UPS reviews US cigarette shipments
Sandy Springs-based delivery giant UPS said it’s reviewing its policy on carrying tobacco products, even as rival DHL announced it will stop delivering cigarettes to individual consumers nationwide under an agreement announced Tuesday with New York Attorney General Eliot Spitzer.
Spitzer said DHL is the first major shipping company to agree to the ban, and negotiations continue with other companies and the U.S. Postal Service.
UPS confirmed Tuesday that it is in talks with Spitzer’s office. It described the talks as “very cooperative” but declined to discuss specifics or comment on DHL’s announcement.
State lawmakers — and members of Congress — have said they are increasingly concerned about Internet sales of cigarettes, which can provide a back door for minors to get access to tobacco products and, states worry, make it easier for buyers to avoid paying local and state sales taxes.
States lose more than $1 billion a year in tax revenue from Internet tobacco sales, according to the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
Enforcement has been difficult, even though in many states, including New York, the Internet sale of tobacco products is illegal.
Last year, UPS and other companies successfully fought federal bills that would have required carriers to verify that taxes had been properly paid on tobacco shipments and that minors were not signing for the deliveries.
“UPS did not want to be in the position of being the law enforcement agent or being the tax collector,” company spokesman David Bolger said.
UPS requires tobacco shippers to be properly licensed dealers or distributors and have contracts with UPS if they are going to make shipments to individuals.
“People who ship with us should not use the system for illicit purposes,” Bolger said.
Still, Bolger said, UPS is reviewing its policy. He declined to say how much of UPS’ revenue is from tobacco shipments.
Memphis-based rival FedEx said it doesn’t allow tobacco shipments to individuals.
“Our policy has always been that we just ship dealer-to-dealer or distributor-to-dealer,” spokeswoman Sandra Munoz said.
The U.S. Postal Service, citing concerns about the privacy of the mail, has declined a request by the National Association of State Attorneys General to halt cigarette shipments to individuals.
DHL’s agreement with Spitzer and the ATF follows a March deal in which major credit card companies began refusing to participate in Internet sales of cigarettes nationwide.
In Tuesday’s agreement, DHL cuts off another route for the Internet cigarette sales, a growing business, Spitzer said.
DHL General Counsel Jon Olin said his company’s agreement is in the best interest of customers and the public. The company still will be able to deliver tobacco products to licensed retailers and other authorized recipients.
“By taking a proactive approach, DHL is pleased to be the leader in the prevention of illegal cigarette sales in the United States,” Olin said.
Spitzer said he has urged Congress to enact legislation banning the direct sale of cigarettes bought online or through the mail to individual consumers.
— The Associated Press and Bloomberg News contributed to this article.
