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FTC Reports First Increase in Tobacco Marketing Since 2003, Underscoring Need for Continued Vigilance in Fighting Tobacco Use

Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids
May 21, 2013

WASHINGTON, DC – It is troubling news for our nation’s health that marketing expenditures for cigarettes and smokeless tobacco increased by nearly four percent to $8.82 billion in 2011, representing the first increase in overall tobacco marketing since 2003. This increase, reported today by the Federal Trade Commission (FTC), is a timely reminder that the tobacco companies continue to aggressively market their deadly and addictive products, often in ways that appeal to kids. Elected officials must be equally aggressive in implementing proven strategies to reduce tobacco use, including higher tobacco taxes, strong smoke-free laws, well-funded tobacco prevention and cessation programs, and effective regulation of tobacco products and marketing.

The FTC reported that total marketing expenditures for cigarettes and smokeless tobacco increased from $8.49 billion in 2010 to $8.82 billion in 2011. This means tobacco companies spend $24 million a day – $1 million each hour – to market their harmful products.

The FTC’s specific findings include:

  • Cigarette marketing expenditures rose from $8.05 billion in 2010 to $8.37 billion in 2011, due mainly to an increase in spending on price discounts. Spending on price discounts increased from $6.49 billion in 2010 to $7 billion in 2011, representing more than 83 percent of all cigarette marketing.

  • Smokeless tobacco marketing increased from $444.2 million in 2010 to $451.7 million in 2011.

The huge amount spent on price discounts is especially troubling as this makes cigarettes 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.’

To counter this price discounting, the federal government and the states must increase the price of tobacco products by increasing tobacco taxes. Congress should approve President Obama’s proposal to increase the federal cigarette tax by 94 cents per pack and Congress should similarly increase taxes on other tobacco products. The states must also significantly increase tobacco taxes, as Minnesota did this week in approving a $1.60 per pack hike in the cigarette tax. It is also encouraging that a growing number of jurisdictions are acting to restrict tobacco price discounting, as Providence, Rhode Island, has already done and New York City is currently considering. The evidence is clear that increasing the price of tobacco products is one of the most effective ways to reduce smoking and other tobacco use, especially among kids.

The states must also increase funding for tobacco prevention and cessation programs. Unfortunately, tobacco companies spend much more to market tobacco products than states spend to reduce tobacco use. In fiscal year 2013, the states are spending $459.5 million on programs to prevent kids from smoking and help smokers quit. That means tobacco companies spend more than $19 to market tobacco products for every $1 states spend to reduce tobacco use. The states are collecting $25.7 billion this year in revenue from the tobacco settlement and tobacco taxes and should spend more of it to fight tobacco use.

At the federal level, the Food and Drug Administration must effectively exercise its authority over tobacco products and marketing, the Administration must ensure that insurers provide the tobacco cessation treatment required by the health reform law, and the Centers for Disease Control and Prevention should continue its highly successful anti-tobacco advertising campaign, called Tips from Former Smokers.

Tobacco use is the nation’s number one cause of preventable death, killing more than 400,000 people and costing $96 billion in health care bills each year. These deaths and costs are entirely preventable if elected officials at all levels fight tobacco use as aggressively as the tobacco companies market their deadly products.