Technical
Assistance Legal Center
June 8, 2001 Office of the Secretary Re: FTC Cigarette and Smokeless Tobacco Reports; Request for Public Comment To Whom It May Concern: I am writing in response to the FTC's request for public comment on the continued issuance of Cigarette and Smokeless Tobacco Reports. On behalf of the Technical Assistance Legal Center (TALC), a non-profit organization that provides free technical legal assistance on tobacco control policy questions, I strongly recommend that the FTC continue to provide these reports. TALC is funded by California tobacco tax money to assist local governments with legal questions that arise in the regulation of tobacco advertising or sales. Therefore, it is imperative that TALC and similar tobacco control organizations have access to complete and current data on tobacco marketing practices. For more information about TALC, please see our website at www.phi.org/talc. Below are responses to each of your inquiries. 1. Who uses the cigarette and smokeless tobacco reports? For what purposes do they use them? The Cigarette and Smokeless Tobacco Reports are utilized by local tobacco control organizations like TALC in tracking the advertising and promotion expenditures of the tobacco industry and sales volume, in order to minimize the detrimental effects of tobacco on the public. The reports provide valuable information on how tobacco marketing expenses change over time and, in particular, how spending in various categories increases or decreases. By analyzing these trends, tobacco control advocates can determine how tobacco companies are promoting their products and develop strategies to counter such marketing. For example, if spending on sports sponsorship increases as spending on transit advertising decreases, advocates can adjust their strategies to emphasize the passage of laws or policies to prevent tobacco sponsorship of events and de-emphasize laws or policies to prohibit transit advertising. 2. What are the costs to the industries to provide the Commission with the data included in the cigarette and smokeless tobacco reports? Tobacco companies are in the best position to provide the public with this vital information. It would impracticable and far more expensive for a government agency such as the FTC to attempt to track marketing expenses and sales data for the various companies. The tobacco companies' costs in reporting these figures to the FTC are minimal considering that most of this information is a matter of expenditure calculation that companies routinely make at the conclusion of their fiscal year. 3. Should the Commission continue to collect and publish data regarding cigarette and smokeless tobacco sales, advertising, and promotion? Why or why not? Yes, the cigarette and smokeless tobacco reports are invaluable tools that should be produced even in the absence of mandatory reporting requirements. Without these reports, it is impossible to determine the full extent of tobacco industry activities. This information is crucial in educating the public about the amount and breadth of tobacco sales and marketing. Additionally, the data in these reports helps to shape effective local policy by focusing local regulatory efforts on the types of marketing practices most used by tobacco companies. 4. What data or other information contained in the reports are useful and should be continued in future reports? Why? What data or other information in previous reports are of little or no use, and could be omitted in future reports? Why? All of the information contained in the reports provides an important function, however TALC particularly uses the marketing strategy and spending data. For example, the 1999 reports provided the data to show that despite a steady decrease in tobacco consumption, post-Master Settlement Agreement advertisement expenditures are at an all time high. Having this information readily available allows tobacco control agencies to ensure they are operating in an efficient and proactive manner. TALC finds particularly useful the categorical breakdowns for different marketing strategies, such as promotional allowances and specialty item distribution. Most, if not all, of this data would be impossible for tobacco control agencies to collect. For example, without these reports, tobacco control advocates would not be able to determine the amount tobacco companies are paying retailers to advertise their products or track the amount that companies are spending on direct mail advertising. The FTC reports provide a historical record of how these expenditures change over time. 5. Is there information about cigarette and smokeless tobacco sales, advertising, and promotion that would be of use? If so, what additional information would be of use, and why would it be useful? Additional information that may be useful is the further breakdown of certain categories of data in both the cigarette and smokeless tobacco reports. Several potential areas of improvement include:
All of this information would be useful in monitoring tobacco industry activities and ensuring compliance with existing federal laws and municipal ordinances. 6. If the Commission decides to continue issuing reports, how frequently should they be issued (e.g. annually, biannually)? Why? In order for organizations like TALC to remain responsive to emerging tobacco-related issues, it is imperative that they have access to the most current data possible on tobacco industry activities. Therefore both the Cigarette and Smokeless Tobacco reports should be released at least on an annual basis, perhaps even with quarterly estimates available. 7. What other information should the Commission consider in deciding whether to continue reporting on the sales and advertising and promotion of cigarettes and smokeless tobacco products? If the Commission decides to issue future reports, what formats would be useful? The Commission should consider the fact that the tobacco industry has been notoriously guarded about disclosing information that is vital to the public welfare, therefore any initial costs to the companies are justified by the extensive benefits to the public. The best format available for future reports is release on the internet, which enables widespread distribution at minimal cost to the FTC. Thank you for your consideration of these issues. Please feel free to contact me at (510) 444-8252, or lzellers@phi.org with any additional questions. Sincerely, Leslie Zellers, J.D. |