New reports from the Federal Trade Commission show that in 2019 the tobacco industry spent nearly $6.6 billion marketing and promoting cigarettes and smokeless tobacco at the point of sale.
Figures from the Federal Trade Commission (FTC) Reports on Cigarettes and Smokeless Tobacco Sales and Marketing Expenditures in 2019, released in March 2021, document a continued concentration of tobacco industry expenditures in the retail environment. These numbers are for cigarettes and smokeless tobacco alone – they do not include any marketing expenditures for cigarillos, little cigars, e-cigarettes, or any other tobacco products.
The spending reports show that tobacco companies spend the majority of their marketing dollars on two categories: price discounts and promotional allowances to keep products cheap and visible at the point of sale.
When factoring in price discounts and promotional allowances paid to wholesalers, which ultimately reduce the price of products to consumers, the amount spent rises to nearly $8 billion, over 97% of the tobacco industry’s total marketing budget.
The retail environment has an impact on the health of the community as a whole. Research shows that tobacco marketing can cause youth to start smoking, keep current smokers hooked, and make it harder for current and former users to quit and stay quit. Point-of-sale marketing often disproportionately targets minority and low-income neighborhoods, and research shows this targeted marketing works, with higher rates of smoking among individuals of lower socioeconomic status and education level.
These FTC reports emphasize the critical need to monitor and address tobacco industry activity in the retail environment. Price discounts counteract the impact of effective tobacco control policies and target price sensitive smokers. Policies that raise the price of tobacco products, such as increasing excise taxes, banning coupons, or setting minimum price floors, are just a couple examples of effective strategies for addressing significant spending on tobacco marketing and promotion at the point-of-sale.