COST OF SMOKING GETTING TOO HIGH FOR THE MILITARY (fwd)

HEALTH

With the medical tab rising,the Pentagon is cutting subsidies and allowing
tobacco product prices to go up dramatically.

WAHINGTON Among the many enduring images from World War II, some of the
most compelling involve cigarettes and smoking. Those famous photographs of
FDR flashing his irrepressible grin, a cigarette holder clenched in his
teeth. Bill Maulden's unforgettable cartoons of warweary soldiers,
cigarettes dangling from their lips.

>From World War II through Vietnam, cigarettes were as integral to life in
wartime as Crations and combat boots.

"I remember in Vietnam they gave us all two cigarettes with our rations,"
said Rep. John P. Murtha, DPa., a Marine veteran.

But the Pentagon, whose troops once lived by the motto "smoke'em if you got
'em," is now trying to kick tobacco. The Defense Department's longterm
goal is to reduce tobacco use by military personnel from its current level
of 32 percent 20 percent by 2000.

To achieve that goal, the Pentagon launched a controversial initiative in
November 1996 to raise prices of tobacco products in commissaries, the
military's taxpayersubsidized supermarkets.

Regional commissary prices vary widely, but the new policy resulted in a
significant increase in the price of a carton of cigarettes. In many areas,
the cost of a carton of namebrand cigarettes such as Marlboro went up by
about $4, from $11 to $15, according to defense officials.

That's still about $2 less than major supermarket chains such as Safeway
charge for a carton, because tobacco products sold at commissaries are
exempt from state and local taxes.

It's too early to tell whether the price rise will cause soldiers and
sailors to quit smoking. But it has already resulted in a dramatic decline
in sales of cigarettes by commissaries. In the past fiscal year, those
sales went down by 42 percent, according to the Pentagon. Sales fell by $87
million, from $454 million to $367 million.

For decades the Pentagon has been in the business of discounting tobacco.
And until the new policy went into effect, business was booming, both in
commissaries and military exchanges, which are the equivalent of a general
retail chain such as WalMart.

Tobacco products at some commissaries were sold at a 76 percent discount
compared with nearby commercial outlets. Military personnel, their
dependents and retirees who smoked would often buy cigarettes in bulk.

At Fort McCoy. Wis., sales of tobacco products accounted or 49 percent of
the commissary's retail business in fiscal 1995. At Fort Monroe, Va.,
tobacco sales accounted for 38 percent of the commissary's retail sales in
fiscal year 1995.

But with the administration taking a harder line against smoking and
defense officials growing anxious over the rising medical tab for
smokingrelated illnesses, the Pentagon's generous cigarette subsidies
became unsustainable.

"You can't subsidize a product whose use causes you to turn around and
subsidize health care for the use of that product. It's illogical," said
Stephen J. Rossette Jr., who directs the Pentagon office that devised the
new policy.

A report released in December 1996 by the Pentagon's Inspector General
underscored the diminishing economic returns from tobacco sales. In fiscal
1995 commissaries and exchanges generated sales of $747 million; at the
same time, health care and "lost productivity costs" attributed to tobacco
use totaled $930 million.

Still, the new policy spawned sharp protests on Capitol Hill. Members of a
House National Security subcommittee panel complained that the Pentagon had
failed to adequately consult Congress before cutting the cigarette
subsidies. Perhaps not coincidentally, the panel is dominated by members
who have received political contributions from tobacco interests and
represent tobaccorich states.

For all the furor stirred by the Pentagon's new policy, the fact remains
that commissaries and exchanges still undercut convenience stores in
pricing tobacco because military outlets.

That means every day, young soldiers are walking into exchanges and
commissaries and buying cigarettes at artificially low prices. In Southern
states, most of which have comparatively low tobacco taxes, the difference
might amount to only 25 cents a pack, but it is a discount nonetheless.

But after the flap over the change in commissary pricing, the Pentagon is
not likely to come up with any sweeping new antismoking measures, such as
eliminating the remaining price differential or banning sales of tobacco
products altogether.

WASHINGTONAmong the many