Smoke shops running low on Phillip Morris cigs

Tulsa, Oklahoma (AP) 4-08

The nation’s largest tobacco company is limiting the amount of premium-brand cigarettes it sells to some tribal smoke shops, a move that may force the Muscogee (Creek) Nation to enter a tobacco compact with the state.

A contract policy by Philip Morris USA is reducing the amount of cigarettes it sells to retailers who in turn sell those cigarettes to other retailers.

Creek Nation smoke shops do not have a tobacco compact with the state and have been selling low-tax cigarettes shipped to them by Cherokee and Osage stores along the Oklahoma border.

The low-tax cigarettes come with a 6-cent tax stamp and are meant to be sold along the Oklahoma border so the stores can compete against states with a lower tax rate.

Nontribal stores must purchase cigarettes with a $1.03 tax stamp.

When the Philip Morris USA contract requirement became active at the end of March, some smoke shops licensed by the Creek Nation started running low on premium-brand cigarettes such as Marlboro, said Dana Johnson, tax commissioner for the tribe.

“It will affect our supply,” Johnson said. “My shops are resourceful; it won’t put them out of business, but it will have an effect on sales.”

Philip Morris USA is the nation’s largest tobacco company, making up more than 50 percent of the retail cigarette market share.

Johnson told the Creek Nation’s National Council in March that the policy by Philip Morris would make it difficult for the tribe to continue to buy premium-brand cigarettes with the 6-cent tax stamp from other tribal stores.

“The only way we can get around what (Philip Morris) ... is doing is to enter into a compact with the state so we can buy directly from the wholesalers,” Johnson said.

The National Council likely will be presented a compact for approval at its April meeting; the compact then would be sent to the Governor’s Office, Johnson said.