RICHMOND, Va. —
In her original 2006 ruling, the judge noted that retail stores have become one of the "central vehicles for communication of brand imagery and promotional offers" and "create tobacco friendly environments containing enticing displays, competitive prices, and visible point-of-sale advertising." An appeals court sent the ruling back to the lower court to decide how to better address the rights of stores that sell tobacco products.
Nearly 40 percent of U.S. convenience stores' $190 billion in annual sales comes from tobacco products, according to the National Association of Convenience Stores.
Retailers who refuse to put up the signs could also lose millions they receive from tobacco companies under agreements that give stores rebates to help lower cigarette prices and payments for prominently displaying products. For example, the owner of 50 stores in Indiana that has an agreement with the nation's top three cigarette makers received nearly $1.8 million in payments in one year, in addition to free promotional displays and fixtures, according to court documents.
"You can't take up valuable selling space and impact my bottom line to achieve your goal of having these corrective statements out there," said Andy Kerstein, who operates five tobacco outlet stores in New Jersey. He is president of the National Association of Tobacco Outlets, which represents about 20,000 tobacco stores, convenience stores and other stores that sell tobacco.
Retailers estimate the industry could lose $82 million per year in sales for every square foot of counter space taken up by the signs. The public health groups, however, said that would average out to only about 65 cents per day per retailer, according to court filings.
"If the government and the legal system wants to do something to the tobacco companies, do it to the tobacco companies," said Larry Southard, who opened Papa's Healthy Food & Fuel in western Massachusetts in 2004. "I don't know why they'd take it to that level when there are so many laws in place, there's so much information (about the health impacts of smoking) already, what is the purpose? To punish the retailer now?"