COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COUNCIL COMMITTEE ON PUBLIC HEALTH & HUMAN SERVICES - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, May 5, 1998 10:28 a.m. - - - BILL NO. 960367 - An ordinance amending Title 9 of The Philadelphia Code entitled "Regulation of Business, Trades and Professions" by adding a new chapter prohibiting cigarette vending machines and providing penalties. PRESENT: COUNCILWOMAN MARIAN B. TASCO, Chair COUNCILWOMAN ANNA CIBOTTA VERNA COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN HAPPY FERNANDEZ COUNCILMAN ANGEL ORTIZ COUNCILMAN RICHARD T. MARIANO COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 I N D E X TEACH Representatives: Dr. Jeffrey Barg, Chair. . . . . . . . . . . Mary Tracy, Program Associate. . . . . . . . 6 Elena Patterson, teen volunteer. . . . . . . 19 Joe Hagarty, teen volunteer. . . . . . . . . 20 7 Donnell Whitmore, teen volunteer . . . . . . 21 8 9 Michael Savar. . . . . . . . . . . . . . . . 32 Penn Triple S Vending 10 11 L&I Representatives 12 John P. Campbell . . . . . . . . . . . . . . 79 13 Legislative Regulatory Affairs Manager 14 Rudy Paliaga . . . . . . . . . . . . . . . . 82 Director, Business Regulatory Enforcement Program 15 Dr. Lawrence Robinson. . . . . . . . . . . . 88 Philadelphia Deputy Health Commissioner Dr. Steven Gambescia . . . . . . . . . . . . 93 American Heart Association Dr. Bob Sklaroff (and son) . . . . . . . . . 106 President of the Pennsylvania Society of Internal Medicine, the America Cancer Society 3 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 P R O C E E D I N G S
Good morning. Council's Committee on Public Health and Human Services is reconvened to continue the hearing on Bill No. 960367. And would the clerk like to -- well, I'll just read the ordinance as what we're hearing, okay? The ordinance amending Title 9 of The Philadelphia Code entitled "Regulation of Business, Trades and Professions" by adding a new chapter prohibiting cigarette vending machines and providing penalties. The Council of the City of Philadelphia hereby ordains Title 9 of The Philadelphia Code entitled "Regulation of Business, Trades and Professions" is hereby amended by adding a new Chapter 9-2000 to read as follows. . . The chair now recognizes Councilwoman Fernandez, who is the sponsor of this bill, who will give a background and bring us up to date on where we are.
Thank you, Madame Chair. 4 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 This bill was introduced, and we had some initial hearings two years ago. And this bill is in the Health and Human Services Committee because this bill addresses a serious health problem among our children. We were here two years ago and held some hearings. The bill was not reported out of committee but held pending further information. In those two years, we're all aware that at the federal level, there was an agreement between the tobacco companies and the attorneys general to clearly address the tobacco products as a serious health problem in our country. And part of that settlement or agreement included a total ban on cigarette vending machines throughout the country. So I have not asked for hearings back on this bill since I was hopeful that at the federal level, they would address this issue and we would not have to take action with a local ordinance. However, as we know, at the federal level, that settlement seems to be going nowhere. It is either falling apart or seriously delayed. 5 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 So we felt it was very important, in light of the information that we are gathering here on the local level, to hold hearings and get this bill out of committee, voted on by Council, so it can become law in the City of Philadelphia. In the two years since we held our initial hearings, there has been some good news in efforts to tackle tobacco use by our young people and access to tobacco products. Over these two years, an organization called "TEACH" (Tobacco-Free Education and Action Coalition for Health) has been working very closely with City officials to implement a law that this Council passed several years ago. The law that Council passed made it more difficult for young people to illegally purchase cigarettes and other tobacco products by tightening the law and getting some real teeth in the law so that it could be enforced and to prevent young people -- minors -- from illegally purchasing tobacco. That law that Council passed required that all tobacco products be behind the 6 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. D. if they appeared to not be over years of age. 5 And it also made provisions for clear signage 6 and clear penalties for store-owners who 7 illegally sold tobacco products to young 8 people. 9 Due to the work of TEACH, 10 hand-in-hand with License and Inspections, we 11 have been able to fairly dramatically reduce 12 the percentage OF times that young people are 13 able to illegally buy tobacco in this city. 14 When the bill was passed, 85 percent 15 of the time, young people in this city were 16 illegally able to purchase cigarettes and other 17 tobacco products in stores. Those numbers have 18 now been reduced to 50 percent. That is still 19 way too high of a percentage, but progress is 20 being made. 21 What we are finding here at the local 22 level, however, and the reason I'm bringing 23 this bill back up is that a big loophole, as we 24 try to prevent young people from illegally 25 getting access to tobacco products, is the fact 7 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 that they are so readily available through cigarette vending machines in this city. The figures from TEACH young people who have been doing surveys show that 85 percent of the time, young people in this city are able to illegally purchase cigarettes from cigarette vending machines. And what is most tragic is too often, it's our very young children -- ages 10, 11, and -- that are 11 using cigarette vending machines to get access 12 to cigarettes. So these hearings today will call for hearings on a bill to totally ban cigarette vending machines in the City of Philadelphia. We need to close the loop and make it very, very difficult, if not impossible, for kids to be able to get their hands on cigarettes.
And what we are suggesting is we should not make cigarettes as readily available as candy and gum and soda pop to our young people through vending machines. So with that background, Chairwoman Tasco, I hope this committee can hear the people who've come to testify here today and 8 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 see if we're ready to take action here at the local level to protect our young people from getting hooked on cigarettes and tobacco, which we know is the leading cause of cancer in this country -- the leading cause of death in this country.
Thank you very much. We recognize the first panel, TEACH, the Tobacco-Free Education and Action Coalition for Health. We have Jeff Barg, who is the TEACH Chair; Mary Tracy, who is the TEACH Program Associate; Donnell Whitmore, a 15-year-old TEACH volunteer. Would you come forward, please. We also have Elena Patterson, 16-year-old TEACH volunteer; Joe Hagarty, a 15-year-old TEACH volunteer; and Jennifer Campbell, a 17-year-old ex-smoker. (TEACH panel comes forward.)
Good morning. We welcome you to City Council. We appreciate your coming, and would you please state your name as you testify for the record. 9 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
Good morning. " I'm also President of the Coalition for a Tobacco-Free Pennsylvania and publisher of Physician's News Digest. I appreciate the opportunity to testify here today on this important issue. " This is because almost all people addicted to tobacco begin using tobacco in their teens. And in the 1990s, we've seen an alarming increase in teen use not duplicated among adult. S. S. Racial and ethnic minority groups which found that teen smoking rates rose in the 1990s among all four racial and ethnic minority groups studied. African-Americans, American Indians and Alaskan natives, Asian-Americans and Pacific Islanders, and Hispanics, after 10 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 several years of substantial decline. Contrary to data from the early 1990s indicating that increases in tobacco use among white teens were not occurring among African-American teens, smoking rates among African-American teens were up 80 percent between 1991 and 1997. How can we stem this epidemic of what is already our number-one cause of preventable death? Clearly, there are no easy answers, and the problem will need to be addressed in a variety of ways if we are to be successful. Experience in California and Massachusetts show that a combination of higher tobacco prices, hard-hitting counter-tobacco and advertising education, and curbs on youth access to tobacco can make a difference. Several years ago, Philadelphia City Council passed a law designed to make it more difficult for minors to obtain tobacco products. At that time, 85 percent of merchants were illegally selling tobacco products to minors. After a year of vigorous enforcement 11 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 by the Department of Licenses and Inspections, that rate dropped to 54 percent. This remarkable rate of reduction is the best in the state. However, the rate of illegal sales of tobacco products to minors remains up at 83 percent in our last random survey for cigarette vending machines. This should be of no 9 surprise to anyone. D. to determine someone's age. Cigarette vending machines cannot turn away people who want to use them. They are frequently located in places where they cannot be monitored. And even when they can be seen, their utility is in freeing clerks for the need to attend to those purchases. And believe me, they do not. While some will contend that banning cigarette vending machines will inconvenience adult smokers, the primary people it will inconvenience are teens attempting to purchase cigarettes. Research shows that the younger you are, the more likely you are to use cigarette vending machines. 12 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 Research also shows that when it is more difficult for teens to purchase tobacco from clerks in stores and more difficult to steal because of placement restrictions, such as are in place in Philadelphia, cigarette vending machines become an even more important means of obtaining cigarettes for teens. Moreover, research shows that adults are willing to put up with a little inconvenience in order to protect the health of their kids. A recent survey conducted by the Robert Wood Johnson Foundation found that 91 percent of the public, both smokers and nonsmokers alike, endorse a ban on cigarette vending machines that are accessible to minors. After all, we would be rightfully shocked if alcohol or handguns were sold from vending machines. And, yet, both combined cause fewer deaths than tobacco use. There have been a number of halfway measures proposed by the vending machine industry, both inside and outside of these chambers over the past ten years, ranging from locking devices to placement restrictions to 13 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 tokens to credit card activation and the like. Interestingly, as the threat of legislation subsides, so does their interest in these measures or any other measures to reduce teen use of their cigarette vending machines.
Since this issue came up first in City Council back in the early nineties, has the industry adopted locking devices in Philadelphia? Have they limited placement of their machines to where they could be located by -- monitored by clerks? Or have they limited their machines to so-called adults-only establishments? Are you really surprised that the answer to all three questions is no? In other parts of the country where placement restrictions and locking devices on cigarette vending machines have been tried, they have had only limited success in preventing sales to minors. S. S. Department of 14 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 Health and Human Services, they all call for a total ban of cigarette vending machines. Notwithstanding their protestations to the contrary, even the tobacco industry and the vending machine industry can see the writing on the wall. The tobacco industry has signed off on a total ban of cigarette vending machines in their agreement with state attorneys general, including Pennsylvania Attorney General Mike Fisher. This agreement, however, requires congressional action. The FDA has also outlawed all cigarette vending machines in locations accessible to minors. This regulation currently is tied up in appeal, however. Even the vending machine industry, by their actions if not by their rhetoric, has acknowledged the situation. S. Has decreased significantly from 373,800 to 181,755 between 1988 and 1993. 5 percent in 1960. Clearly, the vending machine 15 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 industry has been shifting its business and would not be impacted significantly by a ban on cigarette vending machines. The primary group to be impacted by this bill would be our kids. They might find it more difficult to become addicted to this most deadly substance. S. Congress or the FDA, because our kids' lives are literally at stake. Please take the next logical step to the youth access law you passed several years ago, and pass a ban on cigarette vending machines. Thank you.
Good morning. My name is Mary Tracy, and I represent TEACH, the Tobacco-Free Education and Action Coalition for Health. It has been my job and, really, my pleasure to have served this city for the past 20 months in helping to enforce the wonderful ground-breaking law that was passed here by 16 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 City Council. Through TEACH's efforts and some of the youth, others that aren't here today but are represented by those that have graciously agreed to come today to testify before this committee, we have been able to reduce the over-the-counter sales from 85 to 50 percent in this short time. One of the discrepancies of this law, however, is the fact that as we have made through collaborating our efforts with L&I, we have educated merchants in corner stores in 7-Elevens, in Rite-Aids about the law. And they have posted signs, they have moved their tobacco behind the counter, they have put all the tobacco in locked cases, and they ask anyone who appears to be years of age or 19 younger for a photo I.D.. 20 This is a tremendous breakthrough. 21 Communities call us -- over a thousand people 22 from the community have called up to report 23 underage sales in their neighborhood stores, 24 and we have written to those merchants and we 25 have gone out to visit them with our youth. 17 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 And we are making progress. But the thing that sticks in my gut is that the people who have vending machines in their stores, in their restaurants, in their bowling alleys, in their gas stations, in their pizza joints, have a vending machine that is not monitored because they are not in the business of selling tobacco; they are in the business of serving food, they are in the business of renting people rooms, they are in the business of fixing people's cars. They are not in the business of selling tobacco. And, yet, they are selling tobacco, and they are selling tobacco at a more expensive rate and to a greater young people who can't get their tobacco elsewhere. And if the City is really serious about making difference in youth smoking, then we have got to look at how accessible we are making tobacco to our young people. Because, as we crack down on one hand and educate merchants and they cooperate with us, we are letting this huge vacuum exist where tobacco is accessible. And so I think we need to 18 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 seriously address this. Some of the students that I've brought today, I'll introduce them to you. I think you'd really rather here from them than from me. But we have gone -- through the summer, we had a random sample that was mandated by the State, and we visited stores. And, as Mr. Barg has said, 83 percent of those stores sold. And then, just this past week, despite all the news about the evils of tobacco, the dangers of tobacco, what a killing drug it is, how we shouldn't be selling to youth, nine out of ten stores sold to this young man. Some of the stores even asked our students, Did they need change, did they have enough change? Oh, the machine is in the back. Either they don't have a clue what the law is or they really don't care. But I don't really care what the reasons are; I want the machines out of the City of Philadelphia so we can be more effective in doing our job and telling our young people that we care about 19 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 them and that cigarettes are not candy; they are a very deadly drug, and we don't want them to become addicted to it. So I'll start off by introducing you to Elena Patterson.
Thank you very much. We do want to hear from you, and we appreciate what you said.
Thank you. MISS PATTERSON: My name is Elena Patterson, and I've worked with Miss Mary Tracy over the summer. Some of the stores we went to, they did ask me, Did I need change? They directed me toward the machine, and some of them just stared at me as I bought it, but they never approached me and said don't buy. And I think this is a very serious issue, and I don't think it will be affecting the adults as much as the children because the adults, they can easily buy over the counter, but the vending machines is the main source for tobacco for the children. And I think this is a very serious law. Thank you. 20 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
My name is Joseph Hagarty. I also work with Mary Tracy for TEACH. Over the summer, I primarily did most of my work, and I bought cigarettes at several vending machines all over the city -- from South Street to Roxborough, everywhere. And people also have given me change to buy cigarettes out of the machines, and no 13 one has really deterred me from buying cigarettes there. It's very easy and it's very accessible for kids who can't buy over the counter.
When you purchased the cigarettes, did you say anything to the adult in the store that they were not supposed to allow you to buy those cigarettes? Did you say anything to them?
No, you just purchased. 21 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
And was that -- you're talking about buying from cigarette vending machines?
And could I just ask, where did you find -- well, maybe we should hear the last young man.
Speak into the microphone, please. And we have old ears, so you have to speak very slow.
Okay. I'm Donnell Whitmore. All the cigarettes you see right here, I purchased on Friday and Monday. I went to a lot of stores down in South Philly. And 22 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 most of the stores, the people, they was like helpful toward me buying the cigarettes. And the one place I went in, I saw the machine but I acted like I didn't see it, and I went up there and bought some. And I asked them, Do you sell cigarettes? They said, Yeah, in the vending machine. And she walked me over there, and she said, Did I have the correct change? I did have it; I just wanted to see if she told me. And a lot of the cigarettes that we bought, even those that are ore expensive, it was easier, 'cause some of the them, it wasn't supervising -- it's like a little kid and be as young as whatever, as long as he knew how to put the quarters in the machine, he could buy them because all the supervision was inside the store and the vending machines was right next to the door. So it was like no one was going to see them. And in most cases, people in the store, they did see me. And a lot of stores was -- the people, they would stand there and watch me. Or, in some cases, the clerk, he 23 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 would just walk past me or whatever. And when I get cigarettes, he never bothered to look back and tell me -- or ask me how old I was. And on the machines -- I saw on a few of the machines, I saw the one machine, if you're under 18, you have to have an I.D. And the people that stood there and looked at the machine 'cause it was -- I saw it. Before I got in the store, I saw the thing on the machine. And they were standing there already, and they didn't ask me for I.D. or nothing like that.
Thank you. Before we begin the questioning process, I'd like to recognize the senior civics class from Germantown High School to my left. Would you like to stand and be recognized. (Germantown High students stand for recognition). (Applause.)
Thank you for coming. We appreciate your being here, and we hope that you will gain a valuable lesson from 24 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 this session today. Thank you. The Chair recognizes Councilwoman Fernandez.
I was wondering if any of the teens who are a part of TEACH, could you tell us what kinds of places you were able to buy cigarettes out of vending machines? I know I was amazed when I was going over the list that they were in laundromats, apartment buildings. So, I'm wondering, what kind of establishments did you go into where you were able to successfully buy? MISS PATTERSON: Um, my --
State your name. Each time you speak, you have to re-identify yourself for the record, okay?. MISS PATTERSON: Okay. My name is Elena Patterson. My experience was in restaurants, pizza houses, pubs, and pizza. That's mainly it.
When you say "a pub," you mean like a bar? Did it sell 25 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 alcohol?
It was a place for over 18, like adults. It's not for young people, but -- MISS PATTERSON: It sold food also, but like it had a area for adults where they could get drinks. And the vending machines, you had to go upstairs down this dark hall, into this like game area. And she like whispered it to me, that the vending machine was upstairs.
In a bar, and so it was out of the way. Was there any away an adult could see you purchasing -- MISS PATTERSON: No. It was no one in there. It was like game machines in there. I guess that was like the kid area or something, and so that's what it was.
But when you went into the pub, the machine was not near the door? MISS PATTERSON: No. 24
So they had to tell you where to go -- COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 MISS PATTERSON: Yes.
-- to get to the vending machine. MISS PATTERSON: Yes.
And it was out of the way, upstairs, out of the way, away from the door? MISS PATTERSON: Yes.
I'm Joseph Hagarty. I've purchased cigarettes through vending machines at pubs, like Elena, bowling alleys, pizza parlors, and other places like that. She pretty much covered them all. And usually, they're right by the door. But other than that, like you have to go up and get change if you don't have it, and they give you the change, they help you buy the cigarettes.
So there were no questions asked about you being -- I mean you don't look 18 -- about you being in a pub?
Not at the places I went to, no. 27 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
Donnell Whitmore. The places that I went to, it was mainly -- they already mentioned the names of pub and stuff like that. But the one pub that I went to, it's like the places that was populated with people in there already, customers and whatever, I went in there. And it was like -- in a few of the places like that I thought was for grown-ups, it's like I walked straight in there, and it was like, no, I went back. And it was like I let them notice me first and then went to the vending machine and see if they was going to say anything to me. And it was like three places. And it was like a pub place for like grown folks that I went to. And I walked in there, and it's -- the vending machine is right next to the door, as you come in there, but it's facing towards when you come out the -- like the area where the grown folks are, you can see the vending machine right there in the door space. And I walked in first. Then I just 28 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 turned around and went to the vending machine. So a lot of them, I mean, they noticed me before -- before I even came in there 'cause I went in the place first, then I came back out and then bought the cigarettes.
Can I just comment on that too? Most of the time, if it's a real tap room, bar type of thing, I don't really send the kids in. But sometimes we get these random lists from the State. And if it's a restaurant that happens to have alcohol, and even it's more of a pub, more of an alcohol pub place, but there is an area where there's dining, then our kids are more comfortable going in there. And they're the sort of places I think they're referring to here.
Mr. Barg, you talked about the State attorney generals being in support of this kind of legislation. Did you mention the state attorney general from Pennsylvania?
Yes, yes. Mike Fisher, 29 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 Attorney General of Pennsylvania, has signed off an agreement, along with other state attorneys general that would include a total ban on cigarette vending machines, which has been signed off by all the major tobacco companies. But, as I said in my testimony, that whole agreement is subject to Congressional action, which has been up and down over the pass year, really. And there's serious question whether that will pass, or in what form it will pass. The tobacco industry is seeking special legal protections that no other industry in the country has to give up these things. So it is an open question at this point, whether that deal will eventually go through. I do think that even if the national deal doesn't go through, there's an excellent chance that once Pennsylvania's case against the tobacco industry comes to court or just before it comes to court, there may well be a settlement, which will include a ban on all 30 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 cigarette vending machines in Pennsylvania. You know, I have discussed this with the attorney general, and he is totally in synch on this.
One last comment. I want to thank the teenagers from TEACH and also the adult leadership. It's really the kind of information that you collect for us that really helps us, as legislators, and the rest of the adult world here in this city understand what's going on. So what you're able to do to collect that information, I would never have dreamed that little kids could go into a place where alcohol is being served and be able to first not be noticed or stopped, and then secondly, to so easily be able to illegally purchase cigarettes.
Councilwoman, if I just may add, I think if that shocks you, something that may shock you even more is right across from our own Convention Center here in Philadelphia, at 17th -- I don't know -- 13th 31 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 and Arch, is an adult bookstore called "The Pleasure Palace." And we were able to purchase tobacco there very easily because that one happens to be right on the door as you go in. It's almost on the sidewalk. And so, I mean, when we think of an adult bookstore, you know that they wouldn't let him inside, but they certainly are selling their share of tobacco on the outside of that store.
Thank you so much for your testimony. We appreciate all the hard work you do. And thank you.
Our next panel will include representatives from the vending machine industry: Arnie Aronovitz and Mike Savar. (Mike Savar comes forward.)
Good morning. I'm Mike Savar. Arnie Aronovitz is coming. We just 32 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 found out about this hearing yesterday. He had a previous engagement this morning, but he's attempting to be here. There's a few things for the record that were stated that I would like to address because I have some factual knowledge about some of the things that are going on. There is a Senate Bill 1415 that was introduced by Senator McKean that, in particular, is aimed at addressing the tobacco problem. It's actually an expansion on the agreement that was made by the attorney generals that goes much further than the agreement that they made, which is why, as most of you know, the tobacco companies have withdrawn their support, and they're lobbying against these bills now because the restrictions are too severe, and they argue that it will put them out of business. Where, historically, they've had the strongest lobby in Washington, it appears that there's bipartisan support not to listen to the tobacco companies, and that there will be a bill. And, as I said, this Bill 1415 is 33 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 introduced. They expect that it will be voted on by Memorial Day. There's a similar bill being crafted. In fact, I just spoke to Congressman Greenwood's office yesterday. There's a similar bill being drafted in the Congress. And they're waiting to see what happens in the senate. It's a $560 billion bill. There's a lot of controversy over how the money is going to be used. And politics, naturally, is playing a role in such a huge bill with so much money, but this is moving forward. And we have a State vending -- a national vending association that has been participating in these talks. It's our belief that there will a bill this year and probably before the summer, and that it will be a nonpartisan bill. So I just thought that I would like to comment on that. As far as the ban on cigarette machines, what -- what the deal was, was not to ban cigarette machines per se, although that certainly could be the final result, but to give the FDA the authority, okay, to make the 34 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 determination where cigarette machines would be operated. This is something that's in the courts right now. There are lawsuits on both sides, and it has yet to be adjudicated. One of the statistics that was given -- and I would that I would like to say, and maybe I should have it said at the opening, that there's no question but that Council is trying to do the right thing here. As the owner of the largest vending company in Pennsylvania, with the most cigarette machines, we certainly agree in theory to what you are trying to do. And, I guess, to cut right to the chase, we have always felt that it is the government's obligation to regulate -- and not just with one stroke of the pen, have a total ban on an industry that's been around for 40 or 50 years. There are devices -- and they're called "lockout devices" -- that we've been using more and more. And we've been using them in conjunction with many laws that have repeatedly been passed by municipalities. 35 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 These devices are 100 percent effective, 100 percent effective against stopping minors. They allow for only one purchase at a time. The machine will not work unless it is activated by an adult in charge. And it's the same process that would occur should a minor walk up to the counter and request a pack of cigarettes. There has to be human intervention. They would have to go to the bartender, they would have to go to the clerk, they would have to go to the cashier before they would be able to use the machine. This is available to us. And, as a matter of fact, some of the municipalities that had originally -- like Cherry Hill -- banned cigarette machines have amended -- have amended that ban to allow for the lockout devices under certain circumstances.
I certainly don't advocate operating cigarette machines in bowling alleys. I don't advocate operating them in places where there is not adult supervision. We've made great efforts to reduce that. I'm sure the industry, 36 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 as you've seen, there's still -- we haven't achieved perfection by a long margin, but neither have you with your over the counter. You went from 85 percent to 50 percent, which is still way too by anybody's standards. But what we have available is a 100 percent method of, you know, preventing use of the cigarette machines by minors that, as I said, requires adult supervision. And the machine's only allowed for one purchase, and they reset themselves, and they can't be used again until they're activated again. This is a foolproof method that we have for to us stay in business, to continue to sell to our adult customers. And it's something that I hope that you will consider. I don't ask you to consider anything else that looks like -- the emotion, the evidence, everything that's being said about tobacco, I wouldn't argue with any of it. The only argument that I make is that we have an adult market that we sell a legal product to, that we have jobs that are on the line, people that have made a career in this 37 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 industry. And our request is that we be allowed to remain in business and continue to serve our adult customers only. And this is possible with the lockout device. These lockout devices are very sophisticated. Some of the earlier ones didn't work the way you would want them to work. They've been perfected. They work quite well. And if at sometime you would like a demonstration or you would like more information on them, I would be happy to provide that. That's really basically the main point that I want to make. I commend you for your work. I agree with what you're trying to do. I would make reference to one of the statistics that were given here today. Where there used to be hundreds of thousands of machines in 1988 and now there are significantly less. One of the reasons that there are significantly less is that the industry has taken measures to remove those machines from the places that sell to minors. 38 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 I might add that even though it is not widespread in Philadelphia, that we are using lockout devices right now. We're using them in places where people wanted to continue to sell to their adult customers and knew that they couldn't control the children, so we put them on, and we continue to put them on where we feel that it will solve the problem. Most of the bars in Philadelphia, children won't go in. There are some types of establishments like Bennigan's and Friday's, the Olive Garden, these type of family restaurants that sell alcohol, Denny's restaurants, that doesn't sell alcohol. But our experience with all of these chain operations is that we have removed our machines in our company from 100 percent of these type of operations. That's one of the reasons why there are so many fewer vending machines today. 'Cause we have also been working to try and solve this problem. It hasn't gone unnoticed. I mean, this is something that we have been fighting for our survival for the 39 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 past eight years. And we have done our share and we have made an impact. It may not be -- just as you're trying to do good, it may not be 100 percent. But, certainly, we've made significant strides to achieve what you're trying to achieve. But at the same time for us, the bottom line is that we want to stay in business, continue to sell a legal product to adult customers. And this is possible with the lockout devices that are available. Some references were made with, you know, one off-the-cuff comment that these don't work. They do work.
They work so well that we have regained acceptance from municipalities, mostly in New Jersey, because that's where they've been the most active. And all of our machines in New Jersey have these, and we only sell to adults. That's what we're requesting we would be able to do here in Philadelphia, and that we would achieve 100 percent compliance with what you're attempting to do. On the other hand, we feel that it is 40 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 appropriate for certain types of locations where minors do frequent that they should be forbidden in those types of locations. We agree with that. It's only those places where we would have complete control over who uses the machines and where human intervention would be required in the same manner that an over-the-counter purchase would be made. And if there's any questions, I'd be happy to answer them.
When we had this hearing a couple years ago, the issue of the lockout was discussed. In the two-year time, if that could have been a real deterrent to children buying cigarettes, why didn't you move forward to provide the lockout system throughout your -- on all of your machines?
We have. We have hundreds of them out. They're very expensive. We've put them out where we thought they were needed. We've also removed cigarette vending machines. Unfortunately, we have some 41 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 merchants, as was demonstrated when the children went out and were allowed to buy, these are the same kinds of people that would sell a pack to children over the counter. It's unfortunate that they would abuse the law in that way. However, we have many, many more that have come to us and said, you know, the kids are a problem, we can't control them, would you take the machine out? And we do and we have. And it's reduced the number of machines on our route dramatically. We sell percent of the amount of 15 cigarettes that we sold in 1988, ten years 16 ago. That amounts to a fraction of all the 17 cigarettes that are sold. We now have less 18 than one percent market share. 19 In giving statistics, the 20 Government's Center for Disease Control did 21 their own study. And they came up with 22 statistics that said that less than 2.2 percent 23 of young people use vending machines. 24 And the reason is simple. They're 25 more expensive, there's other alternatives 42 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 available to the children. And right now today, it's easier to steal a pack of cigarettes than it is to buy one through a vending machine. And that's not to say that this is right, and this is why we're here. And, obviously, you're trying to address this issue. I think it's been demonstrated over the years, in all of the hearings that I've attended, and I've attended a lot, that ultimately, that the organizations like TEACH are what you need. It's the education that is going to be the most value ultimately in addition with restrictions and making cigarettes harder to come by. But when you have a country of 250 million people and 45 million of those people smoke, there's a proliferation of cigarettes everywhere. And children can get them at home just as easily as they can get them from their peers. It's a problem. Nobody has a real good answer. But, obviously, this is one step that we're attempt to go take. Each step in the direction of reducing availability of 43 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 tobacco to minors, obviously, you know, is a step in the right direction is what you're trying to do. Well, we don't have a problem with that. We do have a solution. We have the solution that I offered. It works. We could demonstrate that it works. I feel confident sitting here today and telling you that it is 100 percent effective. If you would be interested in taking a look at it, seeing how it works, and possibly putting that in the language, that would regulate tobacco sales through vending machines rather than banning them.
Could I ask you a question. What else do you vend? Do you vend other products? Do you vend food?
No, we don't vend any other products, we don't handle food. We do operate jukeboxes, pool tables, video games. However, the cigarette portion of our business is significant, and we employ a lot of people.
Are you just in 44 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 the Philadelphia area? What is your market?
We're in five counties in Pennsylvania surrounding Philadelphia, and five counties in New Jersey, all of -- most of South Jersey.
Thank you, Madame Chair. I've been trying to uncover some of the basic information before the hearings today. But I'd like, you know, your version on the record to make sure that some of my figures are accurate. Could you tell me what's the dollar volume of your business, Apple Vending Machines?
Excuse me, Penn Vending in the city. Do you have your figures for the city and/or the state of Pennsylvania? You said you're the largest vending machine --
Yes. Our dollar volume 45 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 -- we do $6 million a year in cigarettes totally. That includes New Jersey, Pennsylvania, and Delaware.
And do you know how much of that business is here, in the City of Philadelphia?
So about $2 million of business, here in the City of Philadelphia?
And you said that in addition to having cigarette vending machines, you have other kinds of machines, video, poker --
Okay. And 46 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 how much of your business is accounted for by the non-cigarette vending part of your business?
So that's in 9 dollar terms. Do you have a $6 million 10 business overall? 11
So it's a 14 million and a half in the other areas? 15
Yes. However, the other 16 business is different from the cigarette 17 business. It requires -- you can't compare the 18 two. 19 One is just simply selling a product 20 and sharing the profit with the stores where we operate, and we're constantly turning over inventory. Now, the game business is an entirely different business because you have a high capital investment, and you have to be 47 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 constantly reinvesting in the new games that come out and in the new jukeboxes that come out. And so a lot of the money is reinvested back into the business. And it's a vehicle for making a living. And that's what we do. We have 50 employees altogether, and we're just out there making a living.
So how many cigarette vending machines do you have here in the City of Philadelphia?
If you could get us that list since I assume they're all licensed and everything.
And do you operate any other kind of vending machines? Like do you -- you don't do soda pop? 48 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
And is it a surprise to you that these young people were able to illegally purchase cigarettes from vending machines 85 percent of the time?
Well, your sample was very small. Am I surprised? No. 10 There are controls that could be put into effect that aren't being used now. They are available, we're starting to use them. Obviously, when you mandate that we use them, we're forced to do it a lot quicker. But we're business people. We only have so much money available. It costs us hundreds of thousands of dollars. It's like any industry having to retool to move into another direction. That's what this requires. And unless we know we're going to survive, we can't make investments that are huge unless we have some assurance that we're going to be here tomorrow to recoup that investment.
Well, 49 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 actually, the 85 percent here is very much in line with national figures.
It ranges from 82 to 100 percent of the time, according to national studies.
I haven't seen those studies. I know that in New Jersey, we've eliminated minors from machines.
In New Jersey, we have eliminated minors from using the machines. We have installed lockout devices in New Jersey on 100 percent of our equipment.
Well, according to my information -- and let me see if you think this is correct -- my understanding is that (Vern also here now) 87 municipalities in New Jersey have a total ban of vending machines. I assume you're not doing business in those 87 counties.
Well, yes we are 'cause some of them have amended their ban to allow 50 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 for the lockout devices. We've gone back to them -- Haddon Township, Cherry Hill, Gloucester Township, and others, just to name a few. They are some that I'm sure of.
Well, could you present a list to us, then, of counties where you have installed lockout devices in New Jersey?
And then what about the four municipalities here in the City -- in the Southeastern Pennsylvania region?
A number of years ago, we made agreement with Montgomery County. Montgomery County had introduced legislation to ban cigarette machines. And we had a compromise with them, with their health department, where they allowed cigarette machines under certain circumstances. To give you some examples, they weren't allowed in doorways, they weren't allowed in areas where they were untapped. They weren't allowed, as one of the young 51 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 children testified here, up by the bathrooms or on the second floor, or they weren't allowed in an area where they couldn't be supervised. And we agree with all of that.
Well, my information says that in Haverford, Radnor, Tredyffrin --
-- and Warrington township, there's a total ban. Are you doing business in those four townships?
We had very few machines in those townships to start with. And in Warrington, as far as I know, is not enforcing the ban. Haverford -- did you say Haverford?
Haverford Township, because of the deal that we made with Montgomery County, wasn't enforcing the ban. Radnor, I believe, is. But, again, you can only fight -- from our point of view, as businessmen, we can only fight so many battles, we only have so 52 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 many resources. And if we only have one location, in Radnor Township, it doesn't pay to fight them. Cheltenham Township did the same thing, and they have since relented and allowed the use of the lockout device.
While noting the suburban counties, what I find very disturbing is that the young people in our city who are at risk for a lot of other reasons have a much easier time illegally getting access to tobacco products here in our city that in the counties. When TEACH started originally doing surveys, like four years ago, the average was like 30, 40 percent of the time, they could purchase out in the counties. And here, it was 85 percent of the time. So it's a serious health issue here in our city.
So I'm noting some of those townships have taken stricter measures than we have. But that's 53 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 certainly one of the reasons, I think, we strongly need stricter measures here.
Well, the logistics are different in Philadelphia than they are in some of the counties. The shopping patterns are different. You don't have corner stores in the counties, you don't have corner bars. You have shopping centers that people drive to. In Philadelphia, you have neighborhoods. And in the neighborhoods, the people walk out the front door, and they walk to the corner store or the corner bar, or what have you. So that's one reason for the difference. We're not making any argument that says that you shouldn't have some restrictions. We agree. Just like your efforts to curb over-the-counter sales have not been 100 percent successful to date, our efforts haven't been 100 percent successful either, but we have made great strides.
The sample -- the sample 54 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 that you're using, okay, the number of children that you have out there and the number of purchases that they've made and the manner in which they are presumably driven in what is really a sting-type operation, the sample is minute compared to the number of cigarettes that are sold. And, you know, we know that we're selling the majority of our cigarettes to adult smokers even now. And with the kind of controls that are --
Well, can you provide evidence of that? Don't make statement that you can't back up.
Well, no, I am making them on public record. We have put lockout devices out there, we have tried to educate the people 55 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 that are selling them. We've sent notices, we've sent our representatives around, we've removed machines. I will go on the record with that.
No, you said -- your statement was that you know that most of your tobacco -- your cigarettes from vending machines are being sold to adults instead of young people.
I am asking for evidence. You're challenging the evidence of other people with their samples and random samples. I'm saying, if you want to make a statement like that, I'd like to see the evidence for it.
Well, you did a study yourself two years ago, when your bill came out. They made 100 purchases. It might have 56 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 been a different group of children, but it was the same type of sting operation. Of those hundred purchases, two of them were through vending machines. I was here, I happened to hear that report.
But again, we're arguing about something that we really agree on. What we're saying is, we have the ability to eliminate teenage access to our machines.
Can you explain what the lockout device is. I know I got here late, but I'm not quite sure what that is.
Okay. The original lockout devices were like an on-off switch. They would have to be turned on, and they would have to be turned off. They allowed for multiple purchases. Obviously, that was no 24 good. There's a lockout device now that 57 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 we're using where the machine -- you can put the money in and pull on the levers all you want, but you can't buy cigarettes unless it's activated by the clerk or the attendant or the person in charge. Once the purchase is made, the machine locks up again. It cannot be used again unless it's activated. And I can say that with this human intervention, that we're a safer system now than the over-the-counter market. It's still possible -- it's still possible to steal cigarettes in a store where they are not locked up. The advantages that we offer with system is that they are locked up.
Excuse me, Councilman, if I could just finish the line of questioning. I was going to ask you, in how many of the places where you have cigarette vending machines, have you, as of today, installed these new sophisticated lockout devices? 58 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
About percent of our route. Mostly in New Jersey, but we have them in Philadelphia.
I'm 6 referring to Philadelphia. Have you installed 7 any here in the City of Philadelphia? 8
And what is 13 your estimate of the numbers of establishments 14 -- cigarette vending machines that have the new 15 sophisticated lockout device? 16
No, no. I'm 21 asking you, do you have an estimate of the 22 numbers? 23
Where you 25 have this new sophisticated lockout device? 59 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
Okay. Would you send that to the committee, with a list of the addresses?
I think what's more important than that, though, is what I tried to explain earlier. We have these available to us. They've very expensive. We will be glad to install them with if we know that that is what the law is going to be, and that we can be here and recoup our investment. You're talking about an investment of hundreds of thousands of dollars to do our whole route. And it wouldn't be prudent to go out and make that kind of investment if, on January the 1st, 1999, we're going to be out of business. And that is a possibility. The issue is sales of cigarettes to minors. We're offering a solution.
Okay, could I ask you to comment on this: If the young 60 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 people that testified here today have gone into bars and been allowed to be there, they have been able to get change from the people allegedly tending and watching out for the cigarette vending machines, what makes you think an attendant would not also push a button and allow the young person to illegally buy?
Why would that attendant be any less responsible than the clerk that's in charge?
I'm saying, right now, we find in this city that 50 percent of the time where we have a tough law that is being enforced in stores, with L&I and TEACH working very hard to dramatically lower those numbers, people are getting fined. But, still, 50 percent of the time, people are risking a fine and illegally selling. So, again, what makes you think that in an establishment that would have the push-button that you would not have adults push the button and let the kid buy? Just like now they're giving them change even though these little kids could no 61 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 more pass for -- I mean, you can't -- you can't convince me that these little kids look 18. And it would be a gross mistake to think that these little kids look 18.
Why would I want to 7 convince you that they do when, obviously they 8 don't? That's not the issue. 9
No, the 10 issue is that the person in the bar or the 11 other establishment that now is supposed to be 12 watching out for the cigarette vending machine 13 is not doing it. They're letting these little 14 kids in, they're giving then change. 15 So your lockout device seems to me 16 very fallible because we have people willing to 17 risk a fine, and they're illegally selling 18 tobacco products to minors.
It is no more fallible than in any other over-the-counter sale. And why should we be denied the same opportunity as anyone else to sell products to adults?
Could they put the vending machines behind the bar, where only adults are? 62 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
If it was that easy, we had have done it already. It's just not that simple. It just doesn't work that way. It's not practice, there isn't room for it.
We heard the same arguments from the store keepers who said they could never get their tobacco products behind the counter -- it wouldn't work. They are doing it. They have found a way to comply to stay in business. And my sense is you could find a way to stay in business also.
We don't want to be a party to getting young kids hooked on tobacco products, that's where we do agree.
Neither do we. And we have found a way to stay in business, and the lockout device is that way. And the same principle that is involved in any over-the-counter purchase is at work. 63 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367 And you would be surprised where we use it how seriously they take it. We've educated people, we have specific people that are designated in charge of the machine. And it works quite well. And it's being taken quite seriously by those establishments that use it.
Thank you, Madame Chairwoman. Mr. Savar, the lockout device, how much how much does it cost?
Can you give me a location now where I could go look at a lockout device, give me a bar or something?
Yeah, Tiffany Diner on Welsh Road and the Boulevard. 64 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
That's fine. Tiffany Diner's at the top of my district. I'll have some --
That's fine. Back to the point. You told Councilwoman Fernandez something, uh. . . If you also sell cigarettes in bars, where do you sell them, where are the machines? I'm not a cigarette smoker. I smoke cigars. So we can't get them in cigarette machines. My father died of cancer, so we can get all that out in the open, okay? Where do you sell them? I mean, I don't know, I don't pay attention to -- 65 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
Primarily bars and restaurants. We do still operate in some pizzerias. We've removed a tremendous number of our machines from most of the pizzerias but we still have some. We found them to be a problem. And where the owners couldn't control them, we removed them.
Primarily bars, bars and restaurants. We have machines at the race track, we have machines in clubs, VFW posts, but primarily bars.
Why would you -- under what circumstances did you choose to select Michael's for a lockout? Had you gotten complaints? 66 COMMITTEE ON PUB. HEALTH & HUMAN SVCS. - BILL 960367
Well, Cheltenham Township banned cigarette machines. And I just happen to think that this is something that was fresh in my mind. And I went there, I showed them the lockout device, I checked with their counsel, and they agreed to let us use it.
And you said you have put some in Philadelphia? Where is Tiffany's?