FDA HIRING MINORS TO CONDUCT TOBACCO STING OPERATIONS
AAA CONTRACT PRESENTS MORE ISSUES, FEWER BENEFITS
COLONIAL PIPELINE DISRUPTION AFFECTING GAS SUPPLY AND PRICES IN NJ
UPDATES ON GAS TAX/TTF FUNDING AND CREDIT CARD INTERCHANGE FEES

The first issue the week is the start of an effort to uncover tobacco sales to minors.  We’ve learned that the FDA Center for Tobacco Products is hiring high school students under the age of 18 to buy cigarettes and catch people breaking the law.  I’ve been at NJGCA for almost 10 years and I haven’t seen one case like this. Now, in just one week, two members sent me packages of legal documents outlining violations and penalties, including affidavits of undercover officers.  We know that the government is focused on making it harder for young people to access tobacco and get addicted to smoking. You may also remember that when local Mayor and Town Councils wanted to implement a minimum age of 21 to purchase tobacco, they also chose to dedicate the fee that was  imposed on local cigarette retailers to the expansion of undercover enforcement. I hope I'm wrong, but my instinct tells me that these efforts will continue and I will begin seeing these cases come across my desk at a rapid pace.
 
Here are some additional details about how the undercover effort works: A 17 year old gets sent into a location to attempt to purchase cigarettes. An adult enforcement officer is always watching from a safe distance, observing the transaction as both a means of verification and protection for the minor making the purchase. They need to see if the sales clerk asked for ID and if a sale was made.  Although the federal age to purchase tobacco is 18, New Jersey’s threshold is 19 years old, and about 15 municipalities in NJ have implemented laws to make it legal only at 21 years old. Should you allow anyone under the age of 18 to purchase cigarettes, you have technically broken a federal law, a state law, and quite possibly a municipal law.
 
The penalties I have seen range from $500 to $5,500.  I shouldn’t have to remind you, but I will. It is imperative that you check the identification and verify the date of birth for anybody looking to purchase tobacco products that appears under the age of 27.  It is also critical that if they don’t have identification or if their birth date does not make them at least 19 years old (or 21 in certain municipalities which have passed harsher local restrictions) you do not sell the tobacco, no matter how much the customer complains!
 
If younger people want to smoke, it is likely that they have someone of the proper age who purchases the cigarettes for them, so if you follow the rules you will stay out of trouble and avoid costly penalties. If you have been contacted by the FDA Center for Tobacco Products, please call the office immediately.  It seems as if many penalties are not arriving until months after the infractions occur.
 
The next issue which has deeply concerned me in recent weeks is the new contract that AAA wants their approved repair shops to sign. There are various clauses that I find extremely troubling.  Additionally, I’m aware of the fact that AAA is diverting tows to their corporate run facilities and all of the AAA-approved shops I’ve talked to have experienced a significant decline in business coming from AAA. After all of the effort that you have made -- working nights, weekends and holidays, in the rain, sleet and snow, to fulfill your obligations to AAA and help them build a respectable reputation -- AAA has violated that trust. How many times did you get up at 3AM to recue a stranded AAA member?  Now that AAA has their own repair facilities, they are trying to steal your customers away as if that loyalty and partnership never existed. One longtime member cited an instance when a very good customer was stranded locally and called AAA for a tow to his shop.  AAA made an aggressive appeal with enticing monetary offers to lure the customer to their own repair center.  That, in my opinion, is dirty and unprofessional especially when my member was such a loyal part of their success. 

AAA made a name for themselves on the backs of shop owners like yourself, whose integrity, professionalism and expertise allowed AAA to provide superior service. But YOU were providing that service, not AAA.  Furthermore, in this day and age, many car manufacturers, dealerships and insurance companies offer roadside assistance with the same reliability that AAA has offered for years, due to your partnership! Let’s think about becoming approved for those other roadside assistance programs, because they rely on qualified and experienced professionals of your caliber, too. It may be time to leave your AAA-accreditation behind since you don’t seem to be gaining any business from it, anyway.

Because of efforts begun over a year ago by our friends in Maryland at WMDA/CAR, AAA has made some changes in the contract that they are requiring to be signed by October 1.  Previously it had included a provision that required you to give them direct access to your customer data base, but now have conceded that you can enter information in to a Web Based Portal. However after reviewing the contract, I am still not comfortable that they aren’t trying backdoor mining of customer information that doesn’t belong to them. All of the instances that have been reported of AAA diverting tows and aggressively stealing customers from their approved shops leaves me very mistrusting.
 
This is a business decision on your part!! If you feel that being part of AAA brings you business and it is worth the annual fee, then sign the contract.  If you have a AAA operated multi bay super service center in your vicinity, then I advise you to think twice, as the experience of others says that AAA will aggressively try to divert your customers in to their shops. I think it is a slap in the face for you to pay them while they steal your customers. If you don’t have a AAA super service center near you, it is less likely that they will be stealing your customers (at least for now until they build one nearby).
 
If you do decide to sign the contract I insist that you add the following as a continuation of Section 4.2: “Club also explicitly represents that ONLY vehicles that are towed to this AAR are subject to reporting using the Web Portal.”
 
You should handwrite that sentence and clearly initial it. On the signature page make a note pointing out that you added the sentence in section 4.2  If AAA is not willing to accept that addition to the contract then I guess you have your answer about what their intentions are. Would you provide customer information to the shop down the street from you? I doubt it. Why provide it to AAA?  Again this is a business decision. I can report to you that our sister association in Maryland WMDA/CAR does not endorse the contract and neither do we here at NJGCA. Our friends in Maryland believe that most of the AARs there will not be signing, with the exception of a few who have shops that aren't located near AAA super service centers.  Please let me know how you make out with this and what you decide to do.
 
I also haven’t addressed the marketplace much in recent months, since it has mostly followed the standard supply and demand formula, which created lower prices because demand is flat and supplies of both crude oil and refined products such as gasoline and diesel have been stockpiled in abundance. However, the equation is affected when unexpected supply interruptions/emergencies occur (such as a storm in the Gulf Coast, or, in the case of recent events, a leak in the Colonial Pipeline causing almost 300,000 gallons of gasoline to spill into the environment). Besides environmental issues arising from that catastrophe, gas supplies along the East Coast have been severely affected and there have been recent overnight increases of as much as 7¢ per gallon. However, the pipeline should be repaired quickly, supplies will resume, and I predict that prices will drop back down to where they were before the accident occurred.
 
I finally have two quick updates for you:

1. I haven’t had much to share in recent weeks regarding progress on funding the TTF and increasing the gas tax. Eric and I continue to meet with legislators and raise concerns about the amount of the increase. We learned privately that discussions have resumed between the Governor and leaders in the Assembly and the Senate to reach a compromise. No one has shared what they think that compromise will be, but we have not heard anything that indicates that the compromise will include NJGCA’s request for a reduction from 23¢ to 18¢. But, let me be clear, I don’t know this for a fact.Legislators are being very careful in their conversations with me, as they are aware of our involvement in the issue and our strong position.
2. Each week for the past month I've wanted to discuss NJGCA’s efforts to pass legislation to reduce credit card fees. We have actually seen some progress and I've been wanting to share it with you. However, each week it gets put off to make room for other “front burner” items. Hopefully I will be able to discuss an update on credit card fees in next week’s Road Warrior.

Thanks for reading -- See you all next week!

Sal Risalvato
Executive Director

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09/21/2016:
FDA Increases Fines for Tobacco Violations
The FDA has announced an increase in the monetary fines that are assessed against retailers violating federal tobacco regulations. The increases were made according to the Federal Civil Penalties Inflation Adjustment Act of 2015, which allows each federal agency to adjust its monetary fines for inflation once a year. Under the terms of this new federal law, the FDA was not required to issue a proposed rule adopting the inflation adjusted monetary fines. The FDA’s new monetary fine amounts apply to retailers assessed with a fine by the agency after Aug. 1, 2016, even if the retail violation or violations occurred as far back as Nov. 2, 2015. The number of violations, previous fine amounts and new fine amounts are available by clicking the link above.
 
09/20/2016:
N.J. gas prices spiking after major pipeline shutdown
Gas prices are rising due to a break in a critical pipeline that is used to ship gas between Houston and New York harbor. The Colonial pipeline was shut down on Sept. 9 after an estimated 250,000 gallons of gas leaked in Shelby County, Alabama, 30 miles south of Birmingham. That pipeline transports about 1.3 million barrels of gas daily and ends in Linden, according to a Colonial Pipeline release. "That pipeline does deliver a lot of fuel to the Northeast, it's the artery, the jugular vein," said Tom Kloza, Oil Pricing Information Service petroleum industry expert. "I think what we'll see is gas prices move up, particularly among the independents, because supplies are not as robust as normal." However, the break in the pipeline was described as a "nick" in the artery by Kloza. What that means at the pump is that drivers could see prices go up by five cents and as much as 10¢, he said. Drivers saw the average price for regular increase to $1.99 a gallon in New Jersey between Friday and Monday evening, GasBuddy.com reported. Discount prices rose to $1.75 to $1.77.
 
09/19/2016:
E-cigarette maker NJOY files for bankruptcy
NJOY, one of the biggest electronic cigarette makers, is going up in smoke. The company filed for bankruptcy protection on Sept. 16 in Delaware federal court, burning some high-powered Silicon Valley investors, including Sean Parker, co-founder of the now-defunct Napster, and PayPal founder Peter Thiel, who were part of a $70 million capital round that valued NJOY at $1 billion in 2013. Singer Bruno Mars is also an investor in NJOY and a fan of the e-cigarettes, which heat nicotine-laced liquid into vapor. Parker, who ponied up $10 million to put into the company, said at the time that electronic cigarettes had the potential to make regular cigarettes “and all the harm they cause obsolete.” The filing comes just five months after new federal regulations from the FDA threaten the fast-growing multibillion-dollar industry that includes tobacco giants Altria and Reynolds, which own MarkTen and Vuse, respectively.