In my first blog I mentioned that I’m a part of the military community. I have been for over 35 years. During that time, especially overseas, our retail outlets, food, and fuel supply have been controlled by AAFES (Army Air Force Exchange Service). About 10 years ago I was getting particularly annoyed by some practices that I felt were unfair due to the monopoly that AAFES had within the military community, and I published an editorial to The Stars & Stripes newspaper to complain. It was such a scathing exposé that I can’t even remember what the subject was. So, let’s go back. Way back – to a simpler time.
Until 1970 all of the exchanges were regional, and the operations were humble. The services that they provided were motivated by the need of the military community. There was no tax, and generally speaking, there was no profit margin – they earned enough to maintain operating costs – and most of the remainder went back to the troops in the form of Morale, Support, and Welfare programs (which provided services such as cinemas that carried brand new 6 month old (and older) movies in all of their 16mm glory, and “Bookmarks,” which were the book stores back then). AAFES gained control of retail operations in the Continental United States (CONUS) in 1970 (http://www.shopmyexchange.com/pa/history/milestones.asp#1970s), and then all hell broke for lunch. The spread that would ultimately enable it to become the 8th largest retailer in the United States began, catering to a very select customer base (or, as some might claim, a “captured audience”) – the military. It grew and grew, like The Blob (http://www.youtube.com/watch?v=XhyRpvgm03g), consuming everything in its path: exchanges, bookstores, laundry/dry cleaning establishments, food and alcohol outlets, theaters, military clothing, and gas stations. Probably other facilities as well, but, well, you get the point.
One of the interesting things about AAFES is that it was – and still is – controlled by the DoD (Department of Defense), and is handled very much like a Board of Directors handles any Corporation, although Board Members may well be military, and the CEO is probably a Brigadier General, and the Board reports to the Pentagon, Congress, and the Commander-in-Chief (aka President of the United Staes). Anybody who’s ever witnessed the extreme efficiency of the US Government in action can just imagine the top-notch efficiency that AAFES is afforded.
A bit of perspective is necessary. In 1974, at the military commissary in Germany, I paid $1.25 a carton (20 packs/200 cigarettes) for Marlboros. these were tax-exempt for use outside of the US. Germans were paying 4 times that on the local economy. Alcohol was about as cheap, also tax-exempt, and the black market was very real for those products and many others. A rationing system was provided to limit the amount that soldiers could buy, and the MP’s were usually vigilant of such illegal activities. If you were “in the field” and were eating “C” rations, part of the contents in those rations was a 4 pack of cigarettes, and since it always seemed that there were more Pall-Malls than anything else in those packages we would make deals with non-smoking soldiers to give up their Salems or Marlboros. “Smoke ’em if you got ’em” was a normal order given in formation when we were doing the typical Hurry-Up and Wait routine that the Army was well-known for. We smoked in the offices, in the (work) shops, and in the barracks. The First Sergeant, as like as not, could be seen “field-stripping” his cigarette (http://www.youtube.com/watch?v=NkXu35iJpyU) just before calling the Company to “Attention.” We also, generally, had a two beer limit for lunch, meaning that on post you were limited to only buying two beers at a time. I knew many a soldier, when asked, would swear that he only had “2 beersh <hic>.” Gasoline, as I recall, but didn’t buy it back then as I wasn’t driving, was around $.40 a gallon (or 40¢ a gallon if you can remember the “cent” symbol).
So, times have changed. We’ve become a much more “responsible” military community. Cigarettes now cost as much in the military, if not more, than they do at the US grocery stores. Same with alcohol. Gasoline has always been about the same as the US average, although now we pay well above that – about $.30 more on the gallon than the average. (as of 22 Nov 2010, the national average is $2.86 – $2.94 per gallon of regular unleaded. We’re paying $3.30, more than a dime higher than the most expensive in the US http://gasbuddy.com/gb_gastemperaturemap.aspx). Cigarettes are pushing $40 a carton, and the difference between what the Americans pay and what the Germans pay for them is no longer so great, maybe 20% – 25%. Alcohol has also come a long way to bridge that gap. Why is that? What have we done that’s caused this surge of the military economy to no longer provide these cheap, if hazardous, products for the military to use? I’ll tell you wahat happened. AAFES happened.
On one hand, AAFES proclaims that people shouldn’t smoke, therefore they set the price so high as to make it unattractive to buy cigarettes. Same with alcohol, same with gasoline. Wait – aren’t these still tax-free? Are you telling me that tax-free cigarettes, or tax-free alcohol, or tax-free gasoline costs as much – or more – than the same products in the states that are taxed “through the nose?” What’s the reasoning behind it, I wonder… Oh, I see, blame it on the DoD (http://en.wikipedia.org/wiki/Army_and_Air_Force_Exchange_Service). Obviously, the DoD is in the pricing business, and all because of the attempt to “deglamourize” alcohol and tobacco. Oh, I get it – so instead of just deciding to stop selling the biggest causes of cancer and car wrecks, jack the price up to where they’re only attractive to addicts, not to “normal” people like you and me. And, since addicts will pay any price to maintain their addiction, AAFES and the DoD can continue to jack up the price as far as they wish. I have another suggestion: stop selling tobacco and alcohol. Let the consumer buy them elsewhere. AAFES and the DoD made a decision similar to this years ago when they decided which adult magazines were ok, and which were filthy smut (http://www.robsworld.org/dishonor.html), so I’m sure they can make a similar decision today.
I apologize if I seem to be all over the map in this blog. Sometimes my thoughts come flying in at me so fast that the best I can do is swat what I can onto the screen (to extend a metaphor a little farther than necessary). The bottom line is that the US military, their families, and the civilians who support them are largely dependent on the monopoly that AAFES has become, and the practices that they follow – no longer concerned about the of the customer but of the bottom line, just like every other corporate megastore. What can the military customer do about it? Not a hell of a lot, except complain. Would Walmart be an improvement? Does AAFES need to go back to their roots? You tell me.