A Disappearing Machine

FAYETTEVILLE - There are 81 licensed cigarette vending machines left in Arkansas, but a double punch of tax increases last month could push the species further toward extinction.

"With the new tax, those 81 will disappear," predicted Jim Glidewell, owner of Glidewell Distributing Co. in Fort Smith.

The high prices perturb customers, and the hassles of configuring the aging machines to handle the higher costs outweigh profits for operators, said Steve Woodard, owner of Woodard Amusement of Clarksville.

By the mid-20th century, Arkansas had thousands of cigarette machines at restaurants, bars, bowling alleys and filling stations - just about anywhere people gathered. But the number has been dwindling since the late 1980s.

Once common in all 75 counties, only 12 Arkansas counties now have licensed cigarette machines. Pulaski County has the most with 30, followed by Garland County with 22. Sebastian County, where Fort Smith is located, has the third-highest number of cigarette machines in the state - 17.

The machines must be licensed through the state Tobacco Control Board to be operated legally.

Arkansas implemented a 56-cents-per-pack tax on March 1, after House Bill 1204 was passed by the Legislature on Feb. 12 and became Act 180. The major cigarette companies pre-empted a 62-cents-per-pack federal tax increase by raising their prices in March instead of April 1, when the law went into effect.

Prices for cigarettes sold through vending machines in Arkansas also went up last month. In Northwest Arkansas, vending machine cheap cigarettes now cost $7.50 to $8 per pack. Most of the old mechanical pull-slot National Vending machines have been replaced by snack machines that accept dollar bills and can be used to dispense cigarettes by the pack.

Glidewell said the gross revenue of all discount cigarettes he sells for vending has dropped from $10,000 a week in the 1980s to about $500 now.

Woodard owns five snack-type cigarette machines in Arkansas nightclubs. He said there's little profit in sales through the machines. The owner/distributor has to buy the machines, which cost about $4,000 each, and pay for maintenance, he said.

Distributors also have to pay retail plus sales tax for the cigarettes. When discount cigarettes were selling for $6 per pack through vending machines, Woodard said, his profit was about 50 cents per pack, and that had to be split with the bar owner. At $8 per pack, the profit is closer to 75 cents, he said.

"For a quarter a pack, it was a bigger hassle than it could ever be worth," huffed Woodard. "I turn down tons of cigarette machines. People are always wanting me to put them in. There really is no profit in it."

Part of it is perception, he said.

"The cigarette machines are a hassle because they think you're ripping them off," said Woodard. "It's a burden. The bar owners don't want customers to leave to buy Buy Cigarettes Online because they probably won't come back."

If bar owners keep Cheap Cigarettes Online behind the counter to sell, they could be subject to theft, Woodard said.


Arkansas had 314 licensed cigarette machines in 2003, but neither the Tobacco Control Board nor the state Department of Finance and Administration has numbers before that.

Nationwide, the number of cigarette vending machines peaked around 1986 at about 700,000. The number of machines had dropped to about 60,000 by 2007, according to Vending Times magazine.

From 1997 to 2007, annual sales of cigarettes through vending machines in the U.S. declined from $1.4 billion to $588 million - which translates to about 29 packs per machine per week. Vending machines account for less than 1 percent of the nation's $82 billion in annual cigarette sales.

"There is a very small niche market for them in the United States," Nick Montano, executive editor of Vending Times, said of cigarette machines.

Only one of Arkansas' 81 cigarette machines is in a public place where it must be monitored to limit access by minors. That machine is at Oaklawn Park in Hot Springs, according to the Tobacco Control Board. The rest are in private clubs, factories or other areas where minors don't have access to them. Customers must be at least 18 years old to buy cheap smokes products.

Nationwide, states began restricting access to cigarette vending machines in the 1980s and '90s. Since then, many states - including Arkansas - have banned smoking cigarettes in places accessible to minors.

The first cigarette machines were made in the 1920s, but they didn't become popular until after World War II. For the better part of a century, the term "cigarette machine" meant a machine that dispensed packs of cigarettes. Now, according to a recent Internet search, the term more often refers to a machine for making cigarettes at home.

Andrea Foren, who owns Maxine's Tap Room in Fayetteville, has a 1970s-era machine in her bar, but it won't accept the 22 quarters needed for the $7.50 cost for a pack. It was built in an era when cigarettes cost about 75 cents per pack. She has relegated the machine to a back room, where it sits empty and scorched from a 2006 fire.

"I'd love to buy a new one," she said, "but with this recession the funds just aren't there right now."

Foren said she considered getting a machine that would dispense one cigarette at a time for 50 cents, but that one also was expensive.

Lex Combs had 45 mechanical, pull-knob cigarette machines in 1992. But Combs, who owned Southern Vending in Springdale then, phased them out over the next decade.

"By the time you put $7 worth of quarters down it, the technology wouldn't work," he said. "They would jam up every time if you put that many quarters down them."

Combs considered retrofitting the machines with dollar-bill acceptors or replacing them with snack machines, but those options were too expensive.

"I didn't see enough upside in that investment," he said.

Instead, Combs decided to concentrate on his other business interests - three Tire Tracks retail stores in which he is part owner.

"They stopped making the National Vending machines 30 years ago," Montano said. "They worked perfectly. They still do."

Cajun's Wharf in Little Rock still has one of the pull-knob machines. It's a restaurant, so customers have to go outside to smoke, said Dan Kovach, the general manager.

Also, to buy cigarettes from the machine, a customer has to show the bartender an identification card to prove he is at least 18. The bartender can then turn the cigarette machine on by using a button behind the bar.


Mark Wells, manager of the Electric Cowboy in Fayetteville, said Woodard raised the price of cigarettes in the bar's machine from $6 to $8 per pack in mid-March to cover the tax increases.

The Woodard Amusement machine at the Electric Cowboy also serves as a snack machine.

"We've got Doritos, Marlboros and Camels," said Wells. "Oh, and crackers and cheese. The stuff you might find at the end rack of a feed store."

Wells said about 30 packs of cigarettes are sold a week through the vending machine.

Travis Wooten, bar manager at Brewski's Draft Emporium in Fayetteville, said the owner also bought a snack machine to dispense cigarettes.

"A cigarette machine wasn't an option," said Wooten. "I don't think there were any around."


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