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Deccember
2002

TRENDS AND TRENDSETTERS IN SPECIALTY TOBACCO RETAILING
Bills Seek to Regulate Online Cigarette Sales
Washington, D.C.- Alarmed by the ease with which children can order tobacco products through online vendors, several legislators are proposing federal bills to enforce age verification and implement harsh penalties for those caught selling to minors.

In November, U.S. Reps. Marty Meehan, D-Mass., and James Hansen, R-Utah, introduced a bill that would require Internet sellers to check the name and age of prospective buyers against a database containing their government I.D.ís, such as driverís license. It would also add an additional layer of protection by requiring a second identification check and signature verification at the point-of-sale.

The bill drew little attention in the lame-duck final session of Congress, but the authors are confident of serious potential when the new congress convenes in January.

Meanwhile, Democratic Sen. Charles Schumer of New York unveiled a similar plan requiring companies selling cigarettes over the Internet and delivery services to verify customer ages. The plan would also require vendors to post online health warnings and reminders that selling tobacco to those under 18 is illegal, and would include provisions to shut down any site that violate the underage provisions. The Senator plans to introduce the legislation in the 108th congress in January, according to aides.

In December 2001, U.S. Rep. Martin Meehan, D-Mass., proposed a similar law. The state of Rhode Island already requires Web retailers and mail order companies to obtain valid identification and signatures from tobacco buyers.


RETAIL RADAR

  • Michael and Robert Frey, founders of Freyboy Tobacco, recently celebrated the opening of their ninth store, Empire Cigars at the New York-New York Hotel and Casino in Las Vegas. Their first retail cigar store, Mardi Gras Cigars at the Rio All-Suites Hotel & Casino, opened in September 1996.

  • Fox Sports Grill in Scottsdale, Ariz. opened to the public November 8 after celebrating a grand opening the day before with stars such as Wayne Gretzky, Terry Bradshaw, Curt Schilling, Mark Grace, and Roger Staubach. The restaurant is the first of a national chain to open, featuring a state-of-the-art sports bar, cigar lounge, and a chefís room for special events. The facility includes a wood-burning grill, stone fireplace, outdoor putting green, a billiards room, and areas for live Fox Sports broadcasts. B & B Restaurant Ventures holds an exclusive agreement to develop, finance, and manage operations of the restaurants.

  • A cigar and martini bar called Smokiní Martini plans to occupy about 2,000 square feet on the third floor of a new upscale shopping center in Palmetto, Fla. The $6.5 million, 40,000 square-foot Riverside Plaza is scheduled for completion next summer.

  • BITS & PIECES

  • Massachusetts officials have abandoned plans to eliminate special manufacturer discounts that could have raised the price of a pack of cigarettes by 60 cents. The state raised its cigarette excise tax by 75 cents over the summer.

  • Gran Reserve Corp.ís CigarGold.com Internet cigar website has launched a $200,000 advertising program on the Premier Radio Network, concentrating primarily on the Fox Sports Network. The company is promoting an offer for five of its premium Dominican cigars for $.05 each. The company says it will also be running a similar promotion in the Wall Street Journal.

  • Fourteen tobacco wholesalers, led by the New York Association of Tobacco and Candy Wholesalers, have sued New York City and New York state in an attempt to overturn the $1.42-a-pack increase imposed by New York City Mayor Michael Bloomberg on June 30. The increase sent cigarette prices soaring to about $7. The lawsuit says the taxes have put licensed vendors at a disadvantage by driving cigarette sales to the Internet and the black market. A 52.9 percent decline in city sales of legally stamped cigarettes will cost the state $390 million, plaintiffs claim.

  • SMOKESHOP - December 2002