post 11/21).