NCPA - National Center for Policy Analysis

Prison Profits Go Up in Smoke

August 27, 2003

Across the nation, restrictions on smoking in prisons are writing a new chapter in the long, lucrative history of the cigarette industry and one of its most devoted markets. About two million people are now incarcerated in U.S. prisons and jails, and an estimated 70 percent to 80 percent of them are smokers, according to studies by health officials of inmates in Illinois, Texas and New Mexico.

  • That compares with 23 percent of the adult U.S. population at large.
  • A store in a large prison can gross $500,000 a year in tobacco sales, double the average of a typical Wal-Mart.
  • Federal prisons have 163,528 inmates and a 40 percent tobacco markup, compared to California's 162,317 inmates and 61 percent markup.
  • Florida has 75,210 inmates and a 60 percent tobacco markup; Georgia has 47,445 inmates and a 29 percent markup; and lastly, Illinois has 42,693 inmates and a 10 percent markup.

In-house stores at Vermont's eight state prisons grossed about $3.4 million in tobacco sales in the year ended June 25, the state says. About a third of that, or $1.1 million, was the prison system's markup, or profit. That's money the state will lose when a prison tobacco ban takes effect in Vermont in January.

"Once you give up the cigarettes, a lot of money goes out the door," says Lawrence McLiverty, director of security for Vermont's Department of Corrections. He says cigarette profits have been used in his state to pay for recreation equipment, crafts instruction and assistance to prisoners' relatives who travel long distances for visits. The programs will probably be cut back, he says. Vermont's total prison budget is $95 million.

Source: Vanessa O'Connell, "Bans on Smoking in Prison Shrink a Coveted Market: Big Tobacco Courted Inmates for Decades, Yielding Reliable Funds for Many States," Wall Street Journal, August 27, 2003.

For text,,SB10619352366522500,00.html


Browse more articles on Government Issues