UPS Inc., the world’s largest shipping service, announced Monday that it is ending its nationwide shipment of cigarette orders to individual consumers, prompting criticism from advocates who think new regulations could spur a decline in internet shopping.
This action is the latest in state and federal efforts to regulate internet cigarette taxation, in addition to the invoices that the State Department of Revenue is sending to Massachusetts cigarette consumers for the tax they owe on each pack purchased on the internet.
The new UPS regulation will go into effect on Nov. 21, and because UPS is the nation’s leading internet shipping provider, cigarette consumers believe this measure will further impede internet cigarette sales.
“It’s really cowardly of these companies to collaborate with state governments to further in their browbeating, buying and overtaxing of smokers,” said Stephen Helfer, director of Cambridge Citizens for Smokers’ Rights.
Helfer said the new UPS regulation could have a negative effect on the entire internet shopping market, and he thinks the state and federal governments should not have the power to coerce businesses to do something that should be addressed through public policy.
“The online market is in jeopardy,” he said. “The more the government imposes itself in a super-legal way, although it’s not good for targeted cigarette companies, [it] may not be good for other internet business as well.”
Stephen Holmes, a UPS spokesman, said the company is facing this “unique” situation because of the internet cigarette taxation controversy and changed its policy because it was too difficult to keep up with differing state regulations.
“You have to step back and say, ‘Is it worth it?'” Holmes said. “We’re making a prudent business decision and we’re better off to apply just one consistent policy.”
Twenty-eight states have implemented new laws regarding the shipment of cigarettes, and UPS decided that complying with so many different operating plans would be inefficient and infeasible, he said.
“If you look at top online retailers, UPS is the deliverer of choice,” Holmes said.
Although UPS is no longer delivering cigarettes to consumers, he said the company would continue to service licensed dealers, retailers and distributors.
A spokeswoman for Federal Express, one of UPS’s shipping competitors, said FedEx has never shipped cigarettes to consumers.
“Online [cigarette] shipping to consumers has been a big issue, but we have never done that and we will not do that now,” FedEx spokeswoman Sandra Munoz said.
Munoz said FedEx only delivers cigarettes to distributors and retailers — not to individual customers — because of the differing state requirements.
Consumer rights groups like the nonprofit Massachusetts Public Interest Research Group said they understood why UPS would stop shipping internet cigarettes to consumers.
“It’s probably a good thing the postal service is doing this, because if they did ship the cigarettes, they would be helping internet companies break individual states’ laws,” said Eric Bourassa, a consumer advocate for MassPIRG.
Bourassa said the group stands for consumer rights — not for breaking the law — but questioned why the government isn’t directly taking a harder line with the internet companies.
“Because each state has different rules, it goes to show how unregulated the internet is,” Bourassa said. “I’m surprised the attorney general doesn’t just go after the internet sites.”
In response to the Revenue Department’s decision to tax internet cigarette consumers for past purchases, Bourassa said, the consumers are victimized by these additional taxes and should consider another venue to purchase cigarettes.
“The ones that should be held accountable for the taxes are the manufacturers or the internet companies,” Bourassa said. “Consumers aren’t aware of how much cigarettes tax is. For them to buy something and to be sent an extra bill later – that’s not fair.”