The Manhattan Times

Increased fee on selling cigarettes burns struggling bodegas

by Adam Garrett-Clark

At the Fort Washington Grocery & Candy Store on W. 181 Street and Fort Washington Avenue, manager Ali Mohmed deals in vices. Beer, cigarettes and candy: “this is my business,” he says.

Behind his counter, the nicotine addict has a universe of options: menthols, ultra lights, smoothes, and Virginia blends.

Mohmed’s customers can literally choose from 100 different cigarette varieties.

So when Mohmed went to renew his annual retail tobacco license with his accountant two weeks ago, he was shocked to learn that the fee would be 900 percent more than last year.

Mohmed said he expected things to go up, with the state’s budget deficit, but not 10 times what it used to be. Vendors who want to sell cigarettes in 2010 will now have to pay a minimum of $1,000, and as much as $5,000 depending on their gross sales from the previous year. For nearly two decades the retail registration fee to sell cigarettes and tobacco has been $100.

Angry, many bodega owners in Northern Manhattan are passively watching their ailing cigarette business hack up its final breaths. At the state level, nine associations including the New York Association of Convenience Stores (NYACS) have launched a campaign to pressure state politicians to amend the fee hike before the end of the renewal period, beginning September 20 to the end of the year. On its Web site NYACS claims it will pursue legal action if necessary to block the increase.

Dubbed “Operation Rollback,” the campaign’s Web site offers customized fliers, for bodega owners to download and hang in their stores, and form letters to send to local legislators.

But local politicians, the offices of both State Senator Eric Schneiderman and Assembly Member Adriano Espaillat, haven’t heard so much as a throat clearing from area merchants.

“We can not pay more from our pocket,” said Ramon Murphy, Harlem Bodega Owner and President of the Bodega Association of the United States, based in Inwood.

He said his organization has yet to join Operation Rollback’s efforts in pressuring politicians, because it is still formulating a persuasive alternative to offer lawmakers. Despite the large number of bodegas in Northern Manhattan, Espaillat said he stands behind the increase. “

Tobacco use is killing us, literally,” he said. “Anything that can be done to reduce the sale of tobacco, I think will translate into less illness, and I think that’s good for our economy.”

According to the New York State Division of Budget, the increase will generate additional revenue and serves the public health purpose of discouraging smoking.

“If you want to continue to smoke and get lung cancer you’ll have to pay for that,” Espaillat said.

Statistics on individual store profits are hard to come by according to the Tobacco Merchants Association Vice President Darryl Jayson. His organization collects and disseminates industry statistics worldwide. But Jayson said most owners have said that cigarettes are traditionally a top earner.

With an average markup of 12 to 15 percent, bodegas make a little over a dollar a pack – meaning a high volume of sales is the only way to justify such a pricey registration fee.

But most local bodega managers said they’ve seen sales drop considerably, making cigarettes less of an important item on their shelves, and convincing some to get out of the business completely.

Cousins Marina Caceres and Jose Arias who manage JJ’s Deli Grocery on W. 180th Street just off Broadway, have already stopped selling cigarettes. They now provide only two varieties of cheap cigars.

"It just wasn’t worth it," Caceres said.

For an investment of about $1,000 for 11 cartons of cigarettes and matches, she’d earn a little over $80.

“No vale la pena [its not worth the worry]”, she said.

The cousins said, now with the increase, they may very well discontinue the cheap cigars. The state won’t get its thousand-dollar fee but it won’t get its $100 either, Caceres said.

“Que van a vender en la calle, igual que marijuana [they’re going to start selling it in the streets, the same as marijuana],” Caceres said.

Ironically the 100 or so Dutch Master cigars, she sells each week are commonly split open, emptied of their filling and used to roll marijuana cigarettes known as “blunts.”

On W. 207th Street manager Felix Brisita of 207 Grocery Store is positive that the black market has already dipped into his waning cigarette sales.

“Selling cigarettes in the streets, that’s killing me,” he said. “I pay taxes, I pay employees, I pay rent.” Rubbing his bald head in frustration, Brisita said despite its low profitability, he can’t stop selling cigarettes.

“Sometimes yo no intiendo [I don’t understand] how the government thinks,” he said, wondering why now, when the economy is depressed, lawmakers are making things even harder on him.

Mohmed, working in the shop since 1993, has seen the steady decline in cigarette sales as well. Before the most recent tax increase, roughly six months ago, he was selling 60 to 70 cartons a week. Now it’s more like 30 to 40 cartons. He said he might be affected more than other stores since many of his customers can easily go over the bridge to New Jersey to get a cheaper pack. Or perhaps, Mohmed imagines, the politicians’ tax-tactic is working and his customers are simply smoking less.

If so “that’s good news for them,” Mohmed said, “and bad news for me.”

 The Manhattan Times is the bilingual newspaper of Washington Heights and Inwood.