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Shareholder Resolution Asks Walgreens To Review Tobacco Sales

Words by Gina-Marie Cheeseman
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Is it ethical and moral for a retail pharmacy company to sell tobacco products? Not if you ask Walgreens shareholders and members of the Interfaith Center on Corporate Responsibility (ICCR). They recently filed a shareholder resolution requesting that Walgreens' board of directors review the risks of tobacco sales in the company’s pharmacies. The resolution is expected to appear on the ballot at the company’s annual meeting on Jan. 26, 2017.

The resolution asks the board of directors to issue a report within six months of the 2017 annual meeting “assessing the financial risk, including long-term legal and reputational risk” of continuing to sell tobacco products in Walgreens’ stores. The mission statement of Walgreens Boots Alliance, Walgreens' party company, reads: “We help people around the world lead healthier and happier lives.” But as the resolution points out, nearly every public health organization has identified cigarette smoking as the leading contributor to the top four causes of death in the nation: heart disease, cancer, stroke and emphysema.

TriplePundit spoke with Tom McCaney of the Sisters of St. Francis of Philadelphia, the lead investor on the resolution, to understand more about the resolution. He broke it down simply: “We’re asking the company to review the financial, reputational and legal risks of continuing to sell this deadly product, but the motivation behind it is we want them to stop selling it.”

So, why not just file a resolution asking Walgreens to stop selling cigarettes? “Because any shareholder resolution is subject to SEC rules, we can't necessarily ask for what we really want,” McCaney explained. “We're asking [the Walgreens board] to review, and they know our motivation. We've had dialogue with the company, and we've made it clear what our intentions are."

The U.S. is the only country in the industrial world where cigarettes can be sold in pharmacies. In 2014, CVS became the first national retail pharmacy chain to stop selling tobacco products in all of its stores. Several other national chains followed suit, including Wegmans and Target. In 2014, 28 attorneys general sent a letter to Walgreens urging the company to “follow the example set by CVS ... and to cease selling tobacco products in your retail stores throughout the United States.”

CVS conducted a study in 2015 over an 8-month period on the impacts of its decision to stop selling tobacco products. What the study found is a 1 percent reduction in cigarette pack sales across all retailers in states where CVS had a 15 percent or greater share of the retail pharmacy market, compared to states with no CVS stores. The study also found that the average smoker in those states purchased five fewer cigarette packs, and about 95 million fewer packs were sold. Nicotine patch purchases also rose by 4 percent during the 8-month period.

“Our message to the company is that we want them to align their operation with their mission,” McCaney told TriplePundit. Large pharmaceutical companies “have really positioned themselves as partners in healthcare,” he pointed out. While they have “always been a part of it,” they now employ nurses at some locations, have health clinics at some of their stores and do various types of healthcare testing, he continued. They are healthcare companies, and that’s what bothers the shareholders who filed the resolution.

As McCaney declared: “To us, it's egregious not only that they would sell the disease, but they're selling the cure right next to it as well with cessation products.” Or as the letter sent by the attorneys general stated: “There is a contradiction in having these dangerous and devastating tobacco products on the shelves of a retail chain that services health care needs.”

Image credit: Flickr/Mike Mozart

Gina-Marie Cheeseman

Gina-Marie is a freelance writer and journalist armed with a degree in journalism, and a passion for social justice, including the environment and sustainability. She writes for various websites, and has made the 75+ Environmentalists to Follow list by Mashable.com.

Read more stories by Gina-Marie Cheeseman