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Smokers feeling the pinch of tobacco tax

Published 5:09pm Saturday, July 27, 2013

Area smokers and small businesses have noticed the effects of a $1.60 state tobacco tax increase that went into effect this month.

While stop-smoking programs have reported increased numbers of smokers looking to quit, some smokers appear to have simply avoided the tax by purchasing their cigarettes in other states.

“A lot of people have gone to Iowa to pay for cigarettes because they don’t agree to building a stadium that doesn’t have a smoking section,” said Ben Wilder, tobacconist at Austin Tobacco Shop.

Wilder said cigarette sales at the store have fallen to about 10 percent of what they were before the sales tax kicked in, while customers have turned to alternate tobacco products.

“The trends are people are turning to electric cigarettes, and rolling your own tobacco has taken off,” Wilder said.

ClearWay Minnesota, a nonprofit organization that aims to reduce tobacco use, has seen a 400 percent increase in traffic to its QuitPlan Services cessation program helpline compared to last year, according to a press release.

Nearly 2,500 Minnesotans visited their website in the first week of the new tax, and QuitPlan Services fielded nearly 400 additional calls on its hotline.

“Research from Minnesota and other states clearly shows that tobacco price increases are effective at helping smokers quit,” said David Willoughby, CEO of ClearWay Minnesota.

According to the American Journal of Preventative Medicine, the price of tobacco is the largest contributing factor to reducing smoking prevalence.

Officials say the price increase is also projected to save Minnesotans more than $1.65 million in longterm health care costs and prevent more than 25,700 premature smoking-related deaths.

Minnesota’s new tax of $1.60 per pack pushed the average price in Minnesota to approximately $7.50 per pack.

At Fallgatter’s Market in Northwood, Iowa, cigarette sales have gone up between $600 and $900 each week since the new tax went into effect, said Sarah Schumaker, office assistant.

“I’ve been having people come down and buy a carton or two,” said Johnna Emond, lead daytime cashier.

Emond said she has gone from ordering 40 to 45 cartons twice a week for the store to ordering 60 to 65 cartons — about 40 extra cartons of cigarettes each week.

Jackie Villela, cashier at Don’s Motor Mart in Lake Mills, Iowa, said she has also seen a slight increase in cigarette sales since the beginning of July, but estimated it was only about five or six extra cartons a week.

She said she has noticed customers from Minnesota who work in Lake Mills who have made an extra effort to buy their cigarettes while still in Iowa.

“We expect quite a bit more business in the next month or so,” Villela said.

That’s not good news for area businesses like the Austin Tobacco Shop, though Wilder said the store expected “a tremendous difference” in sales.

“It’s definitely affecting our small business,” he said.

—Trey Mewes and Sarah Stultz contributed to this story

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