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But many other smokers are fighting back by going online to find bargain
prices for cigarettes, a practice that is angering U.S. states, health
campaigners, traditional retailers and the big tobacco
companies themselves. Mueksch, 83, is still smoking all these years
later, but has cut back from a pack to half a pack a day, complaining
that U.S. taxes discount cigarettes online
have doubled prices in the last five years.
"It's no use; you can't fight City Hall," the California woman
said. "I am a second-class citizen."
"Cigarettes are an ideal product
for distribution through the Internet," said Ali Davoudi, founder
of esmokes.com and president of the Online Tobacco Retailers Association.
"The average person out there shopping for cigarettes online is
your average, hard-working blue-collar American, looking to save money
on a product that, for whatever reason, no matter what you say, is an
addictive product. They're addicted."
The savings available via the Internet may also prove to be addictive.
A carton of Marlboros from discount cigarettes online
CigOutLet.net in Switzerland costs only $15, postage included, whereas
the average cost of a 10-pack carton in the United States is $37. The
tab is even higher in New York City, where smokers pay more than $3.50
a pack just in taxes, which can mean a full-retail price tag of $75
a carton.
U.S. smokers are catching on to the savings. Forrester Research estimates
Internet cigarettes sales will be $5 billion in 2005, more than double
what is expected this year. That means states could lose $1.4 billion
in tax revenue, the study found.
Big tobacco companies, state and federal governments
and health advocates are up in arms about this flourishing corner of
the Internet and are launching an ever-growing legal assault.
California, the latest to enter discount cigarettes
online
the fray, this month sued five online and out-of-state cigarette vendors,
accusing them of costing the state $54 million in lost tax revenue and
of selling to minors.
"It is substantial and growing," state Attorney General Bill
Lockyer said in an interview. "In California we do surveys of kids
to find out where they are getting cigarettes, and the number of illegal
purchases is growing."
States are fighting back, and courts are seeing many cases like the
one filed by California against online tobacco.
In January, New York City sued several Web sites for
evading the city's steep taxes, and a number of states have also taken
legal action. As of March, Philip Morris had filed 18 lawsuits against
Internet retailers, and it has sent warning letters to 80 others. "We
estimate that about 20 percent of minors are purchasing illegally, and
the revenue lost to state and local government is fairly substantial
... there is no discount cigarettes online
effort, on delivery, to check identification or age, or getting someone
to sign for the delivery."
Current rules leave it up to the buyer, not the retailer, to pay state
sales tax on online cigarettes. Few do.
"The Internet is a boon to us all," said Ray Domkus, 58, a
discount cigarettes online store semi-retired auto worker in Burbank, California, who has smoked for
40 years. "We don't want to pay the high taxes that the states
want us to pay."
"Many of us are on fixed incomes and I would say a good half of
us are buying from out of state," said Domkus, who is also head
of a California smokers rights group.Philip Morris says discount cigarettes
online
it has surveyed 500 sites selling online cigarettes to American customers
and found that not a single one complies with basic standards (news
- web sites) of tax reporting or safeguards against sales to minors.
"Overall, the number of people purchasing (Internet) cigarettes
is still relatively small, but growing at a rather alarming rate,"
said Tom Ryan, a Philip Morris USA spokesman. "Alarming, I say,
because much of that growth is based on illegal sales."
"The long-term effect is decidedly negative on our business," discount cigarettes online store
said Ryan, whose company controls 62 percent of the name-brand U.S.
cigarette market. "We have invested enormous resources of our own
into the legitimate distribution of our products."
The Online Tobacco Retailers Association said such
complaints are based on fears of shrinking market share. Online sales
are one factor helping little-known discount brands get to market, much
to the annoyance of big tobacco, Davoudi said.
"We are not out there selling a product that is illegal,"
he said. "It's a product that for whatever discount cigarettes online store reason, yes, is discount
cigarettes online
damaging, but it is a legal product."
Philip Morris says discount brands now have a market share of 10 percent,
up from only 3 percent in 1997.
Davoudi also discount cigarettes online said his group's
members refuse to sell to anyone younger than age 21. "We have
a much better, much more reliable way of making sure that cigarettes
get into the hands of adults," he said.
"There is nothing you can do to prevent a kid from walking up to
somebody standing outside a store discount cigarettes online store and saying 'Here's 10 bucks, buy me
a pack of cigarettes and you keep the change."'
