If I had been asked where the bulk of advertising money for the tobacco industry was spent, a week ago I would have said it was on print advertising. But I was surprised when the Federal Trade Commission issued two new reports identifying price discounts as the largest category of spending for advertising and promotion. According to these reports price discounting made up 78.2% of the total advertising and promotion budget in 2009 and 80% of the advertising and promotion budget in 2010 for cigarettes. For smokeless tobacco, price discounts made up 32.6% in 2009 and 21.4% in 2010. It is no surprise that the total number of cigarettes sold or given away has gone down. From 2008 to 2009 the total number of cigarettes sold or given away decreased by 10% and from 2009-2010 by 3%.
The trends we see in smokeless tobacco are also predictable (and in line with other reports we have seen recently that identify and uptick in the use of smokeless tobacco products). In 2009 the amount of smokeless tobacco sold or given away decreased, but then increased in 2010. What is surprising is how much money is being spent to lower the price of their product.
These reports, The Federal Trade Commission Cigarette Report for 2009 and 2010, and Federal Trade Commission Smokeless Tobacco Report for 2009 and 2010provide information on the sales of cigarettes and smokeless tobacco products as part of a series on the sales, advertising and promotion of cigarettes and smokeless tobacco produced by the FTC since 1967.
This brought up many questions for me. What is driving the increase in the sale of smokeless tobacco? How is the FDA ban on sampling affecting these numbers? Doesn’t this just prove that the tobacco companies are finding ways to get around the FDA law?
Although we can’t answer all these questions in one blog post, we can use these numbers to help address some of these questions. The tobacco industry is clearly focusing their advertising spending on price discounts to make sure they get their product in people’s hands. The FDA ban on sampling went into effect in June 2010, so the data contained in this report represents the time period when this ban was being implemented. What the data shows is that from 2009 to 2010 the spending on discounts for cigarettes increased, while at the same time, free samples of their products were prohibited. So, although the FDA law clearly bans the act of providing free cigarettes and smokeless tobacco, it still contains loopholes (such as allowing for the purchase of discounted products) that these tobacco companies are obviously taking advantage of.
This makes the work we do at the state and local level to address sampling and combat the combat tobacco industry influence as important as ever.