Tobacco Industry News

Research

Do cigarette prices vary by brand, neighborhood, and store characteristics?
A study has found that pricing for the same cigarette brands can vary by 70 to 80% in different neighborhoods, and that demographic characteristics of neighborhoods surrounding shops were associated with price levels. The researchers compared the prices of three different brands manufactured by the same company, based on store type and neighborhood characteristics. The observed differences in pricing suggest that the tobacco industry may alter its marketing strategies based on neighborhood and store characteristics. Click here to read the abstract of the study, which was published in the July/August issue of Public Health Reports.

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Reports

FTC releases reports on cigarette and smokeless tobacco sales and marketing expenditures
According to a report by the Federal Trade Commission, the five largest cigarette companies in the U.S. have shown a decline in their spending on cigarette advertising and promotion. Spending on cigarette marketing declined from $13.11 billion in 2005 to $12.49 billion in 2006. However, another report showed that smokeless tobacco advertising and promotion spending increased to a little over $354 million in 2006 compared to over $250 million in 2005. Click here for more information on the reports. Click here to read the FTC report on cigarettes, or click here for the report on smokeless tobacco.

Tobacco sales fall starkly by -19.3%
Global duty free and travel retail tobacco sales have slumped by 19.3% in the first quarter of 2009 compared to the same quarter in 2008, with a 24% decline in airport sales. This may be the tobacco industry’s worst quarter ever recorded. Additionally, the Americas have experienced a significant drop of 12.3%. Although there has been a significant decline in tobacco sales, it may be too early to announce that the tobacco industry will continue to struggle. Click here to read more about the decline in global tobacco sales.

Philip Morris is test-marketing roll-your-own tobacco
Philip Morris has begun test marketing pouches and canisters of L&M brand roll-your-own tobacco products in Maine and Michigan. Roll-your-own tobacco sales remain a small market, but sales have increased 60% in the past five years, since taxes on cigarettes and other tobacco products have made loose tobacco a cheaper alternative. Philip Morris’s debut on the roll-your-own market may attract smokers who would not have considered trying more traditional brands of roll-your-own products, such as Bull Durham and Drum. However, growth in roll-your-own tobacco sales may be thwarted by a recent twenty-fold increase in the federal excise tax, which raised the tax to $24.78 per pound, or $1.16 for a three-quarter-ounce pouch. Click here to learn more.

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