California Governor Signs Bill Raising Tobacco-Purchase Age to 21--Update
May 05 2016 - 8:47AM
Dow Jones News
By Tripp Mickle and Alejandro Lazo
California Gov. Jerry Brown on Wednesday signed into law a bill
raising the legal purchase age for cigarettes and other tobacco
products to 21 years from 18.
The new law, which takes effect June 9, is a big boost to a
movement that is turning into the next major challenge to the $100
billion tobacco industry.
It capped a difficult day for the tobacco industry. The European
Union's top court on Wednesday upheld a 2014 law that would ban
menthol cigarettes and mandate bigger warning labels on cigarette
packages. On the same day, India's Supreme Court ordered tobacco
companies to comply with a new rule requiring graphic warnings
cover 85% of every cigarette pack.
In the U.S., lawmakers in more than 10 other states are
considering similar legislation including New York, Kentucky,
Oregon and Illinois. The Massachusetts Senate passed a bill last
month to raise its legal purchase age to 21. The bill still must be
voted on by the state House of Representatives.
Hawaii last year became the first state to pass such a law. It
followed cities including New York City; Boston; Kansas City, Mo.;
and Evanston, Ill.
The nation's largest tobacco company, Altria Group Inc., has
opposed raising the minimum age, encouraging states and
municipalities to defer to Congress and let it have "an informed
debate based on science" about the matter.
A spokesman for Reynolds American Inc., the second-largest
tobacco company, agreed, saying the Food and Drug Administration
should "do its job and send a report over to Congress, and then we
can have an intelligent debate about whether the age should be
raised or not."
An Altria spokesman has said the company wouldn't fight the
bill, but didn't rule out a referendum opposing other tobacco
legislation passed in March.
In addition to signing the bill boosting the age limit on
cigarette buying, Mr. Brown signed another measure that prohibits
e-cigarette use where smoking is forbidden.
But he vetoed a law that gives local municipalities the ability
to levy cigarette taxes. The tax measure had the potential to
increase tobacco prices and cut into cigarette sales.
"Although California has one of the lowest cigarette tax rates
in the nation, I am reluctant to approve this measure in view of
all the taxes being proposed for the 2016 ballot," Mr. Brown said
in a veto message.
As the nation's most populous state, California's move to raise
the tobacco-purchase age will hurt U.S. tobacco sales. It is
expected to reduce sales by 43 million packs of cigarettes over the
2016-to-2017 fiscal years, according to estimates by California's
Board of Equalization, one of the state's tax agencies. At an
average price of $5.96 a pack, that would equate to about $256
million in lost cigarette sales.
Cowen and Co. analyst Vivien Azer said the law itself wouldn't
have a "material impact" on national cigarette sales volumes, which
would fall an estimated 0.04%. But that would change if it
influences other states to follow. Raising the purchase age to 21
nationwide would cost the tobacco industry about $2 billion, or 2%,
in near-term cigarette sales, according to a 2014 article in the
American Journal of Public Health by Jonathan Winickoff, associate
professor of pediatrics at Harvard Medical School.
Proponents of raising the legal age say they want to disrupt
cigarette use before it becomes an adult habit. Nearly nine out of
10 smokers first light up by age 18, and 99% start by 26, according
to a 2012 report by the U.S. Surgeon General. About two-thirds of
smokers start before 18, according to the Surgeon General's
report.
According to a separate government-commissioned study last year,
increasing the purchase age to 21 would "substantially" reduce the
numbers of 15- to 17-year-olds who begin smoking.
The study, conducted by the Institute of Medicine, found that
raising the age nationally would eventually reduce the number of
Americans who smoke by 12% and result in 249,000 fewer premature
deaths related to cigarette smoking for people born between 2000
and 2019.
About 75% of American adults and 70% of cigarette smokers favor
increasing the tobacco purchase age to 21, according to a report in
the American Journal of Preventive Medicine.
Write to Tripp Mickle at Tripp.Mickle@wsj.com and Alejandro Lazo
at alejandro.lazo@wsj.com
(END) Dow Jones Newswires
May 05, 2016 08:32 ET (12:32 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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