Federal Trade Commission Reports Released:
Tobacco Industry Spends More at the POS Than Anywhere Else
In 2014, the tobacco industry spent over $8.2 billion marketing and promoting cigarettes and smokeless tobacco at the point of sale.
These point of sale expenditures account for nearly 91% of their total marketing expenditures on cigarettes and smokeless tobacco combined. These figures, recently released in the Federal Trade Commission Reports on Cigarettes and Smokeless Tobacco Sales and Marketing Expenditures in 2014, document a continued concentration of tobacco industry expenditures at the POS in recent years.Though sales and total spending on cigarette marketing decreased slightly from 2013-2014, the proportional amount of spending on POS promotional activity remains high at 91.7%. Total marketing expenditures for smokeless tobacco at the POS grew by an additional 21% from 2013-2014, following a similar increase from 2012-2013.
Spending on price discounts remains the largest category for both smokeless tobacco and cigarettes. Though total expenditures on price discounts for cigarettes decreased, it still accounted for 79.7% of marketing expenditures, and expenditures on price discounts increased from 56.2% to 59.5% for smokeless tobacco. From 2013 to 2014, spending on coupons for cigarettes more than doubled, and increased by 27% for smokeless tobacco. These promotions reduce the price of products, counteracting the impact of tobacco control policies like excise taxes and targeting price sensitive smokers. In addition, tobacco spending on POS advertisements for cigarettes more than quadrupled, increasing from $55.7 million in 2013 to $238.2 million in 2014. See more details.
Examples of price discounts and promotions for cigarettes and smokeless tobacco seen at the POS
Tobacco marketing at the POS matters. Research shows that tobacco marketing can cause youth to start smoking, keep current smokers hooked, and make it harder to quit.
Note: While these reports only include data for cigarettes and smokeless tobacco, the FTC is seeking to issue compulsory process orders to marketers of electronic cigarettes to provide information about their sales and marketing expenditures. It has issued a second Federal Register Notice requesting public comment and is seeking clearance from the Office of Management and Budget to issue the orders.
