FTC Reports Tobacco Marketing Increased to $9.6 Billion in 2012 – Efforts to Fight Tobacco Use Must Also Intensify
Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids
March 30, 2015
WASHINGTON, DC – In troubling news for our nation’s kids and health, the Federal Trade Commission’s latest reports on tobacco marketing show that cigarette marketing expenditures increased by nearly 10 percent, to $9.17 billion, in 2012. Adding $435.7 million in smokeless tobacco marketing, the tobacco companies spent a total of $9.6 billion to market cigarettes and smokeless tobacco – that’s $26 million each day and more than $1 million every hour. The cigarette marketing increase was driven by a sharp rise in spending on price discounts, which now account for 85 percent of all cigarette marketing.
The FTC’s reports are a timely reminder that the tobacco companies are as relentless as ever in marketing their deadly and addictive products, often in ways that entice kids.
The huge sums spent on price discounts are especially troubling, making tobacco products more affordable and appealing to price-sensitive kids. The 2012 Surgeon General’s report, Preventing Tobacco Use Among Youth and Young Adults, concluded that “the industry’s extensive use of price-reducing promotions has led to higher rates of tobacco use among young people than would have occurred in the absence of these promotions.” In her 2006 ruling that cigarette manufacturers have violated civil racketeering laws and deceived the American public, U.S. District Court Judge Gladys Kessler concluded, “Defendants could significantly reduce adolescent smoking by… stopping all price related marketing.” This report demonstrates they have done just the opposite.
To counter the industry’s price strategies, the federal government and the states must increase the price of tobacco products by increasing tobacco taxes. The states must significantly increase tobacco taxes, as governors have proposed in Kansas, Ohio, Alabama, Louisiana and other states. Congress should approve President Obama’s proposal to increase the federal cigarette tax by 94 cents per pack and similarly increase taxes on other tobacco products.
States and localities should also prohibit tobacco price discounts, as Providence, Rhode Island, and New York City have done. These discount bans have been upheld by federal courts. The evidence couldn’t be clearer: Increasing the price of tobacco products is one of the most effective ways to reduce smoking and other tobacco use, especially among kids.
The federal government and the states must also fund robust mass media campaigns that counter the tobacco industry’s marketing barrage. It is welcome news that the CDC last week launched the fourth year of its Tips from Former Smokers advertising campaign that has proven so effective at helping smokers quit. The U.S. Surgeon General has called for running such campaigns “at a high frequency level and exposure for 12 months a year for a decade or more.” The CDC’s media campaign, along with the FDA’s media campaign and Legacy’s truth campaign aimed at youth and young adults, are important steps toward meeting this recommendation, but still amount to just a fraction of tobacco marketing expenditures.
The states must do their part by increasing funding for tobacco prevention and cessation programs, including media campaigns. The states this year will collect $25.6 billion in revenue from the 1998 tobacco settlement and tobacco taxes, but will spend less than two percent of it – $490.4 million – on tobacco prevention programs. That means tobacco companies spend nearly $20 to market tobacco products for every $1 states spend to reduce tobacco use.
The FTC issued its reports on 2012 cigarette and smokeless tobacco marketing on Friday. Specific findings include:
Cigarette marketing expenditures rose from $8.37 billion in 2011 to $9.17 billion in 2012. Spending on price discounts increased from $7 billion in 2011 to $7.8 billion in 2012.
Spending on smokeless tobacco marketing fell slightly, from $451.7 million in 2011 to $435.7 million in 2012. However, smokeless tobacco marketing has nearly tripled from the $145.5 million spent in 1998. As with cigarettes, price discounts made up the largest category, accounting for 48.7 percent of all smokeless tobacco marketing.
While the U.S. has made enormous progress in reducing smoking, tobacco use remains the nation’s number one cause of preventable death. It kills more than 480,000 people and costs the nation about $170 billion in health care bills each year. These deaths and costs are entirely preventable if elected officials fight tobacco use as aggressively as the tobacco companies market their deadly products.