FTC reports pull back smoke on 2014 tobacco product advertising

While the amount spent on cigarette advertising and promotion decreased from $8.95 billion in 2013 to $8.49 billion in 2014, spending on advertising and promotion of smokeless tobacco products in the U.S. increased from $503.2 million in 2013 to $600.8 million in 2014, according to reports released by the Federal Trade Commission (FTC) on cigarette and smokeless tobacco marketing expenditures for 2014. The FTC reports also indicated a drop in the number of cigarettes sold by large cigarette companies to wholesalers and retailers—256.7 billion in 2013 to 253.8 billion in 2014.

Cigarettes

The data on cigarette manufacturers’ expenditures comes from special reports submitted to the FTC by the largest cigarette manufacturers through a compulsory process. Those manufacturers include: Altria Group, Inc.; Commonwealth Brands, Inc.; Lorillard, Inc.; Reynolds American, Inc.; and Vector Group Ltd.The largest portion of the $8.49 billion spent on advertising and promotion of cigarettes was “price discounts” paid by manufacturers to retailers in order to reduce the “consumer price” of cigarettes. Those price discounts represented $5.56 billion or 65 percent of advertising and promotional spending for cigarettes in 2014. The FTC requires the manufacturers to report the expenditures on advertisements directed towards youth which are intended to reduce youth smoking. In 2014 the manufacturers spent $1.7 million on such advertisements.

Smokeless tobacco

The smokeless tobacco report is, like the cigarette report, comprised of data submitted to the FTC by the largest smokeless tobacco product manufacturers through a compulsory process. Those manufacturers include: Altria Group, Inc.; North Atlantic Trading Company, Inc.; Reynolds American, Inc.; Swedish Match North America, Inc.; and Swisher International Group, Inc. The total amount of smokeless tobacco sold by the manufacturers to wholesalers and retailers dropped slightly from 128.04 million pounds in 2013 to 127.81 million pounds in 2014. Over the same period, sales revenues for those manufacturers increased from $3.26 billion to $3.42 billion. According to the FTC report, the largest smokeless tobacco companies reported spending $852,000 in 2014 on advertisements intended to reduce youth use of smokeless tobacco products.