Federal, state, and local governments for many years have sought restrictions on tobacco products, using anti-tobacco campaigns, increased taxes, and outlawing the products in certain buildings and other “smoke free” zones. These regulations restrict the choices that retailers and consumers have, stifling the market.
Although cigarettes and other tobacco products make up $2bn of CVS’s annual revenue, CEO Larry Merlo announced that the pharmacy (of its own volition) will remove the products from its shelves by October 1.
Mr. Merlo’s decision is a powerful example of the free market working without government regulations. CVS Caremark has made a thought out, intentional decision to no longer sell cigarettes or tobacco products in their stores, even though it will likely adversely affect their profits and rearrange their customer base. It may make some of their customers shop with their competition and may bring in some new customers. Other pharmacies may decide to follow this example. Or they may not. Either way individuals will have the choice to buy the products they choose from the retailers that provide the product they desire, and retailers will have the right to determine for themselves what products they will offer.