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For immediate release: Wednesday, April 7, 2010.
Contact Bob Brammer: 515-281-6699, Rbrammer@ag.state.ia.us

Valero Agrees to Policies to
Prevent Tobacco Sales to Minors

Des Moines. The Valero company, one of the nation’s largest gas station chains, has agreed to a set of measures aimed at reducing tobacco sales to kids at more than 4,900 gas station convenience stores operating nationwide under Valero trademarks, Iowa Attorney General Tom Miller announced Wednesday. [Go to Valero agreement with 38 states and D.C..]

“Valero owns 1,000 convenience store outlets and has nearly 4,000 franchise outlets, so this will make a difference,” said Miller. “We now have about 100,000 retail outlets nationwide operating under comparable agreements and measures to block tobacco sales to kids.”

Miller’s office and the California A.G.’s Office lead the multi-state group that negotiates with major retail chains about their practices on tobacco sales to minors.

“This is the latest in a series of agreements we’ve reached with the nation’s largest tobacco retailers,” Miller said. Similar agreements have been reached with Walgreens, Rite-Aid, and CVS drug store chains; ExxonMobil, BP Amoco, ARCO, ConocoPhillips, Chevron, and Shell oil companies; Wal-Mart and 7-Eleven retailers; and the Kroger grocery chain.

At its own stations, Valero will instruct clerks to check I.D. for all tobacco customers who appear to be under age 27, use security videotapes to monitor compliance by clerks, eliminate self-service tobacco displays and vending machines, perform random compliance checks involving youthful tobacco purchasers, and implement many other safeguards.

Valero also agreed to change the terms of its franchise contracts so that tobacco sales to minors must be reported to Valero, and illegal sales could result in loss of the franchise.

“We commend Valero for taking strong steps to block tobacco sales to youths,” Miller said. “Most smokers started as children, and one-third of children who take up smoking will die from a tobacco-related disease. And youths get tobacco at gas stations -- 47% of kids who buy cigarettes say gas station outlets are their primary point of purchase,” Miller noted.

Iowa was one of 39 states and territories that reached agreement with Valero Retail Holdings Inc., and Valero Marketing and Supply Company, based in San Antonio, TX. Valero retail brands include Valero, Beacon, Diamond, Shamrock, Ultramar, Corner Store, and Stop N Go.

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More background and detail on the agreement:

The 39 states and territories participating in the agreement, called an “Assurance of Voluntary Compliance,” are: AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IA, KS, KY, LA, ME, MD, MA, MI, MT, NE, NV, NH, NJ, NM, OH, OK, OR, PA, TN, TX, UT, VT, VA, WA, WY, and the District of Columbia.

The agreement includes specific procedures and policies designed to address how tobacco is displayed and sold, in order to curb sales to minors. Valero has very few outlets in Iowa, but the agreement would cover future expansion into the state.

For its company-owned convenience store outlets Valero has agreed to:

•Instruct clerks to check I.D. for all tobacco customers who appear to be under 27, and accept only valid, government-issued photo-I.D.
• Program cash registers to aid clerks, when possible (for example, by locking a register when a tobacco product is scanned, and prompting the clerk to ask for I.D.)
• Adopt standards for hiring and training employees regarding sale of tobacco products, including instructing employees on the compelling health reasons underlying restrictions on youth access to tobacco.
• Use security videotapes of tobacco sales transactions to monitor compliance, and post signs warning would-be underage purchasers that their attempt to purchase may be caught on tape.
• Eliminate self-service tobacco displays, including vending machines, and prohibit distribution of free tobacco products on store property.
• Arrange for an independent entity to perform random compliance checks involving youthful tobacco purchasers at least twice every six months at each of 250 company- owned stores, to permit the company to evaluate how well its training and other safeguards are working. Valero may reduce and ultimately eliminate the required compliance checks by repeatedly attaining 90% compliance rates.
• Maintain a policy against increasing youth demand for tobacco through in-store advertising, and limit such advertising to brand names, logos, other trademarks, and pricing.
• Designate an employee who will be responsible for addressing compliance with underage tobacco sale laws, and who will monitor reports of infractions by company-owned outlets as well as by franchisees.

How the agreement affects Valero franchisees:

Valero’s franchise agreements will reflect the importance of compliance with laws prohibiting tobacco sales to minors. Valero also will require franchisees to report to Valero company headquarters any underage tobacco sales infractions that occur, through law enforcement stings or otherwise.

“Being required to report underage tobacco sales should be a strong incentive for independent operators to do everything they can to avoid making such sales in the first place,” Miller said. He said franchise operators seeking to eliminate underage tobacco sales can look to other terms of the agreement with the Attorneys General for a detailed set of safeguards.

“Even though underage tobacco sales harm young people and undermine a company’s reputation and standing, as well as violating state laws, for too long they have not been considered an important factor in the franchise relationship,” Miller said.

Tobacco threatens young people:

The agreement noted the fact that more than 80% of regular adult smokers began smoking as children. It also noted that 2,000 children begin smoking cigarettes every day in the U.S. – and one-third of them will die one day from tobacco-related disease.

Studies indicate that youth demonstrate signs of addiction after smoking only a few cigarettes, the agreement noted. An estimated 690 million packs of cigarettes are sold illegally to children each year nationwide.

“Youth access to tobacco is a major public health challenge that requires an attack on all fronts, including eliminating over-the-counter sales,” Miller said. “It has been established that the earlier a tobacco addiction takes hold, the tougher it is to break, and the more likely it is to lead to a tobacco-related disease,” he said.

“A large majority of smokers become addicted by their mid-teens, but if a person can reach young adulthood as a non-smoker, he or she will probably never become addicted to tobacco,” Miller said. “Helping our young people get through those vulnerable teen years tobacco-free clearly is vital.”

END