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December 21, 2005

ConocoPhillips Agrees to Measures Designed to Prevent Tobacco Sales to Minors

DES MOINES.   Iowa Attorney General Tom Miller announced today that ConocoPhillips Company has agreed to policy changes that are expected to discourage underage tobacco sales at over 10,400 gas stations and convenience stores operating under the Conoco, 76, or Phillips 66 trademarks. [Click here for a link to the ConocoPhillips agreement.]

"This is important because almost half of young people who buy cigarettes say gas stations are their primary point of purchase," Miller said.

Iowa was one of 40 states to enter into the accord with ConocoPhillips, one of the nation's largest oil companies. Miller's Office initiated the group of states working to reach such agreements with large tobacco retailers, and similar agreements have been reached with Walgreens, ExxonMobil, Wal-Mart, and others.

Miller said about 10,136 outlets affected by the new agreement are independently-owned businesses with contracts that allow them to operate under one of the ConocoPhillips trademarks. (Another 327 are company-owned.) Under the accord with the attorneys general, ConocoPhillips agreed to include provisions in these contracts expressly requiring compliance with legal prohibitions against tobacco sales to minors. There are currently 268 outlets in Iowa covered by the agreement, Miller said, all independently-owned and operated.

"For too long, underage tobacco sales simply were not taken into account in such franchise relationships," Miller said, "even though such sales harm our young people and erode a company's standing as a good corporate citizen. ConocoPhillips is taking a very positive step by building this important issue into its franchise and trademark license agreements, and we commend them for it."

More details on the ConocoPhillips agreement with the states:

When franchise and trademark license agreements are renewed or new ones are entered into, ConocoPhillips will require franchisees and trademark licensees to report to company headquarters any underage tobacco sales infractions that occur, through law enforcement "stings" or otherwise. "The reporting requirement, coupled with the awareness that violations can jeopardize the right to operate under company trademarks, should be a powerful motivator for independent operators to do everything they can to keep from selling tobacco to minors," Miller said.

ConocoPhillips has also agreed to write to each franchisee and trademark licensee each year to remind them of the importance of preventing tobacco sales to minors and the fact that non-compliance with underage tobacco sales laws could constitute grounds for ending their right to operate under the ConocoPhillips trademarks at the non-complying outlet.

In addition to the requirements relating to independently-owned and operated retail outlets, the agreement with the states contains a series of policies and procedures that will be implemented fully at ConocoPhillips' 327 company-owned and operated stores - and will serve as a model set of safeguards for more than 10,000 independently-owned and operated outlets.

The policies and procedures for ConocoPhillips' company-owned outlets include:

  • Adopting standards for hiring and training employees regarding sale of tobacco products, including instructing employees on the compelling health reasons underlying restrictions on youth access to tobacco.
  • Instructing clerks to check I.D. for all tobacco customers who appear to be under 35, and accepting only valid, government-issued photo-I.D.
  • Using security video-tapes of tobacco sales transactions to monitor compliance, and posting signs warning would-be underage purchasers that their attempt to purchase may be caught on tape.
  • Programming cash registers to aid clerks, when possible (for example, by locking when a tobacco product is scanned, and prompting the clerk to ask for I.D.).
  • Eliminating self-service tobacco displays, including vending machines, and prohibiting distribution of free tobacco products on store property.
  • Arranging for an independent entity to perform random compliance checks involving youthful tobacco purchasers twice each year at each of about 330 company-owned stores, to permit the company to evaluate how well its training and other safeguards are working. ConocoPhillips may reduce and ultimately eliminate the required compliance checks by repeatedly attaining 90% compliance rates.
  • Maintaining a policy against increasing youth demand for tobacco through in-store advertising, and limiting such advertising to brand names, logos, other trademarks, and pricing.
  • Designating an employee who will be responsible for addressing compliance with underage tobacco sale laws, and who will monitor reports of infractions by company-owned outlets as well as by franchisees.

Miller said this is the eighth multi-state agreement with a nationwide or large regional tobacco retailer. Similar agreements have been reached with Walgreens, ExxonMobil, BP Amoco, Wal-Mart, ARCO, Rite-Aid and 7-Eleven. Combined, the agreements affect more than 55,000 retail outlets across the nation.

Iowa Asst. Attorney General Steve St. Clair and California Asst. Attorney General Alan Lieberman led the states' negotiating team in the ConocoPhillips matter.

"Restricting over-the-counter access to tobacco by minors is an important aspect of a public health battle that must be waged on several fronts," Miller said. "A large majority of smokers become addicted by their mid-teens, and the earlier an addiction to tobacco takes hold the tougher it is to quit and the more likely it is that a tobacco-related disease will result. But if a person can reach young adulthood as a non-smoker, he or she will probably never become a victim of tobacco addiction. Clearly, shepherding our young people through the most vulnerable teen years is key to disrupting the pattern of addiction and disease."

The agreement, called an "Assurance of Voluntary Compliance," noted that 47% of youth who report buying cigarettes identify gas stations as their primary point of purchase, and another 27% identify convenience stores. The agreement further noted that every day in the United States more than 2,000 people under the age of 18 begin smoking, and that a third of them will one day die from a tobacco-related disease.

Under the agreement, ConocoPhillips also agreed to pay the Attorneys General $125,000 for the costs incurred by the states in investigation and negotiation.

The 40 participating states are AZ, AR, CA, CO, CT, FL, HI, ID, IL, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NY, OK, OR, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI and WY.

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