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Commentary: The CVS Tobacco Ban

11 Feb 2014

Last week CVS (NYSE: CVS) made big news when it announced they would no longer be selling tobacco products in their drug stores. The decision itself doesn’t have direct implications on premium handmade cigars, but it does raise some issues that should be of interest to all smokers.


First off, let’s recognize that this is a very significant decision for a corporation to make. The company sells $1.5 billion worth of tobacco every year (presumably with a healthy profit margin), which probably is why the stock dropped the day of the announcement. Any time a company eliminates over 1% of their total revenue (more when you look at total estimated revenue losses) with nothing to replace it, it’s a big deal.

This isn’t the first time a business has made a decision to go anti-tobacco, but I can’t think of another decision that cuts into the bottom line so obviously. Local bars and restaurants go smoke-free all the time before laws dictate they have to, so have national hotel chains and Starbucks, which now forbids smoking even in outdoor areas.

But none of those decisions so obviously impact the bottom line. Sure, I go to Caribou Coffee now instead of Starbucks when I want to sit outside and smoke a cigar with some coffee, but it’s not nearly as apparent to shareholders that my revenue is lost in the way that cigarette sales at CVS are now gone because, as the CVS CEO puts it, “We came to the decision that cigarettes and providing health care just don’t go together in the same setting.”

First off, let’s recognize that businesses are free to make their own decisions, though a public company does have to answer to shareholders. There’s nothing inherently wrong about CVS deciding not to provide cigarettes in the same way that a government prohibition in allowing smoking smoking does infringe on the rights of a business owner to choose to provide a customer something he or she wants (in this case a place to smoke).

But let’s not glance over the hypocrisy either. CVS still sells plenty of products that contribute to the overall bad health of our society (even before you dig into the overuse of over-the-counter and prescription drugs). Potato chips, candy bars, and soda, not to mention beer and wine, all will presumably keep being sold at CVS.

Take a look at the obesity, diabetes, etc. that this country faces, and it’s clear that CVS has singled out one product among many unhealthy things. People are already noticing this hypocrisy, even if they don’t realize that it’s likely because anti-smoker discrimination is far more acceptable than other types of judgmental discrimination.

Still, perversely, if CVS’s move catches on, it could end up helping the independent cigar shops that often carry, though hardly emphasize, cigarettes. Until CVS’s competitors like other drug stores, grocery stores, and 7-11-style convenience stores take the same approach, it will just hurt CVS’s bottom line to the benefit of those who don’t go along. If it ever does catch on more widely, specialty tobacconists will be there to sell cigarettes to smokers, along with the premium tobacco products they currently focus on selling.

And that’s the beauty of the free market. Paternalistic types can bully businesses around, but as long as some businesses are free to cater to adults who choose to enjoy tobacco products, they only open up more opportunities for those who celebrate, or at least don’t moralize about, the freedom to choose to smoke.

-Patrick S

photo credit: Flickr

Drew Estate