Are convenience stores real tobacconists? That is the question that convenience store owners and the cigar industry have to ask themselves. Especially in Western Europe, dry-cured short fillers are popular. And many of them are sold in convenience stores, petrol stations, and supermarkets. And because of that, cigars are lumped In with cigarettes when it comes to legislation. Our answer to that question is no. Convenience stores are not real tobacconists, only a small minority of them have a passion for tobacco.
A few weeks ago, a petition was opened in The Netherlands to find support against further legislation of those convenience stores. The argument is that those shops, 1500 in total in The Netherlands, have a social function as well. That’s a fair argument, but does that social function need to include tobacco? The issue is that those convenience stores sell everything, including items for children. And the new legislation is focussed on hiding tobacco products from minors. So it’s time to make hard choices for retailers and the tobacco industry.
Make a choice!
What the tobacco industry should do is quite simple. Stop supplying supermarkets and petrol stations say per July 2020. So tobacco is only sold through real, specialized tobacconists and those convenience stores. And then tell the convenience stores that they have two years to make up their mind. Either become a real tobacconist or stay a convenience store but without tobacco. Two years is enough time to see if they have a future as a real tobacconist, or that they see more in the convenience store concept without tobacco. Make a choice, do you want to sell candy, magazines, and books, or do you want to sell tobacco in all forms, from cigarettes to pipe tobacco, and all kinds of cigars.
It is time for the retailers and the industry to take a stand. To make hard choices, To show a vision for the future. Because right now, it’s heading nowhere. Convenience store owners complaining in a Dutch newspaper that they can only survive on lottery tickets might get them a little sympathy, but it’s a result from politicians, retailers and the tobacco industry not ballsy enough to make a visionary decision on the future of tobacco in retail channels.
Convenience or tobacconist?
Most of the tobacco products sold in supermarket and petrol stations are cigarettes and roll your own tobacco. Plus mass market cigars, either with or without flavoring. Products as Break and Gold from Scandinavian Tobacco Group, Panter and Meharis from Royal Agio, Al Capone and Moods from Ritmeester. From these, Break is the worst as they look like cigarettes due to the packaging and the filters. Those products are also very popular in convenience stores, together with the more traditional dry-cured, machine-made short fillers. And its companies like STG, Agio, and Ritmeester that have to show vision and courage. Sink in the swamp, or make a hard choice to cut loose the turnover from the supermarkets and convenience stores. Invest more in real tobacconists to secure a future without further nanny state regulations that endanger the whole tobacco industry. Smaller manufacturers such as De Olifant already made that choice in the past, they only supply 250 accounts in The Netherlands, most of them real tobacconists.
But they are not the only ones. Most convenience stores are franchisees. They are part of a cooperation organization such as Primera, Tabac & Gemak, Cigo, and Vivant. Those organizations are not focussed on just tobacco, even though that was once their main product. They strayed away from the core business. They need to make a hard choice too, is their brand going to be a real tobacconist brand or a convenience store brand? Or maybe they should have both, one convenience store concept without tobacco and one tobacco concept without convenience products? For cooperations such as Compaenen in The Netherlands and John Aylesbury in Germany, that’s easier. They have always focussed on the real tobacconist concept.
The future after the choice
If these choices are made, the total number of points of sale will drop from 30.000 in The Netherlands to less than 2000 in the first shift. And depending on how many convenience stores will transform into real, specialized tobacconists to less than 1000. Then it’s up to the politicians to protect those retailers by installing a tobacco license. And within that license, a certain perimeter should be included. Within that area, no other tobacconist is allowed to open. Of course, existing tobacconists are grandfathered in. And it should be regulated that only 18+ items can be sold in those shops. Lottery tickets, tobacco, and possibly alcohol but no candy, no magazines. It should also not be allowed to act as a post office, information center, etcetera. Children should not be allowed in.
If the cigar industry, retailers and politicians get behind this, everybody wins. The cigar industry won’t be hit with more legislation. Retailers that become tobacconists will be protected by a license and see unfair competition from supermarkets disappear. And the politicians get their way as well, lesser points of sale and minors can’t see tobacco in retail anymore. But again, the cigar industry and the retailers should grow some balls and a vision. If they don’t get behind this or show another vision, everyone will lose in the end. The current situation isn’t sustainable.
edit: this opinion piece was written before STG and Royal Agio dropped the bomb last week.