Tag Archives: chewing tobacco

Little Cigars Gain Popularity in New Jersey

Over the past several years of New Jersey’ increased state and federal taxes a great number of smokers have turned to less-taxed smoking products.

New Jersey implemented a $2.70 tax per cigarette package, and the federal government has established a $1.01 excise tax two years ago.

Less-taxed smoking products such as roll-your-own cigarettes

Less-taxed smoking products such as roll-your-own cigarettes

“The six highest tobacco taxes in the country may discourage many smokers from this hazardous habit and others from starting lighting up,” said Karen Blumenfeld, executive director of Global Advisors on Smokefree Policy.

New Jersey gathered about $742 million in cigarette taxes in 2010. That figure was a 4% decrease, $33.1 million less in comparison to 2008 data.

However the profit from other cigarette products as cigars, chewing tobacco, hookah tobacco and roll-your-own cigarettes increased by 26% in that time, producing $3.7 million more from lower tax rates.

The state has a stipulated wholesale tax on all tobacco products that is 30% of the price the retailer pays the manufacturer.

“If I had to purchase cigarettes for seven or eight dollars, I would think about quitting,” said Schubiger, 52, who bought a 10-pack of little cigars for $22. Had they been cigarettes, he would have paid nearly $75.

“Price is a significant thing; plus I like them very much,” he said.

New Jersey government proposed to tax little cigars the same as regular cigarettes.

“The additional tax will make the little cigars so attractive to present smokers looking for a cheaper alternative,” said Schubiger.

The Office of Legislative Services declared that the bill would raise tax revenue $6 million to approximately $9 million. According to statistics more than 5 million packages of little cigars were sold in 2010.

However increasing taxes will not make people stop smoking, the future increases may affect New Jersey businesses.

A tobacco store that is owned by Melchiondo sells cigars, hookah tobacco, cigarettes, little cigars and roll-your-own tobacco.

“Whether cigarettes are sold for $2 a pack or $8, people will continue to smoke, that will put some weight on the roll-your-own market if that is not taxed any more. The little cigar smokers may switch to roll-your-own,” he said.

Nearly 3.6 billion fewer cigarettes were produced from January to July than last year, as 2 % decrease, according to the data presented by the Department of Treasury’s Alcohol and Tobacco Tax Bureau.

Little cigars are more profitable to sell than regular cigarettes, which unlike little cigars are available approximately everywhere.
Currently in New Jersey about 14% of adult people are smoking.

Victims of cigarette tax increase

The Sharps, a farmer family from North Carolina has become famous for the high-quality tobacco they have been growing on their farms for many decades. However, when the federal excise tax on tobacco products was increased by 150 per cents, the Sharp family became frustrated by finding themselves somewhere near bankruptcy.

Peter Sharp, who has been growing tobacco from his early childhood and crops more than million pounds of tobacco on 500 acres every year, admitted that their customers reduced their orders on the threshold of inevitable sales declines. Mr. Sharp also said that they and other farmers would have to fire up to a half of their workers in order to cope with losses.

victims of cigarette tax

Following public smoking bans that were imposed in every state across the United States, state cigarette tax increases and constant influence of anti-smoking groups, the sales of cigarettes and other tobacco products were supposed to decline by almost 5 per cent in 2009.

Yet, with the new federal tax on cigarettes that jumped from 39 cents to $1.01 a pack on Wednesday, April 1, industry experts predict up to 10 per cent decline in the sales of cigarettes. Other tobacco products would also suffer.

Sharp said tobacco retailers have cut their orders by one third, and industry tycoons Philip Morris USA and Reynolds American reduced their orders for his tobacco by 5 percent when the bill regarding federal excise tax increase was signed into law. Growers admitted that the tobacco consumption cutbacks would definitely trigger a kind of a domino effect because farmers would have no money to pay salaries, to buy fuel and equipment. Therefore, that would have a huge and very grievous impact on the entire community, affecting many people.

Farmers who had been raising tobacco were always firmly protected by local authorities for many decades, like lawmakers from Michigan and New York rigorously defend their automobile industry and Wall Street, since tobacco growing still is a hugely profitable business. According to the reports, only in the state of North Carolina the tobacco harvest was worth almost $700 million last year.

However, politicians do not take care of ‘Golden Leaf’ anymore. Several years ago Congress abolished the price support and quotas for tobacco, the system that was established during Depression. Last week the Washington lawmakers went even further by providing the Food and Drug Administration with the powers to regulate tobacco products.

North Carolina Assembly members are now debating over increasing the state taxes on cigarettes and tobacco products to unimaginable and incredible $1 per pack. Just four years ago the state cigarette tax was only a nickel.

Kay Hagan, a Democrat Senator from North Carolina was initially against the federal tax hike, stating that her native state would lose almost $40 million in revenue and 3,000 work places. However, she then changed her mind, and voted for the corresponding bill, saying that she decided to support the health of future generations, an excuse, local farmers like the Sharp family simply does not understand.

Jeff Thompson, Sharps’ neighbor railed at the Congress decision, saying that those programs that would benefit many children across the nation should not be paid by a small group of tobacco consumers and growers only. He added that it would be fair if all the tax payers would have paid for that program.

Thus, the tax increase became another huge hit for the farmers who have just recovered from 25 percent sales decline in 2005 when tobacco quotas were abolished. Since 2005, farmers have turned their head to exports and new tobacco-containing products created by tobacco industry moguls.

During these four years tobacco industry has invented new marketing strategies, launching such products as snus, chewing tobacco and other products to the cigarette market. These products were supposed to become cheaper alternatives for cigarettes, but the federal tax hike affected them as well.

Tobacco growers also began selling their harvest to China and other countries, however farmers complain that cheap tobacco from Brazil and African countries restricts the volumes ordered from overseas and therefore could not help them to overcome losses.

Use of chewing tobacco becomes more popular

According to the results of a research accomplished by Substance Abuse and Mental Health Services Administration the rates of minor boys who use chewing tobacco have increased from 3.5 to 4.5 percent within 5 years, making it a 30 percent rise. Scientists have underlined that teenagers who preferred using smokeless tobacco have been living mainly in rural areas.

As regards the use of chewing tobacco among adult population, the numbers have remained relatively stable, increasing by only 0.3 percent from 3.0 to 3.3 percents.

chewing-tobacco

The survey regarding smokeless tobacco use found out that almost 8 million people aged 12 and older admitted chewing smokeless tobacco during last year.

During the nationwide survey around one million minors were proposed to answer several questions related to using tobacco for chewing, inhaling, snorting and mixing with gums. According to the survey results almost 400,000 teenagers said trying or using chewing tobacco regularly.

Other results of smokeless tobacco use survey indicated that:

  • The overwhelming majority of actual users of chewing tobacco (86%) admitted to smoke cigarettes at least 10 times and 40 percents of surveyed minors lighted up within last couple of months.
  • Many regular smokers switched to using chewing tobacco thinking that it would help them give up smoking, however the majority of them (almost 90%) were still puffing on their cigarettes after almost a year of chewing smokeless tobacco.
  • Amidst people who had tried both cigarettes and chewing tobacco at least once during their lives, 66 percent began smoking before using smokeless tobacco; 32 percent of surveyed tried chewing tobacco first and 2 percent admitted to begin smoking and chewing simultaneously.
  • Men are almost 20 times more likely to use smokeless tobacco for chewing than women.

Prof. Jonas Smirnoff, one of the survey leaders commented the results of survey saying that users of smokeless tobacco have not been aware that chewing tobacco was a not a healthier substitute for cigarettes, as smokeless tobacco has been linked with oral cancer risk for a long time. Scientist also added that smokeless tobacco could contribute to becoming nicotine addicted as well as in case with smoking usual cigarettes.

Jennifer McNally, assistant to president of the campaign for tobacco-free kids advocacy group stated that the trend of using chewing smokeless tobacco among minors has been raising more and more concerns among scientists and physicians.

She blamed tobacco industry for luring adolescents to start chewing tobacco in order to become more popular among their friends.

Mrs. McNally indicated that the recent increase in the rates of teenage tobacco chewers is closely related to the increase in the tobacco companies’ investments in advertising their products and attracting minor audience by indirect propaganda of smokeless tobacco.

The recent surveys raised many demands to give the U.S. Food and Drug Administration the power to ban the use of smokeless tobacco among minors as well as to regulate tobacco products.