Tobacco Cos. Spending Less on Advertising, Promotion

WASHINGTON, D.C. -- Large tobacco companies are spending less money on cigarette and smokeless tobacco advertising, according to a new report by the Federal Trade Commission (FTC).

Specifically, U.S. tobacco companies spent $8.53 billion in 2009 and $8.05 billion in 2010 on cigarette ads and promotions. Both are declines from the $9.94 billion they spent in 2008, the report said. The FTC has issued the Cigarette Report periodically since 1967, and another one, the Smokeless Tobacco Report, periodically since 1987.

The largest spending category in the Cigarette Report in both 2009 and 2010 was spending on price discounts paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers. This category accounted for $6.67 billion, or 78.2 percent of total spending on advertising and promotion in 2009, and $6.49 billion, or 80.7 percent of that total, in 2010.

The report also found that the number of cigarettes sold or given away to wholesalers and retailers in the United States declined from 322.6 billion in 2008 to 290.3 billion in 2009, and to 282.0 billion in 2010.

According to the Smokeless Tobacco Report, the major manufacturers of smokeless tobacco products in the United States also decreased the amount of money spent on advertising and promotions. Notably, the spending fell from $547.87 million in 2008 to $492.10 million in 2009, and again to $444.20 million in 2010.

The dollar value of sales by these manufacturers fell from $2.76 billion in 2008 to $2.61 billion in 2009, then rose to $2.78 billion in 2010, the report added.