FTC Releases 2014 Cigarette and Smokeless Tobacco Sales and Marketing Expenditures Reports

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The number of cigarettes sold by the largest cigarette companies in the United States to wholesalers and retailers in the U.S. declined from 256.7 billion in 2013 to 253.8 billion in 2014, according to the most recent Federal Trade Commission Cigarette Report.

The amount spent on cigarette advertising and promotion decreased from $8.95 billion in 2013 to $8.49 billion in 2014, due mainly to a decrease in spending on price discounts (discounts paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers).

Spending on price discounts decreased from $7.64 billion in 2013 to $6.76 billion in 2014. The price discount categories (retail and wholesale) were the two largest expenditure categories in 2014, accounting for 79.7 percent of industry spending in 2014. For the first time, this year’s report breaks out the retail ($5.56 billion) from wholesale ($1.20 billion) price discounts.  Price discounts had been the single largest expenditure category every year since 2002.

According to the 2014 Smokeless Tobacco Report, smokeless tobacco sales declined slightly from 128.0 million pounds in 2013 to 127.8 million pounds in 2014. The revenue from those sales increased, however, from $3.26 billion in 2013 to $3.42 billion in 2014.

Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S., which had increased from $435.9 million in 2012 to $503.2 million in 2013, further increased to $600.8 million in 2014. As with cigarettes, price discounts made up the two largest spending categories, totaling $357.2 million – or 59.4 percent of all spending in 2014, up from the $287.7 million spent in 2013. As with the cigarette report, this year’s smokeless tobacco report breaks down price discounts provided to retailers ($257.3 million) and to wholesalers ($99.8 million).
The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987.

The Commission vote to issue the reports was 3-0. (FTC File No. P114508, the staff contact is Michael Ostheimer, 202-326-2699)

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