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Research & Commentary: New York City Menthol Ban Would Create Black Markets, Not Reduce Smoking Rates

November 7, 2019

Lawmakers in New York City are seeking to ban the sale of menthol cigarettes.

A proposed local law in New York City (NYC) would ban the sales of menthol cigarettes. Int. No. 1345 “would ban the sale of menthol, mint, and wintergreen flavored cigarettes.” The ban would only apply to menthol cigarettes as the U.S. Food and Drug Administration “banned cigarettes with characterizing flavors other than menthol” in 2009. The sponsor of the legislation considers menthol cigarettes a “diabolical product” and claims that flavored tobacco products attract youth because they “are [supposedly] easier to smoke and seem less dangerous than regular cigarettes.”

Although addressing youth use of tobacco products is laudable, a ban on menthol cigarettes is unnecessary, as youth combustible cigarette use is at an all-time low. Moreover, a menthol ban would only restrict adult access, create black markets, and further strain law enforcement’s resources as they force compliance of the ban.

Lawmakers should be aware that youth smoking rates are already at historically low levels. According to the Centers for Disease Control and Prevention’s 1998 Morbidity and Mortality Weekly Report, in 1997, 36.4 percent of high school students reported using combustible cigarettes in the 30 days preceding the survey. Results from the 2018 National Youth Tobacco Survey concluded that only 8.1 percent of high school students had reported using tobacco cigarettes. This is a 28.3 percent decrease. Further, total tobacco product use is also significantly lower than 1990s levels, from 42.7 percent in 1997 to 27.1 percent in 2018.

Nearly one-third of adult cigarette smokers smoke menthol cigarettes. In a 2015 survey from the National Health Interview Survey, “of the 36.5 million American adult smokers, about 10.7 million reported they smoked menthol cigarettes.” Further, white menthol smokers “far outnumbered” black and/or African American smokers, with 61 percent of menthol smokers identifying as white.

Moreover, menthol bans are unlikely to reduce adult cigarette use. A 2015 study published in Nicotine & Tobacco Research noted that only 28 percent of menthol smokers would give up cigarettes if menthol cigarettes were banned. Additionally, a 2012 study in the journal Addiction concluded that a quarter of menthol smokers surveyed reported they would find a way to purchase, even illegally, menthol cigarettes, should a menthol ban go into place.

Public officials and law enforcement are already acutely aware of the immense black market for tobacco products, especially combustible cigarettes, in NYC. The Tax Foundation called the Big Apple “the smuggling capital of the US.” The Tax Foundation was able to determine that New York state “is the highest net importer of smuggle cigarettes, totaling 56.8 percent of total cigarette consumption in the state.”

The already existing black market for illegal cigarettes is big business in the Empire State. In late 2018, New York officials reported the state’s attorney general had charged “17 individuals with smuggling 18 million cigarettes into the city, evading $3 million in taxes.” Further, NYC recently filed a lawsuit “against the U.S. Postal Service to stop tens of thousands of cigarette packages from being mailed from foreign countries to U.S. residents.” In their suit, officials claim NYC and New York state lose more than $21 million in tax revenue each year, due to foreign cigarettes.

Moreover, a ban on menthol cigarettes would require law enforcement to expend even more of their limited resources on enforcing a menthol ban and will likely lead to racial repercussions. Although white Americans smoke more menthol cigarettes than black or African Americans, “black smokers [are] 10-11 times more likely to smoke” menthol cigarettes than white smokers.

Given African Americans’ preference for menthol cigarettes, a ban on menthol cigarettes would force police to further scrutinize African Americans and likely lead to unintended consequences. Lawmakers in NYC should reexamine the case of Eric Garner, a man killed while being arrested for selling single cigarettes in the city. In a recent letter to the NYC council, Garner’s mother, as well as Trayvon Martin’s mother, implored officials to “pay very close attention to the unintended consequences of a ban on menthol cigarettes and what it would mean for communities of color.” Both mothers noted that a menthol ban would “create a whole new market for loosies and re-introduce another version of stop and frisk in black, financially challenged communities.”  

Policymakers have also linked menthol cigarettes to youth tobacco use, yet there is not consistent information to determine that children are specifically attracted to menthol cigarettes. Children of smokers are twice as likely to pick up smoking. Research also reveals tobacco brand awareness among youth is increased among children with parents who smoke cigarettes. It is highly probable most youth begin smoking the same brands their parents and/or social peers prefer.

Lawmakers should also remember some smokers seeking menthol cigarettes can create their own menthol-flavored cigarettes. Those seeking to make their own menthol cigarettes can easily look to the Centers for Disease Control and Prevention for instructions on how to mentholate their cigarettes, which involves the use of menthol crystals and takes about three days to complete.

Rather than imposing a ban on menthol cigarettes, lawmakers in the Big Apple should allocate more of existing tobacco moneys to tobacco control. A ban on menthol cigarettes is unlikely to reduce cigarette use among adults and youth, would lead to an even bigger black market, and would likely create unintended interactions among police and African Americans that could lead to even more unnecessary violence.

The following documents provide more information on smoking and flavor bans.

Want More Black Markets and Less Revenue? Move Forward with Menthol Bans
https://townhall.com/columnists/lindseystroud/2019/04/25/want-more-black-markets-and-less-revenue-move-forward-with-menthol-bans-n2545393
In this opinion piece featured in Townhall, the Heartland Institute’s State Government Relations Manager Lindsey Stroud examines the rationale behind proposed menthol cigarette bans finding such prohibitions are unlikely to reduce cigarette consumption and will lead to even larger black markets for tobacco products. Stroud implores policymakers to divert additional funding to tobacco control programs nothing that in fiscal year 2019, the states received an estimated $27.3 billion in revenue from tobacco settlement payments and taxes. However, they only spent $655 million, or 2.4 percent of this funding “on programs to prevent kids from smoking and help smokers quit.”

Cigarette Taxes, Black Markets, and Crime: Lessons from New York’s 50-Year Losing Battle
http://heartland.org/policy-documents/cigarette-taxes-black-markets-and-crime-lessons-new-yorks-50-year-losing-battle
Patrick Fleenor examines New York’s half-century battle with cigarette black markets and related crime, documenting consumer responses to tax increases and discussing law enforcement and policy efforts to curb the negative side effects of high cigarette levies. Finally, he discusses national and international experiences with cigarette taxes and finds New York’s experience is typical of jurisdictions levying high cigarette taxes. 

Cigarette Taxes and Smuggling: A Statistical Analysis and Historical Review
http://heartland.org/policy-documents/cigarette-taxes-and-smuggling-statistical-analysis-and-historical-review
The authors of this study consider cigarette smuggling from two angles. First, they employ a statistical model to estimate the degree to which cigarette smuggling occurs in 47 of the 48 contiguous U.S. states. Second, they review the historical experiences of three states—Michigan, New Jersey, and California—known to have problems with cigarette smuggling. The authors’ findings suggest state policymakers should reassess the value of cigarette taxes as a revenue and public health tool.

10 Principles of State Fiscal Policy
http://heartland.org/policy-documents/ten-principles-state-fiscal-policy   
This Heartland Institute booklet provides policymakers and civic and business leaders with a highly condensed yet easy-to-read guide to state fiscal policy matters. It presents the 10 most important principles of sound fiscal policy, from “Above all else: Keep taxes low” to “Protect state employees from politics.”  

Research & Commentary: Top 10 Reasons Not to Raise Tobacco Taxes
http://heartland.org/policy-documents/research-commentary-top-ten-reasons-not-raise-tobacco-taxes   
John Nothdurft of The Heartland Institute argues targeted tax increases serve only to push sound fiscal policies and real budget reform solutions to the public policy backburner. Legislators concerned about the public health effects of tobacco should encourage the use of readily available smoking cessation products and services instead of supporting bad tax policy.  

Cigarette Taxes and Smoking: Will Higher Taxes Yield a Public Benefit?
http://heartland.org/policy-documents/cigarette-taxes-and-smoking-will-higher-taxes-yield-public-benefit  
Kevin Callison and Robert Kaestner of the Cato Institute summarize their study focusing on the effect of recent, large cigarette tax increases on smoking among adults ages 18–74. The data suggest the association between cigarette taxes and smoking is small, negative, and usually not statistically significant. 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Budget & Tax News website, The Heartland Institute’s website, our Consumer Freedom Lounge, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Heartland’s government relations department, at governmentrelations@heartland.org or 312/377-4000.

Author
Lindsey Stroud is a state government relations manager at The Heartland Institute.
lstroud@heartland.org

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