FTC Releases Reports on Cigarette and Smokeless Tobacco Sales and Marketing Expenditures for 2016

Cigarette sales declined while smokeless tobacco sales increased from 2015 levels

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The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide declined from 244.2 billion in 2015 to 240.5 billion in 2016, according to the most recent Federal Trade Commission Cigarette Report.

The amount spent on cigarette advertising and promotion increased from $8.30 billion in 2015 to $8.71 billion in 2016, due mainly to an increase in spending on price discounts paid to cigarette retailers in order to reduce the price of cigarettes to consumers.

Price discounts paid to cigarette retailers ($5.81 billion) and wholesalers ($1.44 billion) were the two largest expenditure categories in 2016. Combined spending on price discounts increased from $6.95 billion in 2015 to $7.25 billion in 2016, accounting for 83.2 percent of industry spending.

According to the 2016 Smokeless Tobacco Report, smokeless tobacco sales increased from 129.4 million pounds in 2015 to 131.4 million pounds in 2016. The revenue from those sales also rose, from $3.68 billion in 2015 to $3.98 billion in 2016.

Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. increased from $684.9 million in 2015 to $759.3 million in 2016. As with cigarettes, price discounts made up the two largest spending categories, with $382.3 million paid to retailers and $85.5 million paid to wholesalers. Combined spending on price discounts totaled $467.8 million – or 61.6 percent of all spending in 2016, up from the $428.9 million spent in 2015.

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 2-0. (The staff contact is Michael Ostheimer, Bureau of Consumer Protection, 202-326-2699)

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Mitchell J. Katz
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