Shareholders ask Walgreens to rethink tobacco

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In tandem with a stockholder advocacy group, Walgreens shareholders have called on the drug chain to re-examine its stance on tobacco sales.

The Interfaith Center on Corporate Responsibility said members of the organization and Walgreens shareholders have filed a proposal asking the retailer’s board to assess the risks of tobacco sales at Walgreens drug stores and the potential impact on shareholder returns. They say their concerns involve not just the health risks to customers who buy tobacco from Walgreens stores but also the retailer’s brand image, since the company positions itself as a leading health and wellness destination.

Cigarette drug store display_Walgreens“We question the board’s oversight on this matter and are requesting a report that lays out the potential risks to the company,” lead filer Tom McCaney of the Sisters of St. Francis of Philadelphia said in a statement.

The resolution also points to letters that the attorneys general of 28 states and territories sent in March 2014 to the CEOs of Walgreens, Rite Aid, Walmart, Kroger and Safeway to remove tobacco products from their stores. “There is a contradiction in having these dangerous and devastating tobacco products on the shelves of a retail chain that services health care needs,” the letters to the retailer CEOs stated.

That view may present a legal risk to Walgreens, the shareholder resolution claims. “U.S. officials have made clear their intention to pursue legal means to end tobacco sales in pharmacies. In light of this, we believe the legal, reputational and public health risks of tobacco sales in our stores presents significant risks to our investments and that these risks should be assessed and publicly reported,” the resolution stated.

The Interfaith Center on Corporate Responsibility said the resolution is expected to appear on the company ballot at Walgreens’ annual shareholders meeting on Jan. 26, 2017.

Tobacco sales by pharmacy retailers have come into question since CVS Health in February 2014 announced plans to pull tobacco products from all of its stores. The company became the first national pharmacy chain to do so when it stopped tobacco sales in early September 2014.

And in September 2015 CVS reported that its decision to drop tobacco sales has had an impact, reducing cigarette purchases over the past year at drug, food, big-box, dollar, convenience and gas station retailers where CVS Pharmacy had a 15% or greater share of the retail pharmacy market.

According to the website, retailers not selling tobacco products include CVS, Target, Wegmans, Whole Foods Market, The Fresh Market, Fresh & Easy, Trader Joe’s, Mariano’s, Aldi, Raley’s, and Medicine Shoppe/Medicap, among others.



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