Santa Cruz City Council to consider tobacco retail license fee: Funds would be used to fight underage cigarette sales

SANTA CRUZ -- Following in Watsonville's footsteps, the Santa Cruz City Council on Tuesday will weigh the creation of an tobacco retail license fee to fund programs designed to reduce access to cigarettes by minors.

The council will vote on directing staff to study how many businesses would be affected and how the fee would be administered. The council would consider an actual proposal later.

In August, Watsonville City Council passed a similar measure, the first of its kind in the county, to charge retailers $255 annually for a license to sell tobacco. The program is expected to raise more than $15,000 from 61 retailers, money that would support education programs and decoy stings designed to ensure retailers are checking IDs.

Santa Cruz Mayor Mike Rotkin is recommending the license fee now because "there will be community support for it" and because it will take time to document the rates of tobacco sales to minors. Staff also must still determine whether the fee is subject to Proposition 26, the recently passed state measure requiring voter approval for some taxes and fees.

Interim Police Chief Kevin Vogel said the department does not currently conduct tobacco decoy stings, adding, "It's my anecdotal sense is that it's occurring out there, but hasn't come on our radar as a problem." But he noted that Watsonville police weren't sure how widespread a problem they had until they studied it.

Thirteen-year tobacco retailer Ron Venturi, who owns Ron and Bridgette's Place with his wife, has long anticipated the city would pass a fee like nearly 80 other jurisdictions in California. He said he understands the desire to curb illegal sales to teens.
"We don't sell to minors," he said. "We have children. They don't smoke. We wouldn't want someone selling to our children."

But he also said another fee will make doing business difficult. "Basically, we're being fined for not doing anything wrong," he said, adding that he will have no choice but to pass the cost along to his customers.

The city created an Alcohol Sales Permit Fee 12 years ago to fund a police education and compliance program about alcohol sales.

Rotkin said he is sympathetic to small businesses, but said retailers that sell a product proven to pose serious health risks should have to fund programs that address negative impacts.

"I don't have a problem if you drive the tobacco industry out of business," Rotkin said. "They are selling death and I don't see that we need to support them."

The council will weigh the fee study during its 3 p.m. session.

Cigarette butts targeted

Smokers have a convenient new way to dispose of their cigarette butts at public events in Salem and Beverly under a new initiative. An ad hoc committee comprised of officials and environmental advocates from the two cities recently acquired 20 cigarette butt receptacles that it is making available for borrowing at no charge for public events in Salem and Beverly.

The committee, Citizens for Salem/Beverly Water Resources, purchased the receptacles as part of a $1,500 grant it received earlier this year from the Vermont-based New England Grassroots Fund to acquire equipment that can protect water resources and reduce waste. Committee members note that cigarette butts are made of cellulose acetate that is non biodegradable and are the most littered item in the world.

The new receptacles have already collected more than 500 cigarette butts at several events over the last few weeks, including the Salem Jazz and Soul Festival held at Salem Willows Park, according to Jason Silva, chief of staff to Salem Mayor Kimberley L. Driscoll. The committee estimates the receptacles have the potential to collect more than 20,000 cigarette butts each year.

Citi Downgrades Altria, Lorillard, RHS Could Get Burned

Citigroup made calls on U.S. tobacco companies today.

Citi downgraded Altria (MO) from buy to hold, maintaining a $17 price target.

It downgraded Lorillard (LO) from buy to hold, maintaining a $95 price target.

Citi cited increased menthol regulation risk in the downgrades.

Citigroup has buy rating on Reynolds American (RAI), with a price target of $79, and noted the company is less exposed to methanol.

Altria, Lorillard and Reynolds American traded lower today.

Together, the three companies make up 7.62% of the Rydex S&P Equal Weight Consumer Staples ETF (RHS), which was flat on Friday.

Protecting Kids from Tobacco

Every day nearly 4,000 kids under 18 try their first cigarette and 1,000 kids under 18 become daily smokers. Many of these kids will become addicted before they are old enough to understand the risks and will ultimately die too young of tobacco-related diseases. FDA is working to protect the health of America’s children and ultimately reduce the burden of illness and death caused by tobacco use.

Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents
FDA is issuing a final rule that contains a broad set of federal requirements designed to significantly curb access to and the appeal of cigarettes and smokeless tobacco products to children and adolescents in the United States.
The new rule became effective on June 22, 2010, and has the force and effect of law. Among other things, the rule:
Prohibits the sale of cigarettes or smokeless tobacco to people younger than 18,
Prohibits the sale of cigarette packages with less than 20 cigarettes,
Prohibits distribution of free samples of cigarettes,
Restricts distribution of free samples of smokeless tobacco, and
Prohibits tobacco brand name sponsorship of any athletic, musical or other social or cultural events.

Halloween holdup nets cash, cigarettes

HALIFAX - Police in the Halifax area say they're looking for a suspect in a Halloween armed robbery of a convenience store.

Police were called to the store on Pleasant Street in Dartmouth on Sunday night, where someone in a Halloween-style scream mask held a knife at the clerk.

The suspect fled on foot with some cash and cigarettes.

Police say there were no injuries.

The suspect is described as a white male wearing a blue hoodie, yellow work boots and baggy jeans.

Police also say he was wearing one glove.