FTC releases cigarette and smokeless tobacco marketing reports for 2009 and 2010

The Federal Trade Commission today released its reports on cigarette and smokeless tobacco marketing for 2009 and 2010. The reports also include information on sales volumes. The latter shows that the number of cigarettes sold and given away in the U.S. fell by 10 percent in 2009, the second largest increase since the FTC began reporting sales data in 1963. This decline shows the impact of the 62-cent increase in the federal cigarette tax that took effect April 1, 2009, and is powerful confirmation that cigarette tax increases are one of the most effective ways to reduce smoking.

The report also showed declines in cigarette and smokeless marketing, although total marketing remains high at $8.5 billion a year.

The Campaign for Tobacco-Free Kids’ statement and the FTC release are below (along with links to the full FTC reports).

FOR IMMEDIATE RELEASE: September 21, 2012

CONTACT: Peter Hamm, 202-296-5469

FTC Report Show Big Decline in Cigarette Sales after 2009 Federal Cigarette Tax Increase, While Tobacco Companies Still Spend Huge Sums on Marketing

Statement of Susan M. Liss

Executive Director, Campaign for Tobacco-Free Kids

WASHINGTON, DC – A report issued today by the Federal Trade Commission shows that the number of cigarettes sold and given away in the United States fell by 10 percent in 2009, one of the biggest declines on record. This decline shows the impact of the 62-cent increase in the federal cigarette tax that took effect April 1, 2009, and is powerful confirmation that cigarette tax increases are one of the most effective ways to reduce smoking.

The 2009 decline in cigarette sales is the second largest on record since the FTC began reporting sales data in 1963. The only larger decline, 10.3 percent, was in 1999, when tobacco companies significantly increased cigarette prices to pay for the 1998 legal settlement with the states. The evidence couldn’t be clearer: When cigarette prices go up, cigarette sales go down.

Other recent reports have also shown that the 2009 federal cigarette tax increase significantly reduced smoking. According to a University of Illinois at Chicago study published in April, youth smoking fell 10 to 13 percent immediately after the tax increase took effect. The researchers estimated that the tax reduced the number of youth smokers by at least 220,000 in the first two months alone. Even while reducing smoking, the tobacco tax increase raised more than $10 billion in just the first 12 months to help fund expansion of the State Children’s Health Insurance Program. The federal tobacco tax increase has been the health win and the revenue win expected and should spur elected officials across the country to increase tobacco taxes.

The FTC today also reported the following data on tobacco marketing:

· Cigarette marketing expenditures in the U.S. declined from $9.94 billion in 2008 to $8.53 billion in 2008 and $8.05 billion in 2010.

· After increasing by 277 percent between 1998 and 2008, smokeless tobacco marketing decreased from $547.9 million in 2008 to $492.1 million in 2009 and $444.2 million in 2010.

While it is a positive step that tobacco marketing has declined, the tobacco companies continue to spend huge sums to market their deadly and addictive products. Counting both cigarette and smokeless tobacco marketing, the tobacco companies spent $8.5 billion on marketing in 2010 – more than $23 million each day and nearly $1 million every hour. Cigarette makers continue to spend the bulk of their marketing budgets – more than 80 percent – on price discounts that make cigarettes more affordable and appealing to price-sensitive kids.

Tobacco companies spend far more to market tobacco products than states spend to prevent and reduce tobacco use. In fiscal year 2012, the states spent $456.7 million on programs to prevent kids from smoking and help smokers quit. That means tobacco companies spend more than $18 to market tobacco products for every $1 states spend to reduce tobacco use.

The continuing high level of tobacco marketing show why we need aggressive action by all levels of government to stop the tobacco epidemic. The states should increase tobacco taxes and restore funding for tobacco prevention programs that have been slashed by 36 percent in recent years. At the federal level, the Food and Drug Administration must effectively exercise its authority over tobacco products and marketing, the health care reform law’s expansion of coverage for smoking cessation services must be implemented, and the Centers for Disease Control and Prevention should continue the highly successful anti-tobacco advertising campaign it launched this year.

Tobacco use is the nation’s number one cause of preventable death, killing more than 400,000 people and costing $96 billion in health care bills each year. These deaths and costs are entirely preventable if elected officials at all levels fight tobacco use as aggressively as the tobacco companies market their deadly products.

Related materials:

FTC press release: http://www.ftc.gov/opa/2012/09/tobacco.shtm

FTC cigarette report for 2009 and 2010: http://ftc.gov/os/2012/09/120921cigarettereport.pdf

FTC smokeless tobacco report for 2009 and 2010: http://ftc.gov/os/2012/09/120921tobaccoreport.pdf

FTC Releases Reports on Cigarette and Smokeless Tobacco Advertising and Promotion

Amount Spent Declines for Cigarettes, Smokeless Tobacco in 2009 and 2010

The amount spent on cigarette advertising and promotion by the largest cigarette companies in the United States declined from $9.94 billion in 2008 to $8.53 billion in 2009, and again to $8.05 billion in 2010, according to a report released today by the Federal Trade Commission.
The Commission has issued the Cigarette Report periodically since 1967, and another one, the Smokeless Tobacco Report, periodically since 1987.

The largest spending category in the Cigarette Report in both 2009 and 2010 was spending on price discounts paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers. This category accounted for $6.67 billion, or 78.2 percent of total spending on advertising and promotion in 2009, and $6.49 billion, or 80.7 percent of that total, in 2010.

The number of cigarettes sold or given away to wholesalers and retailers in the United States declined from 322.6 billion in 2008 to 290.3 billion in 2009, and to 282.0 billion in 2010.
According to the Smokeless Tobacco Report for the major manufacturers of smokeless tobacco products in the United States:

· Their spending on advertising and promotion fell from $547.87 million in 2008 to $492.10 million in 2009, and again to $444.20 million in 2010.

· The dollar value of sales by these manufacturers fell from $2.76 billion in 2008 to $2.61 billion in 2009, then rose to $2.78 billion in 2010.

· The weight of smokeless tobacco sold fell from 119.90 million pounds in 2008 to 117.70 million pounds in 2009, and rose to 120.50 million pounds in 2010.

To read the full reports, click on Federal Trade Commission Cigarette Report for 2009 and 2010, and Federal Trade Commission Smokeless Tobacco Report for 2009 and 2010.

The Commission vote authorizing the staff to issue the reports was 5-0.