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But many other smokers are fighting back by going online to find bargain prices for cigarettes, a practice that is angering U.S. states, health campaigners, traditional retailers and the big tobacco companies themselves. Mueksch, 83, is still smoking all these years later, but has cut back from a pack to half a pack a day, complaining that U.S. taxes have doubled prices in the last five years. "It's no use; you can't fight City Hall," the California woman said. "I am a second-class citizen."

"The average person out there shopping for cigarettes online is your average, hard-working blue-collar American, looking to save money on aproduct that, for whatever reason, no matter what you say, is an addictive product. They're addicted." "Cigarettes are an ideal product for distribution through the Internet," said Ali Davoudi, founder of esmokes.com and president of the Online Tobacco Retailers Association.

The savings available via the Internet may also prove to be addictive. A carton of Marlboros from CigOutLet.net in Switzerland costs only $15, postage included, whereas the average cost of a 10-pack carton in the United States is $37. The tab is even higher in New York City, where smokers pay more than $3.50 a pack just in taxes, which can mean a full-retail price tag of $75 a carton.
California, the latest to enter the fray, this month sued five online and out-of-state cigarette vendors, accusing them of costing the state $54 million in lost tax revenue and of selling to minors.
"It is substantial and growing," state Attorney General Bill Lockyer said in an interview. "In California we do surveys of kids to find out where they are getting cigarettes, and the number of illegal purchases is growing."

 

Smokers are catching on to the savings. Forrester Research estimates Internet cigarettes sales will be $5 billion in 2005, more than double what is expected this year. That means states could lose $1.4 billion in tax revenue, the study found. Big tobacco companies, state and federal governments and health advocates are up in arms about this flourishing corner of the Internet and are launching an ever-growing legal assault.