Vendors Take Aim at Vulnerable Smokers

TWO Arizona companies are now manufacturing vending machines that dispense single cigarettes for 25 cents apiece.

A third company, based in Minnesota, has made a "prototype" that has been sold in Mexico and states that do not prohibit the sale of single cigarettes.

The new machines have quickly attracted the attention of anti-tobacco groups. On April 8, the Coalition on Smoking or Health wrote Donna Shalala, secretary of Health and Human Services, complaining about the new machines.

In the letter, the group argues: "These cigarettes may not only be accessed by minors but they will also be affordable."

California, Oklahoma, Connecticut, Florida, Idaho, Maine, Michigan, Rhode Island, and South Dakota currently ban the sale of loose cigarettes.

Scores of local municipalities, including New York City, have passed similar laws. However, most of these laws were enacted to prevent "mom and pop" convenience stores from selling individual cigarettes out of paper cups.

The tobacco industry has not opposed legislation banning the sale of individual cigarettes. In testimony on Dec. 17, 1991 before the Health Committee of the New York City Council, Brennan Dawson, a spokeswoman for the Tobacco Institute, the industry's lobbying arm, said the institute was not against a law banning the sale of single cigarettes.

"In fact, federal law makes it virtually impossible for retailers to sell single cigarettes," Ms. Dawson stated.

The original machines were produced by Uni-Cig and distributed by a Phoenix company, Uni-Vend. These machines held up to 90 cigarettes in each of their three compartments. The cigarettes were not individually wrapped or marked with federal warnings.

This violated federal law which states that all cigarettes must be sold in "proper packages which bear the marks and notices required of the regulations," and remain in the packages until removed by the customer or in the presence of the customer.

Uni-Vend has recently redesigned the machine, however. "The old one was illegal," says Jim Emery, one of the principals in the company. The new cigarettes, he says, are now individually wrapped and marked.

It is unclear if the new machines fulfill federal regulations. A press release issued by the Bureau of Alcohol, Tobacco and Firearms on Dec. 17, 1991, states: "Individual cigarettes must remain in their original packages until they are removed from the package by the customer or in the customer's presence."

All cigarette packs carry a stamp indicating state and federal taxes have been paid. The federal tax is 20 cents a pack, while state taxes range up to 51 cents a pack. The issue is what constitutes an original package. It is also unclear how companies can prove they paid federal and state taxes unless they put a tax stamp on each cigarette.

Mr. Emery says Uni-Cig and Uni-Vend have split up. Uni-Vend is now suing Uni-Cig for violating Uni-Vend's patent on the new machines, he says.

In a phone call to Uni-Cig a woman who refused to identify herself confirmed that the company was now selling the new machines. But she declined to say where the machines were being sold.

Uni-Vend aggressively marketed its illegal machines. In a brochure it describes how the machines reach such "key consumers" as social smokers ("Consumers who smoke only when they drink"); "bum" smokers, defined as people who only have $10 in their pockets when they go to a bar ("The longer the bum smoker has money, the longer he'll drink"); smokers who are trying to quit; and smokers who are too lazy to walk to their car for another pack.

To entice potential buyers, Uni-Vend asks: "How much money can you make?" It then suggests the answer is a lot.

The cigarettes retail for 25 cents each. Uni-Vend estimates the products cost 7.5 cents each, leaving a gross profit of 17.5 cents a cigarette.

Uni-Vend estimates a single machine with high traffic could make $600 a month and one with only good traffic would make $300 a month.

The Minnesota manufacturer, Edina, is more cautious. The company has sent out letters to states and municipalities asking "Would your city allow vending machine sales of individual unwrapped cigarettes from a bulk vend (loose like gum balls) situation?"

Dallas Humphrey, a principal in the company, says the firm has done "an extensive search" of federal and state laws. He adds that the company was coming to the decision that "we can't do full development until we get samples of packaged cigarettes."

Mr. Humphrey says his company is now at a "dead standstill," waiting for wrapped products. He declined to identify the buyer of his company's prototype machines or where they are in use.