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Post date: February 13 2002

Spitzer Announces Settlement With Walgreens Over Selling Tobacco To Minors

Attorney General Spitzer announced today that Walgreens, the nation's largest drug store chain, has agreed to make sweeping changes in its operations as part of a settlement to prevent the sale of tobacco products to minors.

The settlement includes compliance checks done by an outside company, aggressive training and disciplining of employees, and use of checkout registers which prompt employees to check identification.

In 2000, Spitzer's office conducted undercover investigations of retail outlets throughout the state to determine whether the stores were complying with state laws which prohibit the sale of tobacco products to anyone under the age of 18.

Of the chains targeted, Walgreens had the worst record with a failure rate of over 90%. Following the release of the results, a multi-state group of attorneys general initiated negotiations with several of the national targets, including Walgreens. Today's settlement covers New York and 39 other states.

"As both Attorney General and the father of three girls, I find the statistics on children who smoke frightening- each day, more than 5,000 children try their first cigarette and 2,000 others become regular daily smokers," said Spitzer. "About half of all children who smoke usually buy their own cigarettes. That's why it's critically important that supermarkets and convenience and drug stores throughout New York do a much better job of obeying and enforcing the law. It's their duty and their responsibility. My office will continue to do everything it can to try and keep cigarettes and other tobacco products out of the hands of our kids."

In settling the case, Walgreens agreed to treat sales of tobacco to minors as it does underage alcohol sales. Among the specific corporate policies and business practices agreed to by Walgreens are the following:

  • Hiring and paying for an outside firm, approved by the states, to do compliance checks at hundreds of randomly-selected stores throughout the nation every six months. Walgreens must meet a 90% compliance standard for two consecutive six month periods, otherwise the external checks will continue. The company will also utilize security cameras at cash registers to monitor tobacco sales by employees who have sold to minors;
  • Minimizing the involvement of minors in positions that include the sale of tobacco products;
  • Implementing an aggressive and periodic employee training effort, including a review of: relevant laws and corporate policies, various tobacco products sold at Walgreens' retail stores, and legally acceptable personal identification for tobacco purchases;
  • Dismissing employees or providing additional immediate training of employees in the event of a sale to a minor or a failure to pass internal or external compliance checks;
  • Using computer registers that prompt the employee to obtain and enter positive identification information;
  • Posting signs indicating that individuals must be 18 to purchase tobacco and that identification is checked for anyone who appears under the age of 27; and
  • Requiring managers to closely supervise compliance and to report any violations to corporate headquarters.

In response to the settlement, Michael Seserman, the New York State Director of Tobacco Control for the American Cancer Society said, "Approximately 250 children start smoking in New York each day, and one third of them will eventually die prematurely from smoking-related diseases. Today's announcement sends a message to all retailers across New York State that they just can't sell cigarettes to our kids with impunity."

A 2000 Supreme Court decision ruled that the U.S. Food and Drug Administration lacked authority to regulate sales of tobacco products to minors and therefore prevented the F.D.A. from coordinating a national effort to diminish youth access to tobacco.

The decision highlighted the importance of state enforcement efforts in educating the public and encouraging retail vigilance. Although New York state law provides substantial penalties for sales of tobacco products to minors, the law addresses only isolated violations in local businesses and does not address the overall need for company-wide reforms aimed at preventing such sales from occurring in the first place.

Spitzer noted that the states are continuing their negotiations with other national retailers. "Today's settlement is part of our continuing effort to keep cigarettes out of the hands of children. The states' 1998 settlement with Big Tobacco snuffed out Joe Camel and banned advertising aimed at children. We expect today's settlement with Walgreens to set an example for all other retailers."

In settling the case, Walgreens will pay $320,000 to the states to cover the costs of the investigation. Walgreens has 52 stores throughout New York (see attached).

States joining New York in this settlement are: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, New Mexico, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

The case was handled by Assistant Attorneys General Melvin Goldberg and Leslie Neustadt of the Consumer Frauds and Protection Bureau.