CVS snuffs tobacco companies

Earlier this month, CVS announced they will no longer carry tobacco products in their stores. This decision comes at a great cost for the company. Accounting for 3% of the company’s total profit, CVS brings in $2 billion annually from the sale of tobacco products. According to CVS CEO Larry J. Merlo, eliminating tobacco from their stores is in line with the company’s purpose of helping customers on their path to better health. But is this move to better brand image worth the cost? Sure CVS is a pioneer and is demonstrating that the company is on a righteous mission to promote the fact that they care about their customers’ health but they are doing this at the expense of 3% of their annual revenue. Do you think this move will help to strengthen the brand and ultimately increase sales enough to cover the lost revenue?  Do you think this strategy is sustainable? What other benefits or costs do you see could come out of this move? Do you think other companies will follow suit? What does this mean for tobacco sales? Is it ethical to cut out a certain product completely or could this be seen as discrimination?

No smoking.....anywhere!

Many cities and states have smoking rules for public places. Bars, parks and restaurants are among the most commonly regulated establishments. However, according to a recent article, the city of San Rafael has rolled out a more aggressive ban on smoking. In an effort to cut down on second hand smoke, city officials have enacted the nation's strictest smoking ban prohibiting residents from smoking cigarettes in their own homes.

The ordinance applies only to multiple family housing units – ones that share a wall including apartments, duplexes and condos. While many would find this to be beneficial to the community, others may feel as though their freedom has taken a shot. Some argue that the ban is too harsh, forcing people to quit cold turkey or leave their home. Is a smoking ban in private residences justified? Does this ban on smoking infringe on the freedom of residents in San Rafael? Comment with your thoughts on the issue.

Up in Smoke

New York’s city council voted this week to raise the legal age to buy tobacco products to 21. The reason for the change - NY Health Commissioner Thomas Farley says 80 percent of the city’s adult smokers start before age 21. Additionally, New York has set the minimum price of a pack of cigarettes at $10.50 and upped the fines for illegal and untaxed sales.  Mayor Michael Bloomberg argues that these measures will effectively decrease the use of cigarettes among 18-20 year olds.

We all know smoking causes cancer yet cigarettes are still a part of pop culture and are marketed to young people. Tobacco companies, although heavily regulated, look to appeal to a young, hip generation. Will these changes help to deter young people from smoking? What implications could this potentially cause for tobacco business? Do you think these new restrictions are fair for tobacco businesses? Will this new policy have an effect on tobacco advertising’s target market? Comment with your view on this ethical issue.

Banning of E-Cigarette Advertising?

Within the US, the advertising of tobacco products (cigarettes, cigarette tobacco, roll-your-own-tobacco and smokeless tobacco) on television was banned in 1971 (in the UK, the ban has been in effect for over 20 years).

Within the past couple of years, however, advertising of electronic cigarettes has boomed. The advertising of so-called e-cigarettes is currently unregulated. Print ad spending on e-cigarettes has increased approximately 72% from 2011 to 2012, while TV ad spending on the same has increased approximately 18%.

The Food and Drug Administration is expected to give opinions regarding the safety of e-cigarettes in October, 2013 and to suggest a ban on TV advertising as well as a ban of online sales of these devices. Online sales are expected to reach between $500 to $625 million this year (2013) with overall sales of e-cigarette reaching $1.7 billion by the end of 2013.

What are your thoughts on the potential banning of TV advertising of these products? Should there be an outright ban (similar to other tobacco products)? Should it remain unregulated? Should there be some rules regarding where and when on TV these e-cigarettes can be advertised? Please weigh in with your opinions and give your reasoning.

Making Tobacco Less Attractive. Literally.

We talked about how, in the U.S., labeling of cigarettes will change in September 2012.  The new labels will require one of the vivid health warnings to cover 50% of the front and 50% of the back of the cigarette package and to be in the upper 20% of each cigarette advertisement.  
 
There are new laws being considered in the UK that would prevent cigarette packages from being colorful and "glitzy."

This is one company's idea of what the packages could look like.  

Australia has already enacted a similar law that will take place in 2012.  "From July 2012, manufacturers would be required to drop all colour and branding logos from cigarette packets."

What are some of the positive points of these laws in the UK and Australia?  Negative points?

Bans

This week in class we discussed the marketing of tobacco products and how bans in certain areas is affecting the use of tobacco.  Today there was an article on how even electronic cigarettes are banned on airplanes (at least in the US). 

Another topic from this week was bottled water.  Carli sent me a few articles about bottled water being banned in certain areas.  There are cities that are banning bottled water.  Attempts have been made everywhere from Concord, MA to San Francisco.  There are a number of universities that are stepping forward and banning the sale of bottled water on their campus. A few that have already banned it are University of Portland, Seattle University, University of Vermont, and Washington University in St. Louis.  The University of Oregon is contemplating it. 

Would you be in favor of a ban on the sale of bottled water on USD's campus?  What might make it difficult?  How could the difficulties be overcome?

How would you feel about sitting next to someone on a plane who was smoking an electronic cigarette?

Smoke Gets in My Eyes

Tara J. brought this to my attention this morning.  Thank you!!  This is an excellent example of a marketing and public policy issue.

 
New York City Council bans smoking in public parks and beaches. NYC isn't the first city to enact a ban like this although it is the largest city to do so. 

It would certainly cut down on pollution (cigarette butts, air pollution, second hand smoke) but it would also cut into what some people consider a "right" in the great outdoors. 

What are your thoughts on it?