By Ricardo Carvajal –
The Federal Trade Commission ("FTC") issued the latest in a series of reports on sales, advertising, and promotion of cigarettes and smokeless tobacco. The reports are based on data submitted to FTC by industry. The cigarette report states that the “total number of cigarettes reported sold or given away decreased by 7.7 billion cigarettes (2.2 percent) from 2006 to 2007, and then by another 20.2 billion units (4.5 percent) from 2007 to 2008,” such that the total number of cigarettes sold or given away in 2008 was 322.6 billion. For purposes of reference, that figure was reported as 402.2 billion in 2001. There was also a decline in advertising and promotional expenditures, from $12.49 billion in 2006 to $9.94 billion in 2008 – the lowest figure reported since 2000.
The smokeless tobacco report states that “the total amount of smokeless tobacco sold by manufacturers to wholesalers and retailers increased from 115.82 million pounds in 2006 to 118.23 million pounds in 2007. Sales rose again in 2008 to 119.92 million pounds.” That figure was reported as 112.2 million pounds in 2001. The report also presents data on the number of units of smokeless tobacco given away, by package size. Advertising and promotional expenditures increased from $354.1 million in 2006 to $547.9 million in 2008 – more than twice what was reported in 2000.
FDA regulations issued under the authority of the Family Smoking Prevention and Tobacco Control Act curtail the distribution of free samples of cigarettes and smokeless tobacco, and FDA recently published a final rule that will require more prominent and graphic health warnings on cigarette labeling and advertising – assuming it survives a court challenge. It will be interesting to see whether advertising expenditures are influenced by FDA’s implementation of the new law.