California Code, Insurance Code - INS § 11580.3

(a) Cigarettes, because of their standardized character, their great popularity, their widespread and varied types of markets and methods of distribution and the sensitivity of their distribution to price fluctuations, possess a distinct marketing character and, the economic facts and circumstances peculiar to their distribution, require special and individualized treatment of the problems created by the sale of cigarettes below cost.

(b) The sale of cigarettes below cost for the purpose of destroying or substantially lessening competition is inimical to the orderly and efficient collection by the Commonwealth of excise taxes on cigarettes and taxes from the licensing of persons engaged in the sale of cigarettes at wholesale and retail.

(c) The sale of cigarettes below cost for the purpose of destroying or substantially lessening competition is an unfair business practice, which tends to be disorganizing in the sale and distribution of cigarettes, and ultimately fosters monopoly and high prices by tending to force independent wholesalers and retailers out of business.