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California looks to ban tobacco product discounts after state's recent $2-a-pack tax hike

A shop owner sells a pack of cigarettes to a customer in San Francisco.
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A shop owner sells a pack of cigarettes to a customer in San Francisco.

A California lawmaker has proposed a statewide measure to ban retailers from accepting coupons that lower the price of tobacco products.

It follows California this month more than doubling the tax on cigarettes.

The legislation, proposed by California Assemblyman Kevin McCarthy (D-Sacramento), would prohibit the redemption of all coupons and promotional discounts for tobacco products.

"California has led the nation in its fight against tobacco by enacting some of the strongest anti-tobacco laws on the books," said McCarthy in a release. "Sadly, the tobacco industry continues to trick customers into becoming long-term addicts by artificially lowering the price of tobacco products."

McCarthy's release said similar legislation to ban coupons and promotional discounts on tobacco have already been introduced in New York State. Also, certain local jurisdictions have enacted bans, including New York City, Chicago, Berkeley and San Jose.

California voters passed a measure in November to hike the cigarette tax by $2 a pack, up from the earlier 87-cent tax. The hike was meant to discourage people from smoking by raising the price of cigarettes.

But some cigarette companies responded to the $2.87-per-pack tax by offering discounts, the New York Times reported this week. Specifically, it said the company known for Marlboro brand cigarettes, Philip Morris, notified customers by email of a special discount involving three coupons.

"Finding ways to prevent Big Tobacco from undercutting California's recent tobacco tax increase such as prohibiting coupon redemption and multi-pack offers will go a long way to reduce tobacco use and tobacco-related disease, including cancer," Jim Knox, California vice president of the American Cancer Society's Cancer Action Network, said in a release.

CNBC reached out to Altria, parent of Philip Morris USA, for comment.

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