Bans on Smoking in Prison Shrink a Coveted Market
RIKERS ISLAND, N.Y. -- For years, inmates trekked to the commissary, off a dingy hallway here in this huge New York City jail complex, to buy cigarettes. Tobacco companies also furnished them with free T-shirts and socks emblazoned with the Kool and Newport logos. Cigarette makers gave the jail sports equipment, board games and, for a time, cash awards that funded antiviolence videos and inmate holiday parties.
Then, in April, New York City banned smoking behind bars. Alvin Mack, a commissary manager at Rikers, says he hasn't yet figured out how to replace thousands of dollars a day in lost cigarette sales. He recently added portable radios to his inventory, but no one needs a new radio every day.
Across the nation, restrictions on smoking in prisons are writing a new chapter in the long, lucrative history of the cigarette industry and one of its most devoted markets. About two million people are now incarcerated in U.S. prisons and jails, and an estimated 70% to 80% of them are smokers, according to studies by health officials of inmates in Illinois, Texas and New Mexico. That compares with 23% of the adult U.S. population at large. A store in a large prison can gross $500,000 a year in tobacco sales, double the average of a typical Wal-Mart.
In-house stores at Vermont's eight state prisons grossed about $3.4 million in tobacco sales in the year ended June 25, the state says. About a third of that, or $1.1 million, was the prison system's markup, or profit. That's money the state will lose when a prison tobacco ban takes effect in Vermont in January.
"Once you give up the cigarettes, a lot of money goes out the door," says Lawrence McLiverty, director of security for Vermont's Department of Corrections. He says cigarette profits have been used in his state to pay for recreation equipment, crafts instruction and assistance to prisoners' relatives who travel long distances for visits. The programs will probably be cut back, he says. Vermont's total prison budget is $95 million.
Concerns about the health dangers of second-hand smoke have prompted 17 states to ban cigarettes in their prisons since the early 1990s, according to the American Correctional Association, a trade group. Beyond the bans, many additional states curtail smoking by inmates, often allowing them to smoke only when they are in the prison yards. In addition, a nationwide settlement of state lawsuits banned cigarette makers, beginning in July 1999, from using clothing and sporting goods to promote their brands. Although the ban doesn't explicitly apply to prisons, the industry has followed it in that setting, too.
Smoking has long played a central role in prison culture -- a fact that didn't escape the notice of tobacco companies. The manufacturers of Newport, Kool, Camel and other brands deployed their full arsenal of marketing tools to secure space on prison-commissary shelves: free promotional clothing and sports gear; 2-for-1 deals; and, in some cases, cash "donations" to corrections departments.
Today low-end brands are making inroads into the prison market, especially those selling roll-your-own tobacco with brand names such as 4 Aces and North. Just as these cheap knock-offs are gaining market share in the free world, they are carving out a niche in the 31 states that still allow smoking behind bars, as well as in the federal system's 103 prisons.
From the turn of the century through the 1980s, wardens in many prisons gave inmates free cigarettes. Facilities in Florida, Michigan and elsewhere became cigarette producers themselves. Inmates at Menard Correctional Center in Illinois made cigarettes from the 1940s through the late 1990s. The state sold inmates its house brands, Pyramid and Southern Lights, for only 35 cents a pack, generating profits of $47,000 in 1997. The money was used to support prison work programs and other operations.
Illinois legislators ended the manufacturing program in response to the wave of lawsuits filed against the major tobacco companies in the mid-1990s by all 50 states. Illinois worried that its own cigarette operation could be seen as similar to that of the commercial manufacturers being sued. "The liability was too great," says Brian Fairchild, an Illinois corrections spokesman. "Times change."
Internal industry memos and marketing plans that surfaced as a result of the landmark state suits against the tobacco companies show that in the early 1980s, the companies began focusing more intensely on what some industry executives referred to as the "institutional market."
Four times a year during the early 1980s, Brown & Williamson Tobacco Corp., today the No. 3 U.S. cigarette maker, sponsored a "Captive Audience Prison Program" for its Viceroy brand. The company provided a five-cent discount to smokers in 12 prisons in unspecified states. An internal company document described the program as "immediately profitable" in 1983. "Test results show 450% sales increase during the promotion month and 250% increase in sustaining two months," the internal memo said.
"It doesn't take a rocket scientist to figure out that when smokers are either bored or under stress they might use more tobacco," Mark Smith, a spokesman for B&W, a unit of British American Tobacco PLC, says today.
Anthony Lindsay, a 24-year-old inmate serving 18 months for bank fraud in the federal prison in Otisville, N.Y., agrees: "These dudes don't care about pollution from smoke and butts. They care about getting by, day by day. They smoke to stay calm and avoid fights."
For much of the 1980s and 1990s, Lorillard Tobacco Co. came up with inventive ways to boost sales behind bars, according to internal company documents. The Loews Corp. unit's "Play Ball With Newport" program encouraged inmates to pass along empty Newport packs to prison officials, who bundled them together and traded them in to Lorillard for weightlifting equipment, basketballs and board games. Prisons and jails in New York, Illinois, Texas, Missouri, Georgia, Kansas and South Carolina participated, according to company documents.
In the "Great Newport Sneaker Deal," a similar program that ran from 1990 through 1997, Lorillard provided a pair of running shoes or high-tops for each batch of 300 to 400 empty packs. "It's very common to have a loyalty program based on what the retailers want," says Steven C. Watson, vice president of external affairs at Lorillard, Greensboro, N.C. "In this case, the prisons would say, 'Why don't you buy us sneakers?' "
Lorillard spent a total of about $1.4 million from 1990 through 1997 on the "Play Ball" and sneaker programs, according to a 1997 internal company document. By that year, the company's cigarettes were sold in more than 575 prisons and jails, commanding a 14.5% share of the nationwide inmate-tobacco market, the document estimated.
Manufacturers also targeted inmates with advertising. From 1994 to 1996, Lorillard spent an estimated $24,000 annually for a series of Newport ads on back covers of Prison Life, a now-defunct magazine for inmates. One Newport ad featured an African-American couple hula-hooping. An internal company media plan from that period noted that Prison Life reached a "high composition of smokers" and a "heavy ethnic" audience.
For much of the 1990s, Philip Morris USA, now a unit of Altria Group Inc., and R.J. Reynolds Tobacco Holdings Inc., the Nos. 1 and 2 U.S. manufacturers, respectively, offered price breaks on some of their brands to inmates held at Rikers Island, among many other institutions. Philip Morris, for example, provided Virginia Slims playing cards and 2-for-1 deals on its Benson & Hedges cigarettes. "History tells us that once we land business in the prison store, it's ours to keep," a 1994 internal Philip Morris memo said.
A November 1995 internal Rikers document noted that the then-18,000-inmate jail rang up annual tobacco sales of $5 million, including a 30% markup by the institution's commissary. Manufacturers offered an impressive tally of inducements to ensure their brands remained in stock. Through the "Play Ball" program, Lorillard annually gave Rikers basketballs, ping-pong paddles and other sporting goods valued at about $25,000. The company and its rivals each year donated logo-emblazoned shirts and socks valued at $20,000, according to the Rikers document.
The bequests included 500 domino sets, 500 chess and checkers games, 500 Scrabble boards, 615 footballs, 1,000 basketballs and 30 basketball nets -- all during one three-month period. Rikers also got Uno games, volleyball nets and pole sets, weightlifting equipment, gym mats and softball gear.
"Tobacco companies have viewed prisoners as a strategic market for cigarettes because inmates are an entree to a big cultural market," says Martin Horn, the former chief of Pennsylvania's prison system and since January the head of New York City's jail system, including Rikers. "Prison styles often filter out into the broader world, and to the extent that smoking is cool in prison, it will be cool on the street."
In the late 1990s, Lorillard sent company representatives to meet personally with jail-approved inmate-council leaders to discuss what free merchandise they would prefer, the company's Mr. Watson says. The meetings were set up with the assistance of jail officials, he says, but haven't occurred lately.
The Rikers document from 1995 also said that the jail was receiving $200,000 in annual cash donations to inmate programs from Lorillard and B&W. During the late 1990s, Rikers officials asked the pair of tobacco companies to shift their promotional largesse from free merchandise to cash -- sometimes referred to as "rebates" -- that flowed to the institution's coffers.
Such rebates are common among marketers trying to boost sales of their brands through retailers both inside and outside prison walls. Lorillard and B&W paid a total of more than $800,000 to Rikers during the late 1990s, according to Rikers officials. The money was used to pay for inmate-orientation videos, refreshments for law-enforcement personnel and inmate holiday parties, Rikers officials say.
City officials and tobacco-company spokesmen say the cash rebates to Rikers ended in 2001, in part because of concerns within city government about how to account for the money.
In the past two years, the major industry players have ended most of their special inmate-marketing programs. In an era of ferocious price competition in the larger cigarette market, offering special deals in prisons came to be seen as too costly, and the related paperwork too cumbersome, company officials say. "At this point in time, we don't have a prison program," says Stephen Kottak, a spokesman for B&W.
With major-brand cigarettes now costing anywhere from $3 to $8 a pack in prisons, depending on location, there is an opening for bargain-priced brands. The hottest smoking trend in many prisons is inexpensive roll-your-own tobacco, which appeals to cash-strapped inmates.
Nationwide Tobacco Inc., a closely held company in Blaine, Wash., that imports tobacco from the Philippines, touts itself as "Your Only Prison Choice!" in mailings and handouts to prison-commissary managers. Three-quarters of an ounce of Nationwide's Sixty 1 Menthol brand leaf -- enough for 20 smokes, or one pack -- sells for only 85 cents at the Mississippi State Penitentiary in Parchman. In a marketing gambit others are trying as well, the company sells its tobacco in clear plastic bags created specifically for the inmate market, so that contraband can't be hidden within.
Nationwide's sales at Parchman totaled $44,600 in 2002, its first year on that facility's commissary shelves. That was about 8% of the prison's total tobacco sales of $530,068 last year. Nationwide also sells tobacco to state prisons in Mississippi, Iowa, California and Louisiana. "We're pursuing prison sales like crazy," says national sales manager Ken Davidson. "Inmates don't complain, they don't send the tobacco back, as you'll find from retail customers." Nationwide's newest line of products includes a 8?-inch-high resealable plastic tub filled with six ounces of "extra menthol" loose tobacco.
Chewing tobacco isn't carried in all prisons stores, because guards often fear inmates may use the wet tobacco to jam locks and create other security hazards. When available, snuff and chewing tobacco are often a popular low-cost alternative to smokes. They accounted for nearly 11% of sales at the Parchman prison last year.
Barry Greenspan, president of Newark Tobacco and Candy, a wholesale supplier that buys from manufacturers and resells to state prisons in northern New Jersey, says that sales of roll-your-own have grown steadily in his region and now constitute about 35% of prison-cigarette sales. Overall tobacco demand in his region has remained constant, he says, while "a lot of inmates are switching to roll-your-own." The wholesaler adds: "Most people have other things to do. I guess the prisoners have time to roll them."
The big manufacturers have noticed what is going on. Lane Ltd., a sister unit of B&W within British American Tobacco, sells loose tobacco under the Midnight Special brand. Jim Burns , Lane's director of corporate and regulatory affairs, says that with expensive regular cigarette brands now out of the reach of some inmates, "The institutional market is big business for us."
监狱禁烟有点烦
多年来，在庞大的纽约市监狱里，犯人们穿过阴森肮脏的走廊，走很远的路去狱中的供销部购买香烟。除了香烟，烟草公司还向犯人们免费提供印有Kool和Newport品牌标识的T恤衫和短袜。这些生产商们还向监狱提供运动器材和棋类游戏设备，有时还提供资金，赞助反暴力的教育录像以及狱中假日联欢活动。
可是在今年4月份，纽约市颁布法令，禁止在监狱里吸烟。里克斯监狱(Rickers)供销部经理阿尔文．麦克(Alvin Mack)表示，他还没想出如何弥补一天上万美元的香烟销售收入的办法。近来，他在小店里新添了便携式收音机，但没人会每天需要一个新的收音机。 监狱一直是烟草业最可靠的市场，而全美的监狱禁烟规定为烟草业历史悠久的赚钱历史书写了新的篇章。根据伊利诺斯州、德克萨斯州和新墨西哥州负责公众健康的官员所做的调查，美国监狱里目前大约囚禁著两百万名犯人，其中约70%至80%的犯人为吸烟者。相比之下，在美国的成年人中，吸烟人数只占23%。一所大型监狱的商店一年的香烟销售收入可达50万美元，是一家沃尔玛(Wal-Mart)连锁店平均收入的两倍。
佛蒙特州称，在截至今年6月25日的过去一年里，该州8所州监狱里的商店共获得约340万美元的香烟销售收入。其中三分之一，即110万美元左右，是监狱系统所获的利润。从明年一月开始实施的禁烟令将使该州失去这笔收入。
佛蒙特州矫治部(Department of Corrections)负责安全事务的主任劳伦斯．麦克利维特(Lawrence McLiverty)说："禁烟令一旦实施，监狱就会失去大笔收入。"他表示，在该州，出售香烟带来的收入过去被用于购置康乐设备、就业指导以及资助犯人亲属的长途探访。但今后，这些活动可能被削减。佛蒙特州监狱的预算总共为9,500万美元。
贸易团体美国矫治协会(Amercian Correctional Association)称，自九十年代以来，由于担心被动吸烟造成的健康危害，已有17个州禁止本州监狱犯人吸烟。除了禁烟令外，其他许多州也对狱中吸烟提出了限制，通常只允许犯人在庭院中吸烟。此外，一项诉讼案件的审理结果判定，从1999年7月开始，全美的烟草商不得通过服装和运动器材宣传自己的品牌。虽然这项禁令并没有明确针对监狱，但烟草业在监狱中也不敢越雷池一步。
长期以来，吸烟一直是监狱文化的核心活动，这一事实显然逃不过烟草公司的眼睛。Newport、Kool及Camel等品牌香烟的制造商们施展了所有的营销法宝，目的就是为了确保在狱中商店里的一席之地。他们提供免费的衣服和运动器材、推出买二送一活动，有时候还向矫治部门捐赠钱款。
如今，低档香烟已打入监狱市场，特别是那些出售手工卷制香烟的品牌，如4 Aces和North等。正如这些廉价的仿制品在自由世界里不断赢得新的市场份额一样，它们在国内31个仍允许犯人抽烟的州里，以及103所联邦所属监狱里打开了一个新天地。
从20世纪初到八十年代，许多监狱里的狱警一直向犯人提供免费香烟。佛罗里达州、密歇根州和其他地方的监狱本身就生产香烟。伊利诺斯州Menard矫治中心(Menard Correctional Center)的犯人从四十年代到九十年代一直制造香烟。该州还向犯人们销售监狱自制的牌子Pyramid和Southern Lights，每包仅售35美分，在1997年一年就获利4.7万美元。这笔钱被用于资助监狱建设项目和其他活动。
在九十年代中期，全美50个州向大型烟草生产商提起诉讼。在这一片诉讼浪潮中，伊利诺斯州的立法者们终止了监狱的香烟生产活动，因为他们担心大家误解，以为这种行为与那些正被起诉的商业企业的活动没什么两样。伊利诺斯州矫治部的发言人布赖恩．费尔柴尔德(Brian Fairchild)说："责任太大了，时代不同了。"
在八十年代早期，各州政府对烟草公司提起了具有划时代意义的诉讼。当时披露的烟草公司的内部备忘录和行销计划显示：生产商们开始更加重视被一些高级主管称为"机构市场"的领域。
现在是全美第三大香烟制造商的Brown & William Tobacco Corp在八十年代早期的一年中曾连续四次为旗下品牌Viceroy举办赞助活动，旨在吸引监狱里的犯人。该公司当时向一些州的12所监狱里的吸烟者提供5美分的折扣。该公司1983年的一份内部文件称这项计划收到了"立杆见影的效果"。这份备忘录称："结果表明，在举办促销活动的当月以及接下来的两个月里，销售额分别增长了450%和250%。"
Brown & William是英美烟草公司(British American Tobacco PLC)旗下的子公司，发言人马克．史密斯(Mark Smith)表示："当吸烟者感到乏味，或处于压力之下时，他们也许需要更多的香烟，这一点无须火箭专家来证实。。"
现年24岁、在纽约州联邦监狱服刑的安东尼．林赛(Anthony Lindsay)表示赞同："这些花花公子丝毫不在乎烟酒带来的危害。他们只想过一天混一天，吸烟能使他们保持镇静，避免争斗。"林赛因银行诈骗案被判刑18个月。
公司内部文件显示，在八十年代到九十年代的不少时候，Lorillard Tobacco Co.想出了很有创意的点子来提高监狱里的销售额。这家Loews Corp.的子公司推出了"与Newport同行"活动，鼓励犯人把空的Newport烟盒交给监狱的管理人员，后者把盒子收集起来给Lorillard，以换取举重设备、篮球和棋类游侠设备。资料显示，纽约州、伊利诺斯州、德克萨斯州、密苏里州、乔治亚州、堪萨斯州和南卡罗来纳州的监狱参加了这项活动。 在另一个名为"赢取Newport运动鞋"的类似活动中，犯人们只要集满300到400个空盒子，Lorillard就提供一双跑鞋，或高统运动鞋。这项活动从1990年延续到1997年。 该公司负责对外事务的副总裁史蒂文．华生(Steven C.Wastons)说："企业针对零售商的需要，推出提高忠诚度的活动是很普遍的。在这一活动中，监狱会问'你为什么不给我们买运动鞋 ？'"
根据公司内部文件，从1990至1997年，Lorillard在上述两个项目上总共花费了140万美元左右。这份文件估计，到1997年，该公司向超过575家监狱出售香烟，占全国监狱香烟市场的14.5%。
香烟生产商们还通过广告向犯人做宣传。从1994到1996年，Lorillard每年为刊登在名为《狱中生活》(Prison Life)的杂志封底的Newport系列广告投入约2.4万美元。这本杂志现已停刊。其中一期广告以一对非裔美国人夫妇玩呼拉圈为主题。该公司当时的一份宣传计划指出，吸烟者在《狱中生活》的读者群中所占比例很高，而且读者族裔不同的人群。
在九十年代的不少时间里，美国第一和第二大香烟生产商Philip Morris USA（现为菲利普莫里斯集团(Altria Group)的子公司）以及雷诺兹烟草控股公司(R.J. Reynolds Tobacco Holdings Inc.)都向许多监狱推出了针对某些品牌香烟的打折计划，包括被关押在里克斯岛上的犯人。例如，对于旗下的Benson & Hedges牌香烟，菲利普莫里斯就推出赠送Virginia Slims游戏牌和买二送一活动。该公司1994年的一份文件称："历史告诉我们，一旦我们在监狱商店里露了面，我们就要扎根。"
里克斯1995年11月份的一份内部文件指出，这所关押著1.8万名犯人的监狱的年香烟销售收入达到了500万美元，其中30%是监狱商店获得的利润。香烟生产商们施展了各种手腕，来确保自己的品牌拥有一席之地。通过"与Newport同行"活动，Lorillard每年向里克斯提供价值在2.5万美元左右的篮球、乒乓球拍以及其他运动器具。根据里克斯的文件记录，该公司及其竞争对手每年还捐赠价值为2万美元的印香烟品牌标志的衬衫和短袜。
其他捐赠包括500多米诺骨牌、500副国际像棋和西洋跳棋、500副拼字游戏板、615个足球、1,000个篮球和30个篮球网，所有这些在前后三个月内赠送的。Rikers还获得Uno游戏、排球网和球杆、举重设备、健身垫和垒球器材。
马丁．霍恩(Martin Horn)曾担任宾夕法尼亚州监狱系统负责人，从今年一月开始负责纽约市的监狱系统，包括里克斯监狱。他表示："烟草公司把监狱视为一个战略市场，因为犯人们是通向大型文化市场的入口。监狱里的行事风格常常渗透到更广阔的世界中，以至于吸烟在监狱里很酷，那么它在大街上就很酷。"
Lorillard的华生说，在九十年代晚期，该公司曾派代表与经过监狱批准的囚犯组织的领导会面，讨论犯人们对哪些免费提供的器材感兴趣。这些会面得到了监狱官员的支持，但近来没有再进行过。
里克斯那份1995年的文件还表明，该监狱从Lorillard和B & W那里收到了20万美元的现金捐赠。在九十年代后期，该监狱的主管还要求一些烟草公司把免费赠品变成现金，进而流入监狱的保险箱里，这些现金有时被称为"回扣"。
在那些通过监狱内外的零售商提高产品销售额的市场行销人员看来，给予回扣实在很平常。里克斯的管理人士称，Lorillard和B & W在九十年代后期向该监狱共支付了80多万美元。这笔钱被用来购买教育犯人的录像、为执法人员提供餐饮以及资助犯人们的假日联欢活动。
纽约市的官员们和烟草公司的发言人称，给予里克斯的现金回扣在2001年终止，部份原因是市政府感到难以解释钱的来源。
在过去两年里，大型烟草公司已终止了大部份针对监狱犯人的特别行销计划。企业主管们表示，如今，烟草市场上的价格竞争异常激烈，而向监狱提供优惠计划被视为代价太高，而且相关的文牍工作又很繁琐。B&W的发言人斯蒂芬．科特克(Stephen Kottak)说："当前，我们没有面向监狱的促销计划。"
目前，根据不同的地域，监狱里各大品牌香烟的售价在3至8美元之间，因此廉价香烟有进入的机会。在许多监狱里，时下最流行的是抽廉价的手工自制香烟，这对手头没钱的犯人们很有吸引力。
位于华盛顿州的Nationwide Tobacco Inc.是一家私人控股公司，从菲律宾进口烟草，并在致监狱商店经理的邮件和宣传资料中标榜自己是"你在狱中的唯一选择"。在位为Parchman的密西西比州州监狱，该公司的Sixty 1 Menthol牌烟叶的价格为每四分之三盎司－－足以卷制20支香烟，即一包香烟─卖85美分。在众多公司参与的市场行销战中，该公司把烟草装入一种专为监狱市场设计的透明塑料袋，这样一来，违禁品就不能混入其中了。
去年，即进入这所监狱的第一年，Nationwide的销售额达到了44,600美元，约为该监狱当年香烟销售总额530,068美元的8%。该公司还向该州的其他监狱，以及爱荷华州、加利福尼亚州和路易斯安那州的监狱出售烟草。该公司的销售经理肯．戴维森(Ken Davidson)说："我们拼命提高监狱的销售额。犯人们不会向我们投诉，他们不会像有些零售商那样把烟草退回来。"该公司的最新系列产品包括8.5英寸高的可反覆密封的塑料盆，里面是6盎司的散装烟草。
并不是所有的监狱商店都出售咀嚼烟草，原因是狱警们都担心犯人们可能会利用湿烟草来堵塞锁，或造成其他安全隐患。当商店里有卖的时候，鼻烟和咀嚼烟草通常很受欢迎，是香烟的低价替代品。去年，它们占Parchman监狱香烟销售额的近11%。
批发供应商Newark Tobacco and Candy从烟草公司处购买香烟，然后出售给位于新泽西州北部的州立监狱。该公司的总裁巴里．格林斯潘(Barry Greenspan)表示，该地区的手工卷制香烟销售额已稳步上升，目前占监狱香烟销售额的35%左右。他说，该地区的香烟总需求没有变动，但"许多犯人转向了手工卷制香烟。"他补充道："大多数人有其他事要做。我估计犯人们有时间自己卷烟。"
大型烟草生产商们已注意到所发生的一切。与B&W同属英美烟草公司子公司的Lane Ltd出售Midnight Special牌散装烟草。Lane负责经营及监管事务的主管吉姆．彭斯(Jim Burns)表示，由于犯人们买不起某些高档香烟，"监狱市场对我们而言是个好机会"。
