Posted: 9/1/05
New cigarette tax causes local sales to slump, then rise again
By Joel Stottrup
A quick sampling of retailers of cigarettes in Princeton indicate that while some have moved to quit smoking because of the 75-cent increase per pack on Aug. 1, a dip in sales has mostly rebounded.
A few smokers were also approached for comment.
"I smoke the cheap ones," said one man who was buying cigarettes at the SuperAmerica convenience store last Friday and declined to give his name.
More smokers are looking for special deals now on cigarettes, said Steve Lunderborg, manager at the Holiday station convenience store.
Gov. Tim Pawlenty got the 2005 Legislature to pass what he called a "health impact fee" of 75 cents on the wholesale cost of each pack of cigarettes. Retailers have passed that on to buyers.
A twist to the story is that three major tobacco companies last Friday charged in Ramsey County District Court that the fee violates the settlement they had with the state in 1998. The three companies agreed to pay billions in the deal. Nine tobacco wholesalers have joined with the three companies in the lawsuit.
Pawlenty and the legislators who voted for the 75- cent increase looked to it as a way to help pay for a shortfall in the state's budget.
Mike Cunningham, a smoker, was asked last Friday, as he stopped to load a garbage onto a Princeton Public Utilities truck, what he thinks of the cigarette tax, as many people call it.
"It's expected," said Cunningham about the move by the state Legislature. "The government always balances the budget on the backs of the working guy."
Cunningham, who spends $40 a week on cigarettes, was asked if he considered quitting smoking.
"Too old to change my ways," he answered. "I'm not quitting nothing."
A check at the SuperAmerica gas station to see how cigarette sales have gone since the 75-cent increase went into effect produced these comments:
"When the price originally went up, there was maybe a 25 percent drop, but over the last one and a half to two weeks, it is right back up to where it was selling," said SuperAmerica station manager Tamara Thiel-France.
That high sales mark is anywhere from 75 to 90 cartons per day, she explained.
France said the explanation for the dip and the rebound was that many smokers were buying heavy in the days just before the increase went into effect. Therefore, France said, smokers were using up that supply for a time and not buying until they ran out.
One smokers who did that was Princeton resident Donna Brooks. She spent $160 to stock up on six cartons of cigarettes prior to the increase. Now those same six cartons would cost her $240.
"I don't know if I get that much enjoyment," she said. "I was kicking myself all day long, spending that much all at once. Not in my wildest dreams. It really slapped me in the face. It would pay for part of a vacation for that kind of money."
Brooks said last Friday she has one of the six cartons left and said she has been thinking about quitting smoking, something she has done before.
France, at the SuperAmerica station, said she has heard some customers tell her they are going to quit smoking and that some have.
Julie Kujawa, a clerk at the courtesy counter at Coborn's, the only major grocery store in Princeton, said that also saw more sales than normal of cigarettes before the increase began.
Then business "slowed down a little because people had stocked up," she said. "But now it is picking back up. A lot of people are angry, but if they don't quit . . ."
Princeton Union-Eagle
P.O. Box 278
Princeton, MN 55371
Telephone: 763-389-1222
Fax: 763-389-1728