Don’t Get Smoked: Know Tobacco Policy Changes

When customers ask about our prices of tobacco products, here are important talking points to help you answer them accurately.

As parts of the Department of Defense, military exchanges must comply with DoD guidance regarding the sale and pricing
of tobacco.

Beginning in March, a change in DoD policy began requiring tobacco prices in all exchange stores to match the most prevalent prices in the local markets, including local and state sales taxes.

Exchange customers may not understand how pricing and even what we sell depends on DoD guidance. These talking points will help associates communicate the policy change to those they serve:

Q: Why are tobacco prices
being increased?

A: Based on Executive Order 13544, which focuses on the health, productivity and readiness of the military force and harmful effects of tobacco use, a Secretary of Defense memo called for actions to assist in preventing initiation of tobacco use, helping those who want to quit succeed, and decreasing exposure to second-hand smoke.

Q: What is “prevailing local price?”

A: It is the shelf price at which an item is most frequently sold in each market based on unit volume.

Q: How is “prevailing price” in the market determined?

A: An independent, third-party research organization will collect prices from grocery, convenience, liquor, gas, drug and discount stores in each market and determine the most common price for each tobacco product. The survey will be conducted four times a year, and prices will be updated accordingly. 

Where use of a commercial third-party vendor is not available in a particular market or where funding for commercial third-party data is determined as not available, tobacco pricing surveys will use the lowest price as a proxy for prevailing price.

Q: What tobacco products
are included?

A: All tobacco products, including cigarettes, cigars, smokeless and e-cigarettes.

Q: If I find a lower price at another store, will the military exchange match it?

A: No, tobacco items are excluded from price matching.

Q: Are OCONUS prices affected?

A: Yes. Outside the United States, prices will be set within the range of prevailing prices for the same product at military exchanges in
the U.S.

For more information, read the Armed Services Exchange Regulations DoD Instruction 1330.21.

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