Evaluation of Retailers' Behaviour Towards Certain Youth Access-to-Tobacco Restrictions (Final Report of Findings: 2004)

Executive Summary

Background

This report summarizes results from the latest independent investigation into retailer behaviour with respect to key aspects of Canadian tobacco legislation, in particular that part of the laws regarding youth access to tobacco. The laws regulating tobacco sales in Canada are embodied in the federal government's Tobacco Act and in corresponding provincial legislation. This is the first year that The Corporate Research Group Ltd. (CRG) has conducted the independent measurements of retailer compliance with the sales-to-minors provisions of the laws for Health Canada . The studies conducted between 1995 - 2003 were completed by ACNielsen, a VNU company.

The scope and methodology of this work has evolved over the years but maintain direct links to the original study design developed by ACNielsen. In the effort to provide as much continuity as possible with the baseline measurements established in prior years by ACNielsen, CRG's approach to the study was to keep the field research and data reporting methods held as constant as possible with those of ACNielsen's studies held in the years 1997-2003.

Research teams consisting of one young Canadian (fifteen, sixteen or seventeen years of age) and one adult (over nineteen) were sent into tobacco-selling establishments across thirty cities in each of ten Canadian provinces. Minors attempted to buy a brand-name pack of cigarettes but refused the transaction if retailers appeared willing to sell. If asked their age, teens were instructed to be untruthful. However, they carried no identification and made no effort to disguise their appearance. Adult observers were responsible for the supervision of minors as well as for the collection of data relating to the posting of signs consistent with the tobacco laws and for the gathering of information relating to the availability of tobacco advertising at point of sale. Team members operated independently of one another.

Retailers in five classes of trade were sampled: grocery supermarkets, chain convenience, independent convenience stores, gas stations/kiosks and pharmacies (only in provinces where the sale of tobacco in pharmacies is permitted).

A total of 5,516 stores were visited. Thirty cities across Canada form part of this study. The same cities have been consistently studied since 2002.

Compliance relating to tobacco advertising and the displaying of tobacco and tobacco related products was monitored in Saskatchewan based on Canada 's Tobacco Act whereby this activity is not prohibited. This was measured, not in support of a provincial act or amendment, but due to a Saskatchewan Court of Appeal ruling (Rothmans, Benson & Hedges Inc. v. Saskatchewan , 2003 SKCA 93) which found Section 6 of Saskatchewan's Tobacco Control Act inconsistent with Section 30 of Canada's Tobacco Act. As a result of this decision, Federal laws relating to tobacco sales promotions became the observable default (doctrine of federal paramountcy).

Observations relating to Operation ID are additions of the past three surveys, but all other measurements for this year's survey were collected and recorded in the same way as always.

Understanding This Report

The survey is not intended as a rating of cross-jurisdictional performance. The data from this study is intended strictly for information purposes and is not gathered for purposes of regulatory enforcement. As such, "compliance" is not measured on the basis of the strictest interpretations of the laws, but rather only to obtain a general estimate of retailers' abiding to their obligations under the various tobacco laws. The research is designed to monitor retailer compliance with the general spirit of the laws using specified conditions and guidelines at the national level. The regional data is useful for understanding the national trend, but one must be careful about drawing comparisons between regions.

For practical reasons, it was not possible to impose in all cities the same controls for age and gender of teens that we did nationally. This will affect the results in the regions. At the regional level, the findings should be used for other things:

• to debate best practices between regions;
• to track the progress and general direction of retailer compliance with the tobacco laws over nine surveys since 1995;
• to learn from the national results what variables motivate retailer behaviour;
• to consider ways to apply these lessons in the provinces.

Key Findings

1. Tobacco Sales-To-Minors Legislation: Retailer Behaviour With Respect to Provisions Prohibiting Tobacco Sales To Minors (Tables A, B, C)

For the first time in the history of this research the national retailer compliance levels regarding youth access to tobacco has exceeded the Federal Tobacco Control Strategy's (FTCS) 10-year target objective of 80% or greater: The current level stands at 82.3%.

Nationally, the percentage of retailers refusing to sell cigarettes to underage Canadians has improved from the dip experienced in the rates of just one year ago. The figure is weighted (i.e., raw data has been extrapolated to reflect conditions we might have found had all stores in the thirty cities been visited instead of just a sample of stores). Using the empirical rule, 95% of the elements have a parameter that falls within two standard deviations of the mean for that parameter in a normal distribution. Therefore, the results are accurate +/- 2 at the 95% confidence level. Meaning any result that is within +/- 2 points from last years results are statistically insignificant and statistically significant if the difference is outside of this range. On a national level, an increase of 14.6 percentage points from last year's compliance rating of 67.7% represents a statistical significance.

The increase in the percentage of retailers refusing to sell to underage youth correlates directly with an equivalent increase in the percentage of retailers willing to ask for proof of age. This year's result indicates a compliance of 80.1% when asking for ID, an increase of 13.3% over the 2003 results.

Retailers' willingness to sell to minors increases with the age of the minor. This study shows that a retailer's willingness to sell tobacco products increases by 10% for 17 year olds over 15 and 16 year olds combined. Compliance rates were highest amongst the "25+ but not senior";category age group of the clerk on the other side of the counter (86.1%). Retailers were more compliant when the gender of the minor was female and female clerks asked for ID and refused to sell more often than males.

Compliance levels in retailers near schools or malls increased this year (17.3%) and compliance levels from retailers elsewhere increased (12.2%). The differences in total compliance by proximity showed no statistical significance. The time of day of the visit showed a reverse from the last year. The trend was that retailers were more compliant before noon and became less and less compliant as the day progressed. Compliance rates dropped from 86.8% before noon to 76.6% after 6:00 PM. Consistent with last year's results, clerks were found less likely to show willingness to sell when adult customers were present in the store at the time of the minor's attempt to purchase cigarettes.

In 2004, the highest rate of compliance among the five classes of trade studied in this report belongs to pharmacies. Although the number of pharmacies selling tobacco products has reduced, those remaining have increased in compliancy levels. Among the trade classes, grocery supermarkets rank second and chain convenience stores rank third in compliance. Rates for gas and independent convenient stores have increased to compliance levels since last year's study. However, they also rank the lowest in compliance of all the trade classes.

First and foremost, it is important to recognize that this year's increase is regional in nature. The national compliance improvement stems primarily from an increase in the overall compliance rate across major cities in Quebec . All cities in Quebec showed an increase surpassing 20% from last year's levels, resulting in a score increase of 40% for all cities combined in that province. Ontario also showed an increase in compliance levels of 7.6%. The increase is likely due to an increased number of awareness programs initiated in that province since last year's study.

Among the encouraging details from the latest survey are these:

• twenty-three of thirty cities we visited reported compliance levels of seventy-five percent or better:

• the list contains five cities that were not on last year's list of cities with highest compliance: Regina, Toronto, Chicoutimi/Jonquière, Sherbrooke and Quebec City;
• sales-to-minors compliance is at eighty percent or better (i.e., within the national target) in twenty of the thirty cities studied; 
• in 2004, compliance levels improved by a statistically significant amount (double digits) in ten cities:

• Red Deer achieved a 100% compliance level for the second year in a row;  
• gains in Charlottetown, Chicoutimi/Jonquière, Quebec City, St. Catharines, Kingston, Edmonton, Medicine Hat and Vancouver (CMA), propelled compliance levels to the highest recorded since the study began taking measurements in 1995; 
• among twenty-two cities where stores were visited by fifteen year olds, only three cities scored below 80% with the lowest being Halifax with a compliance level of 45.2%. Five retailers scored between 80% and 90% and retailers in sixteen cities scored higher than 90%;
• among twenty-five cities where stores were visited by sixteen year olds, retailers in nine cities scored below 80%, retailers in three cities scored between 80% and 90% and thirteen cities scored greater than 90%;
• retailers in eleven cities scored below 80%, retailers in seven cities scored between 80% and 90% and retailers in seven cities scored higher than 90% out of a total of 27 cities in which seventeen year olds attempted to buy cigarettes;
• compliance levels reached a new high (91.1%) across the ever diminishing number of pharmacies where tobacco is still sold.

This year's survey shows that certain outside variables continue to influence tobacco retailer sales-to-minors behaviour. The age of teens attempting to make a purchase remains among the most significant of these. The data show that compliance drops progressively, by increments of approximately ten percentage points, among retailers dealing with fifteen, sixteen or seventeen year old customers (89.1% compliance for age 15; 79.1% compliance for age 17). The age and gender of the clerk staffing the tobacco counter also appears to affect the result in measurable ways. And, as always, there exists a strong correlation between the willingness of retailers to ask for proper proof of age and the likelihood that they will refuse a sale to underage youth when no ID is shown.

In 2004, the percentage of retailers who asked for ID was the highest reported since 2000 and represents an increase over last year by 13.2%. Of the retailers who asked for ID, 96.9% were unwilling to sell when the minor claimed to not have ID on their person. When the minor wasn't even asked for ID, they were still refused a sale 23.5% of the time. This development is a contributing factor to this year's higher overall national rate of retailer compliance.

The findings were less conclusive concerning the influence of other variables on retailer tobacco sales behaviour. Among these are: store location near or away from schools or malls, the time of day stores were visited and the presence or not of other adults in the store at the time of the intended purchase. Compliance differences across these variables show no consistent trend and were either not significant nationally, or were at odds to the national result in a number of local markets¹.

Although retailers remain far more likely to refuse a sale to underage girls than to underage boys nationally, this result is not consistent at the level of individual cities. The national finding is skewed by the results in a relatively few number of larger and more populated communities. What is more accurate to say is that the gender of teens remains a variable of influence in some larger urban centers.

Of interest to stakeholders on both sides of the tobacco debate is the effect on retailer compliance of the industry-sponsored "Operation ID" program. This is the third year compliance measurements were taken along this dimension. We found fewer retailers this year than last participating in "Operation ID". Less than half (43.7%) of the 5,516 establishments visited for this year's survey indicated program participation compared with 45.2% the year before. The variance in participation rates at the regional level were largely dispersed amongst the thirty cities.

For the third consecutive year, retailers supporting "Operation ID" registered refusal rates that were significantly better at the national level than those posted by program non-participants (84.1% versus 71.1%, respectively). Statistically measurable differences in line with the national findings were also observed across all retail classes of trade, except pharmacies, where refusal rates were high regardless.

Regionally, compliance results are mixed and suggest that, while participation in "Operation ID" may have no detrimental effect on retailer compliance, neither is it a prerequisite for higher rates. Of the thirty cities we visited, we were able to draw comparisons between stores participating and those not participating in "Operation ID". Of the thirty cities, the difference in compliance recorded between participating and non-participating retailers was deemed large enough to be significant in sixteen cities (53% of the sample). Of these sixteen cities, participating retailers in only four of them (25%) were willing to sell more often than non-participating ones. In the other fourteen cities, the opposite was true. In short, significant positive differences attributable to participation in "Operation ID" are found in twelve of thirty cities (40%).

Table 5, Chart 6 and Chart 7 respectively

Table A - Weighted - Sales to Minors Compliance Results by City/Province/Region - 2004

Table B - Weighted - Percent Retailers Refusing to Sell by Region Trended Results

Table C - Weighted - Sales to Minors Compliance Results by City/Province/Region Based on Retailer Participation in Operation ID - 2004

2. Tobacco Sales-To-Minors Legislation: Compliance with Posting of Tobacco Age Advisory/Health Warning Signs (Tables D and E)

The percentage of retailers in full compliance with the posting of mandatory tobacco age and health advisory signs was 56.5%. This figure represents the weighted percentage of retailers across all thirty cities visited that met every sign compliance condition we measured.

The current level is the highest it has been since the start of national measurements in 1995. The historical trend reveals an upward move in the compliance levels with a slight levelling off in 1997 and 2002.

Higher sign compliance rates nationally stem from increases in thirteen of thirty cities visited. The largest and most significant increases (i.e., double-digit increases) are from seven cities, where the straight average of the jump is 33.7 points. These cities are:

• Sydney (+51.8 points)
• Saint John (+ 48.2 points)
• Toronto (+ 42.0 points)
• Thunder Bay (+ 27.7 points)
• Brandon (+ 27.5 points)
• Saskatoon (+22.6 points)
• Halifax (+ 16.3 points)

These cities represent several provinces and are legislated under a variety of tobacco laws.

There are seventeen of thirty cities where retailer compliance with the posting provisions of the tobacco laws deteriorated over levels in 2003. The straight average of the decrease across all seventeen cities is 38.2 points, but the largest drop occurred in fourteen of the cities (double digits). These cities are:

• Medicine Hat (-91.8 points)
• Kingston (-81.7 points)
• Red Deer (-64.6 points)
• Ottawa (-62.4 points)
• Charlottetown (-47.2 points)
• St. John's (-46.2 points)
• Moncton (-43.1 points)
• Bathurst (-43.0 points)
• Chicoutimi/Jonquière (-40.0%)
• Campbell River/Courtnay (-35.2 points)
• Sudbury (-20.8 points)
• Kelowna (-20.5 points)
• Vancouver (-17.8 points)
• Sherbrooke (-11.9 points)

The table below records the cities with highest and lowest levels of retailer compliance with the sign provisions of the tobacco laws: Highest compliance was in five cities where the percentage of stores in full compliance was eighty or better. Lowest compliance was in fifteen cities where the percentage of stores in full compliance was below the national average (i.e., less than 56.5%).

Table D - Weighted - Sign Compliance Cities Reporting Highest and Lowest Retailer Compliance 2004

All of the cities are from provinces where tobacco laws require more of retailers than the posting of a single mandatory sign. In Ontario, for example, the law requires that three different signs be posted. The poor showing in Ottawa is directly attributable to retailers in this city routinely posting only two of the three necessary signs, failing mostly to post the "No Smoking" sign also demanded by the law.

Table E - Weighted - Retailer Compliance with Mandatory Sign Provisions - 2004

3. Retail Advertising at Point-of-Sale (Table F)

In a manner consistent with past surveys, CRG this year collected information on tobacco point-of-sale (POS) advertising permitted under the Tobacco Act.

The information summarized in this section was collected based on the presence in-store strictly of advertising bearing printed trademarks, logos or brand names belonging to tobacco companies. Sponsored event ads void of such trademarks, logos or brand names are excluded from the calculations.

Nationally we found in-store tobacco-related advertising elements in more than forty percent (44.3%) of stores. This is a weighted figure and is an estimate of conditions we likely would have found had all stores in the universe been visited, not just a sample of stores. This distribution figure represents the second increase in the past four surveys and is showing the highest ever recorded average to date. Coupled with an increase in the average number of ads found in those stores with ads, the indication is that tobacco manufacturers increased point-of-purchase support behind their brands in 2004.

The cities where tobacco ad distribution increased the most are listed in Table 21. In the majority of these cities, distribution jumped by more than fifty percent this year.

Counter-top displays continue to be the most widely distributed tobacco brand advertising medium. These were found in a quarter of stores nationally (24.2%), down slightly from 2003 levels. The form of advertisements, danglers, shelf-talkers and posters has increased in the last year, making for a more varied mix of forms of advertisement across the nation.

The weakest locations where tobacco ad distribution was found this year was Kelowna, Charlottetown and Medicine Hat.

Small surface retail stores (chain and independent convenience and gas stations) remain more likely than larger surface stores to carry tobacco POS merchandising materials. Almost two thirds (64.7%) of convenience chains nationally carried POS advertising, followed by independent convenience stores (50.6%) and gas stations/kiosks (50%).

Nationally, the percentage of stores carrying tobacco ads has risen across all store types, except pharmacies. Numerically, fewer pharmacies than ever are selling tobacco.

Nationally, no statistically meaningful difference exists regarding the availability of tobacco advertising based on the proximity of stores to schools or malls. Across all cities, ad distribution was 42.2% in stores closest to schools/malls and 46.3% in stores further away.

Among stores with ads, the average number of tobacco POS ad pieces carried was 2.6 pieces per store, up from 2.4 pieces a year ago.

The table below summarizes the cities with the highest and lowest levels of tobacco POS ad distribution, as well as the change in distribution over 2003:

Table F - Weighted - All Stores Changes in POS* Ad Distribution Across Regions - 2004 vs. 2003 Results Percent of Stores with Ads (Cities with 0.0% indicate no ad distribution)

Point of Sale

CRG monitored POS advertising by tobacco brand in convenience chains, independent convenience stores and gas stores. The following brand-related observations hold for these classes of trade:

• Nationally, no single brand had ads in more than a third of these stores. The brand with the greatest distribution was du Maurier, with ads available in 44.5% of chain convenience stores, 26.3% of independent convenience stores and 29.7% of gas stations;
• distribution for all "Other" brands (not separately specified) was actually second highest than that for any other single brand across each of these classes of retail trade;
• the share of ads enjoyed by tobacco brands across cities and trade classes coincided closely with the percent of stores carrying each brand;
• within each store type, stores with ads now carried more than two ads, on average, per store. In each trade class the average number of ads carried is higher in 2004 than in 2003. Chain convenience stores with ads carried the largest number of ads (2.6 ads on average). Gas station and independent convenience stores with ads each carried a little less than two ads per store (1.9 and 1.8 ads on average, respectively);
• counter-top displays, which used to be the predominant advertising vehicle in all three channels of trade has now dropped significantly and the shelf-talker is now being widely used. These two forms of ads accounted for over seventy-five percent of all ads in chain convenience stores (76.7%), more than two-thirds of ads in gas stores (68.2%) and 65.6% of ads in independent convenience stores. In all stores, counter-top displays were the leading ad vehicle for the most advertised brands, but the use of danglers, shelf-talkers and "other" ad forms (not specified) was more pronounced than in the recent past.