Tobacco.org

• Cigarette business getting tougher 

When Cigarettes Cheaper blew into town in 1999, the California-based company talked about setting up two dozen locations in San Antonio and 500 stores nationwide.

Four years later, the discount cigarette retailer has dwindled to five local stores, and its 480 U.S. locations have slipped to 328. . .

It didn't help that Roscoe's Silicon Valley-based bankers got considerably less enthusiastic about expansions in 2000.

What has been worse for Roscoe's business is that cash-strapped state governments have increasingly turned to cigarette taxes to help deal with their deficits. . .

Cigarettes Cheaper is losing sales to some convenience stores, Roscoe said, because many stores are selling counterfeit smokes to preferred customers. Philip Morris Co. is suing hundreds of California retailers, accusing them of selling counterfeit Marlboros, probably made in China.

Both convenience stores and smoke shops are finding that more people are rolling their own cigarettes to avoid state taxes.

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