NYC versus tobacco: Three new smoking deterrents spark controversy

New York has long been unfriendly to smokers, particularly with the ban instituted in 2003. This year, however, a renewed effort to curb tobacco sales could translate to a negative financial impact on a city that has already felt the effects of downturns in media, finance and travel industries.

Several proposed new measures could increase the restrictions on smokers in New York -- but they may have a cost to taxpayers.

For anti-smoking advocates, the ban has been cause for celebration. The number of smokers in New York City fell from 21.5 percent of the population in 2002 to 16.9 percent in 2007.

The unintended consequence, however, is that those who continue to puff have had to find places where they can do so. Sidewalks, building entrances, parks and other public places have become preferred spots, irritating outdoor diners, sunbathers and many passers by.

To remedy this secondary effect, the Bloomberg administration has proposed a ban on smoking in parks and beaches.

If recent history is any guide, taking another location away from smokers will simply push them into the few remaining spaces. Sidewalks, benches and building entrances will become even more concentrated with smokers, until further legislative action is pursued.

At the same time, New York has pursued the fight on another front. This month, the city began to prohibit the sale (or free offer) of coffee and other nonalcoholic beverages by tobacconists, stating that they would need a food and beverage license to do so. Barclay Rex, a premium tobacconist with a store near the New York Stock Exchange, was fined for allowing customers to use a free coffee maker. Since then, tobacconists up and down Manhattan reacted by shuttering their espresso and coffee machines.

The third measure is broader in reach than the crackdown on coffee and push from the parks. The board of health is considering a regulation that would require any retailer with tobacco products to post photos of diseased organs and other effects of smoking.

The reaction at a hearing in late July was mixed, according to Ron Melendi, general manager of De La Concha, a tobacco retailer in midtown Manhattan. He recalls that there were many citizens supporting the measure, including a doctor who dramatically unfurled a long document listing the chemicals contained in cigarettes. Yet, an elderly woman, a nonsmoker, explained that she didn't want to see those images in her local grocery store.

"I feel like the city is trying to shut us down," Melendi said later of the smoking ban, coffee compliance and photograph efforts currently in progress.

He separates stores like his, which is owned by Davidoff USA, Barclay Rex and the other premium tobacconists in the city from convenience stores and other retailers that include cigarettes in a diversified product offering. "We specialize in cigars," he explained, "you come in here [referring to his store] understanding the product and the environment." Melendi is concerned that the warning photographs that may be required will detract from the ambiance and result in a revenue decrease.

Melendi is not the only person concerned. De La Concha's parent company, Davidoff USA, notes that a negative impact on sales in Davidoff's three Manhattan stores (there are Davidoff retailers on Madison Avenue and at Columbus Circle, along with De La Concha) would affect the city as a whole.

According to Davidoff USA's most recent tax filing, submitted on September 15, 2009 for the previous quarter, the three retailers paid $280,000 in sales taxes. This may be a mere rounding error for a city the size of New York, but it's money that would have to be replaced if the city's tobacconists' worst fears come true. Additionally, she says, Davidoff USA employs 21 people at its mid-town stores.

Of course, the premium tobacco industry is but a small part of the tobacco retail trade in New York, with cigarettes far more common and sold in many more locations. So, the triad of restrictions in progress reaches far beyond the employees and sales taxes of Davidoff and the cigar community.

On the anti-smoking side, health care costs are cited as more than counterbalancing the lost tobacco tax revenue, and there is a vocal majority that simply does not appreciate the smell.

The doomsday scenario that keeps tobacconists up at night -- being unable to remain in business -- does not seem like a near-term reality. But the measures currently being explored could very well squeeze demand and, consequently, sales.

For now, New Yorkers have to decide between smoking deterrents and tax revenues.

Tom Johansmeyer is a New York City resident and daily cigar smoker.

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