Theis currently considering proposed legislation that would prevent the use of coupons and other discounts and create a price floor for a pack of cigarettes. The measure would also increase penalties to retailers who sell loose or unstamped tobacco products. What do retailers think of this proposal? We asked Steve Nallen who runs a family-owned deli in the Bronx. Here’s what Steve thinks:
“My family has run a deli in the Woodlawn section of the Bronx for almost 35 years. Business is tough in in today’s economy, but my family has always played by the rules.
My law-abiding parents pay $112 for a carton of cigarettes and sell them for $11.50 per pack. We make a $3 profit on every carton of cigarettes we sell. Many of our competitors are not as scrupulous when it comes to the law. Some pay as little as $30 for a carton of untaxed cigarettes and sell them for $9 a pack. That’s $60-per-carton profit going directly into the small business owner’s pocket because they are evading New York state and city taxes. Theestimates almost half of the cigarette retailers in the five boroughs sell untaxed cigarettes. In the South Bronx, 80% of the cigarettes sold are illegal.
Five to seven years ago, when our cigarette prices matched those at neighborhood stores who were our competitors, we sold 150-200 cartons’ worth of cigarette packs a week. Now we sell eight cartons a week.
Too many businesses are breaking the law and fueling the black market. They cut into the business of honest retailers and avoid paying taxes that are meant to deter people from smoking.
The Sensible Tobacco Enforcement (STE) bill that is being considered by City Council would crack down on the illegal trafficking of untaxed cigarettes and unlicensed tobacco sellers, as well as tobacco company-sponsored discounts that are aimed at enticing new smokers.
My family business has never been based on cigarettes, but on our good standing in the community, relationship with our customers, and the quality products we sell. But when customers go into another store to save $3 on a pack of cigarettes, they also buy a gallon of milk and some eggs. We can’t continue to operate when cheap, illegal cigarettes cut into our business.
All across the city, small businesses that obey the law are being ruined by criminal operations selling illegal cigarettes. The proposed STE legislation would set a price floor for cigarettes and level the playing field for all businesses.
We support any measure that will actually save our stores. When illegal, untaxed cigarettes are sold, the city and state lose a significant amount of tax revenue and honest businesses like my family’s lose.”