Innovative proposals for regulating tobacco retail.

This post highlights two recent and innovative government proposals to address tobacco retailing - including a home grown solution for northern Canada!

Curbing retailer incentive programs

Tobacco companies
motivate retailers
with prizes and rewards.
 

One of the more recent marketing strategies of tobacco companies is to offer incentive programs to convenience store owners and sales clerks. In return for selling more product, participating in sales training or otherwise helping promote tobacco products, these workers can earn points which they can redeem for travel, gift items or other benefits. They can also vie for the right to buy tobacco products more cheaply than their competitors.

This is a problem for public health because it puts additional pressure on retailers to sell cigarettes -- lots of them. It drives the price of cigarettes down because those who do not get special prices are pressured to lower their in order to compete with those who do. It gives store employees a personal incentive to sell more products, irrespective of the benefit to their employer. 

To date, Quebec is the only province to have amended its law to address these new promotional programs. In 2015 it amended its Tobacco Control Act to prohibit tobacco companies from "offering rebates, gratuities or any other form of benefit related to the sale or the retail price of a tobacco product to operators of tobacco retail outlets, including their employees." This measure has ended some of these marketing ploys, but has not stopped the companies from rewarding or punishing retailers by adjusting the wholesale prices.

Nunavut is the first Canadian jurisdiction to introduce legislation to directly address the preferential pricing practices and their health impact. Last month, its legislature gave second reading to Bill 57, a proposed new Tobacco and Smoking Act.   This bill contains many important measures and sets a new high standard for Canadian tobacco control laws. Among its innovations are a clear direction to shut down promotions that encourage retailers to sell more tobacco and "smoking" products (including electronic cigarettes).

The proposed measures include:

• an end to incentives offered to retailers by manufacturers or wholesalers
• an end to incentives offered to customers by retailers 
• an end to price signs at retail (price lists can be shown to customers)
• an end to price reductions for higher volume sales (like bundled packages)
• an end to price discrimination (offering retailers or customers a better price than to others)
• the power to regulate prices 

Reducing the density of tobacco retailers

Over the decades, provincial governments have reduced the number of places where tobacco can be sold. Cigarettes can no longer be sold in pharmacies (except in B.C.), in health care settings (except in New Brunswick). Some provinces have also banned sales in restaurants and bars, amusement parks, and through the internet. 

These restrictions have helped drive down the number of tobacco retailers in Canada from over 40,000 in 2000 to about 28,000 today. But to date no Canadian government has set a target to reduce the density or quantity of tobacco retail outlets.

Last week, Netherlands Health Minister Paul Blockhuis outlined his plan to do so for that country. With a long-term goal of restricting tobacco sales to age-restricted stores, his initial 5-year plan will reduce that country's tobacco outlets from 16,000 to about 6,000 after 2024 by ending sales in vending machines, one line and in supermarkets. A review will begin next year on how to transition to tobacco only stores after 2030. 

The Netherlands has roughly half the population of Canada. After 2024 it will have fewer tobacco outlets per capita (34 for 100,000 people) than any other European Country. By way of comparison, Canada currently has 71 tobacco retail outlets per 100,000 people and 26 gas stations or pharmacies for the same population.

This Dutch approach is supported by an economic review and modelling of the impact in which several options were consieered, such as capping density and using licensing conditions. The government estimates that moving towards tobacco-only stores as they are doing will reduce the number of Dutch smokers by 120,000.