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Home » Recent CSD Articles » Categories » Today's News » Wells Fargo Anticipates Cigarette Price Increase Wells Fargo Anticipates Cigarette Price Increase Could the next cigarette price increase appear this September? Convenience store retailers should expect the next cigarette price increase to arrive sooner than the normal November cycle, according to a report by Wells Fargo Securities LLC. Wells Fargo conducted a survey of its tobacco retailer and wholesaler contacts representing approximately 60,000 U.S. convenience stores to gauge expectations for the next round of cigarette pricing increases. Bonnie Herzog, managing director – equity research, beverage, household & personal care, tobacco & c-stores for Wells Fargo noted, “According to our contacts, the next cigarette list price increase is expected to be led by PM USA during the week of Sept 18 at $0.08/pack (+2-3%). We agree as we don’t expect manufacturers to wait till the normal November cycle to take a price increase, especially given the severity of volume declines in Q2,” which were related to the outsized impact of California’s $2-per pack increase in excise tax. “As has been the case in past tax cycles, we expect the industry to further mitigate California tax-driven volume declines with list price increases, partially offset by stronger promo efforts. Longer term, we see further downside to combustible cigarette volumes if the U.S. Food and Drug Administration succeeds with its new nicotine mandate. However, we believe this could be mitigated by smokers potentially smoking more in an effort to get the nicotine levels they require—an ‘unintended consequence’—and increased conversion to reduced-risk products,” she added.

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Vaping advocates argue that e-cigarettes are not combustible, so second-hand smoke does not pose a health threat. Barber told the Times Union the ban was focused on protecting children from second-hand smoke as well as the temptation to smoke themselves. And he disagrees that e-cigarettes are harmless to the non-users who are in the vicinity of vaping. "Children watch and observe, and vaping might look like something they would want to do someday," Barber says. "And the aerosol from electronic cigarettes can contain nicotine and other carcinogens that can be inhaled by people sharing the park. E-cigarettes are just not consistent with a family-friendly park." The new law imposes a $50 fine for the first violation, while repeat offenders could find themselves paying $200-$500. "We don't need the revenue from the fines," Barber said, adding that he was confident locals would comply with the ban. The nonprofit group Capital District Tobacco Free Communities praised the ban. "Soon, all park visitors, both human and canine, will be able to breathe easier as they enjoy walking, playing, swimming, cross-country skiing, picnicking and all the other activities the town parks support," the group said in a statement. It listed some encouraging stats: Between 2000 and 2014, New York's high school youth smoking rate decreased by 73 percent to an all-time low of 7.3 percent of that population.

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