Gov. Kathy Hochul wants to ban flavored cigarettes, including menthol cigarettes, and raise taxes by $1 a pack as part of her state budget plan. But convenience store owners say those actions would lead to more tobacco products being sold on the burgeoning black market.
The owners and wholesale marketers and distributors said raising taxes to $5.35 a pack — which would be the highest rate in the nation — and banning flavored cigarettes would have unintended consequences.
Kent Sopris, president of the New York Association of Convenience Store Owners, said his 13,000 members could lose $1 billion in revenue a year if the State Legislature approves the proposals. He predicted some stores would go out of business.
“There'll be jobs lost,” Sopris said. “And some stores only sell flavored tobacco products. They're just very popular. If you take them away, those entire stores will close down.”
David Schwartz with the New York State Association of Wholesale Marketers and Distributors said the illegal tobacco trade coming in from other states is an “epidemic.” He also said some law enforcement groups estimate that over half of all cigarettes sold in New York City are from the black market. The ban and new taxes will only make things worse, he said.
“You cannot raise a tax that high and not close down the marketplace,” Schwartz said. “You can't build a wall around New York and expect illegal products not to flow in through this illegal market.”
Opponents said previous attempts at prohibition haven’t worked. The state banned flavored nicotine vaping products in 2019, and they said that has led to an increase of black-market sales.
Sopris said there’s also a disconnect between New York’s policies in its emerging legal cannabis sales market, where numerous flavored products are offered, and the attempt to end flavored cigarettes.
“Clearly, there's a contradiction between banning flavored tobacco and allowing flavored cannabis,” Sopris said.
A poll by Siena College released Feb. 27 found that most New Yorkers support the proposed tax increase and the ban of flavored cigarettes.
The American Cancer Society, whose members also came to the Capitol to lobby on tobacco policy, said increasing taxes on cigarettes and banning flavored tobacco products will help more New Yorkers quit smoking and avoid related diseases and death.
Michael Davoli, director of governmental relations with the group’s Cancer Action Network, said the claims by the convenience store owners and tobacco distributors don’t hold water. He said when the state banned indoor smoking in public places in the 1990s, bars and restaurants warned that they would go out of business. And he said that didn’t happen.
“They said, ‘If you get rid of smoking from bars and restaurants, we’re all going to go out of business, we’re all going to go bankrupt,’” said Davoli, who added that even after economic struggles during the pandemic, those industries continue to thrive.
“We cannot deny the simple fact that that argument is simply fear-mongering,” he said.
Davoli said the proposals won’t affect the existing black market.
“There has always been an illicit market,” he said. “There will always be an illicit market.”
He said despite what opponents say, the vast majority of cigarette sales in New York are from legal retailers, and they generate $1 billion in tax revenue each year.
The Cancer Society has its own issues with the state’s cigarette taxation policies. They say while New York has collected billions of dollars over the years from tobacco taxes, very little of that goes into smoking cessation and other health-related programs.
