Cigarette Test Results--1993

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Total cigarette industry advertising and promotional expenditures for 1993 amounted to $6.03 billion, an increase of 15.4 percent over 1992, according to the Federal Trade Commission's annual report to Congress on cigarette sales and advertising. At the same time that advertising expenditures were increasing, total consumption of domestic cigarettes declined 8.9 percent from 1992 to 1993.

The 1993 annual report, released today, contains sales and marketing statistics for calendar year 1993 and historical data dating back to 1963, the year the FTC began collecting informa- tion on the cigarette industry.

Cigarette advertising in newspapers, as a percentage of total advertising and promotional spending for the year, reached an all-time low in 1993, to only 0.6 percent of total advertising and promotional expenditures. Spending on magazine advertise- ments decreased from $237 million in 1992 to $235 million in 1993, according to the FTC report. Outdoor advertising expenditures decreased from $295 million to $231 million, while point-of-sale advertising expenditures increased from $366 million to $401 million in 1993.

Cigarette companies spent $1.6 billion in 1993 (up from $1.5 billion in 1992) on promotional allowances, including slotting allowances -- payment to retailers for shelf space -- and trade allowances -- usually in the form of free goods or price reductions. Promotional allowances also include contests and trade shows for wholesalers and distributors designed to encourage wider distribution of a company's brands.

Discount coupons, multiple-pack promotions ("buy one, get one free"), and retail-value-added offers (non-cigarette items, such as keychains or lighters given away at the point of sale with the purchase of cigarettes) accounted for nearly 42.4 percent of all 1993 advertising and promotion expenditures, for a total of $2.6 billion. This was an increase of $384 million from the amount ($2.2 billion) reported in 1992

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FTC Cigarette Report for 1993--05/2/95)

Domestic cigarette sales in 1993 decreased 8.9 percent from the 1992 level. According to the FTC report, sales in 1993 totalled 461.4 billion cigarettes -- 45 billion fewer than the preceding year. Per capita consumption of cigarettes declined from 2,675 in 1992 to 2,414 in 1993, a drop of 9.8 percent, or 261 cigarettes per person. This decline continues an annual trend that began in 1973 when per capita consumption totalled 4,112 cigarettes per year.

Copies of the "Federal Trade Commission Report to Congress for 1993 Pursuant to the Federal Cigarette Labeling and Advertising Act" are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

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