Tobacco Documents Online

. cHM.ls c aNNCrt. rlO1KOA . SAM0ft 3. sTMTTON. NEW rORK INNL NICl1pLS. ALABAYA O.v. pOM1V1 MONfGOYMY. wsMsIM G ALIi0NNU1 . ~ ROMAID V. OELLUMl. PAT/MCIA fCNNOtGtll COlONA00 *lveNLr 8. BrR0N. MANruuq NICNOLAf MAVNO{Jlti. WiiACNYf[Rf tMR HUTTO. FIONDA Rt 3KELrON. YItfOU/r WMNN IfATN. rtxA. DAYS NIcC{lNOr. OKLANOYA TMOMAf Y. POOURTA. I(NNMVANM ' NOr orsON. 1uurlNq OtNMS Y. NlNTlL MICHIGAN MAK0.rN llOrO. TtNNtffQ NoOMAN slfis[r. VIMGNNA /tlCNAllO RAr. GEONOIA JOHN U. fnu.n. JR. aartN eANO\NNu F1UNK YCCWfKtY. INOIANA 20lOMON P . ONTIS. 7UU{ GEONOE /NUOOr1 OA/IOKN. GtON01A lOMMY f. NOBN/fON. ANKAN,Ai AlaN.O. BVf.AYAMTf. TExAS aMauu BOxul CA1lI0NN1A GE0/10t J. HMCN/NRCKNfK NEW rONK JOSEPN E BNtM/MN. YANS OvYEN I. MCRfTT. VNIGpN/1 Il MARTIN {JWCASIER NoRTN CMOUNA WQ EVANS. K.LN/01{ ' 10.6. fsouic of loreantatibd COMMITTEE ON ARMED SERVICES ift*n2ton, " 20515 ONEMUNDREDTN CONGRESS LES ASPIN. WISCONSIN, CNAIRMAN October 13, 1988 Honorable Frank C. Carlucci Secretary of Defense The Pentagon Washington, D.C. 20301 Dear Secretary Carlucci: YYNAIMI l- DICKINiON. A{AWAYA rLQVO sr/NCY. SOUTH CAAaru WW t. DApMM. moOrNA /N lR/W. AIrZONA JIM COUMTER N!W J[qi" - MM+Jx wOrf+MS. KENnxKr NoOM w. a.V1w. 01N/CAN l NYNTIA CALMOMNA DAVID O7. YAR1rL NlW t01K JOIN R KA:ICH 01.0 IYMM YARtrI RNNO/f N!M/RT N AATlWN. VMGMM MAC Swww.TV" sNI KAL OUAtl ANOY MIEWq. RONbA J,AM Y. NAN1N6 YTAN JWw 0. RGYYMNO. COMNCTICUt CYRT N/KOON. PENNfrIVANU JON M AAI;IpNA ARINUM RAMp/Q JR.fOYTN CANOUNA .MCK DAVIS. 0. KN/ W WCyP. SrAw DM[CTCM The Morale, Welfare and Recreation (MWR) Panel, Subcommittee on Readiness, just learned that the Department of Defense (DOD) plans (1) to remove all tobacco products from military commissaries and increase the price of tobacco products in military exchanges to a price similar to those in comtoercial stores, and (2) ta=increase retail prices of alcoholic beverages sold on military installations. _.~ . As of the present, the committee has not been consulted or asked for its approval or disapproval of this action despite the fact that this committee has since 1948 approved all changes to DOD commissary and exchange regulations. However, it is our understanding that these initiatives are to take effect worldwide early in January 1989 and are intended to achieve the overall objective of increased earnings for MWR programs. The committee strongly believes that the department's proposed plans are not wise, constitute poor business practices, and selectively imposes a unique and unnecessary tax on military personnel and their families, especially in overseas areas. This is the third time such a proposal has been put forth since 1986. The United States Senate has rejected legislation that would increase the price of tobacco products at least twice. The House Armed Services Committee initiated legislation which later became law that prohibits the military services from increasing the price of individual items sold in commissaries. Title 10, U.S.C. was amended in 1986 to include the•types of merchandise which may be sold in military commissaries. Tobacco products are specifically listed as item eight.

. .^ c e' 2 Also, the chairman, Subcommittee on Readiness, on September 29, 1986, approved DOD Armed Services Commissary Regulation 1330.17R which authorizes commissaries to stock and sell, among other things, the category "tobacco products". The chairman, Subcommittee on Readiness, also has advocated the current balanced policy with regard to the sale and consumption of alcoholic beverages on military installations. • Tobacco products account for about 8 to 10 percent of commissary sales and surcharge funds. The action under consideration would translate,into millions of dollars in losses which are used to pay the bills for items Congress does not fund; for example, new construction, renovation of facilities, utilities, and supplies. How will these deficits be made up in this era of constrained operations and maintenance and construction funding? The Department of Defense has initiated an effective health promotion program which emphasizes education about health risks associated with smoking and drugs. These programs have achieved their milestones. Each of the services has achieved their goal, and smoking is on the decline. Moreover, the military already has a more restrictive policy on smoking than their civilian counterparts. Former Secretary of Defense Caspar W. Weinberger, in a letter to the chairman of the Subcommittee on-Readiness dated July 24, 1986, stated: "Smoking is to be prohibited in areas such as %nference rooms, classrooms, and elevators. Smoking areas will be designated in-eating facilities and common work areas, providing there is adequate space and ventilation. There is to be no general ban on smoking, however, nor have we restricted' the availability of tobacco products. Thus, while we do seek to educate our service members and civilian employees about the health risks of smoking, discourage them from smoking, and make available a healthy environment for nonsmokers, ultimately whether our service members and employees smoke will remain a matter of personal choice." The committee does not see why this policy needs to be revoked. Your own department studies clearly show that military personnel overseas will bear the greatest percent of price increases with no shopping alternatives. While there may be some short-term increases in MWR funds, revenue is projected to decline in several years because of patrons' preferences and habits, and loss of competition. The overall capability of the military exchange system will be severely taxed. Army and Air Force commissaries sell about $357 million in tobacco products. The Army and Air Force Exchange System (AAFES) in roughly a three-month period will have to handle a 175-percent net increase in sales worldwide. This additional burden would be compounded by the impending transfer of package beverage stores to the exchanges, especially given the price increases under consideration. AAFES and the other exchanges will not be able to handle this substantial workload and still provide higher quality service to its patrons.

3 This effort is counterproductive because it seems perfectly clear to the comnittee that increasing MWR revenues by imposing additional "taxes" will set a precedent by which committees view selective price increases as an opportunity to further reduce appropriated funds to the MWR programs. It is clear that one only has to look to the commercial sector that tobacco and alcohol use has shown a dramatic decline in sales. The military services are experiencing a similar trend. It appears the department is attempting to fill a short-term funding gap using a severely declining revenue source. The policy is ill-advised in being hastily pursued and will cause considerable turmoil to a balanced and thoughtful cverall policy. This policy has been developed through years of cooperation between the DOD and the Congress. Precipitous derailment of this policy and our relationship will irreparably harm our mutual interests in this vital area. We would hope that specific legislation,in this area would not be necessary, and the committee strongly recommends that any action to implement changes,to these policies be deferred until Congress can be consulted When~tG reconvenes next year. r //+ Sincere~; ~ . <( '~~; C Nicholas Mavroules Chairman Subcommittee on Readiness ~~;,,ftex- Marvin Leath Chairman Morale, elfare & Recrea Subco~tee e.•~teadine • )~~• ill Nichols Chairman ' David 0'B. Martin Ranking Iftnority Member Morale, Welfare & Recreation Panel Subcommittes on Readiness I Jack Davis Member nel Morale, Welfare & Recreation Panel Subcomiuittee on Readiness Subcommittee on Investigations