UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, DC 20580

1997 Smokeless Tobacco Report


Table of Contents

1. Introduction
1.1 Contents of the Report
2. Commission Activities with Respect to the Smokeless Tobacco Act
2.1 The Smokeless Tobacco Regulations
3. Statistical Data
3.1 Description of Tables and Charts
3.2 Discussion of the Data
4. Significant Events in the Smokeless Tobacco Products Market
4.1 Sales and Outlook
5. Conclusion

List of Tables

TABLE 1
SMOKELESS TOBACCO SALES BY YEAR (In Pounds)
 
TABLE 2
SMOKELESS TOBACCO SALES BY YEAR (In Dollars)
 
TABLE 3
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Year 1985)
 
TABLE 4A
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Years 1986 and 1987)
 
TABLE 4B
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Years 1988 and 1989)
 
TABLE 4C
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Years 1990 and 1991)
 
TABLE 4D
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Years 1992 and 1993)
 
TABLE 4E
SMOKELESS TOBACCO ADVERTISING AND PROMOTIONAL EXPENDITURES BY CATEGORY (For Years 1994 and 1995)
 
TABLE 5
SMOKELESS TOBACCO SALES IN DOLLARS AND TOTAL ADVERTISING AND PROMOTIONAL EXPENDITURES (For Years 1985-1995)
 
TABLE 6
SMOKELESS TOBACCO SALES IN POUNDS AND TOTAL ADVERTISING AND PROMOTIONAL EXPENDITURES (For Years 1985-1995)
 
TABLE 7
SMOKELESS TOBACCO SALES IN POUNDS AND DOLLARS
 
TABLE 8A
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1986)
 
TABLE 8B
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1987)
 
TABLE 8C
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1988)
 
TABLE 8D
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1989)
 
TABLE 8E
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1990)
 
TABLE 8F
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1991)
 
TABLE 8G
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1992)
 
TABLE 8H
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Year 1993)
 
TABLE 8I
SMOKELESS TOBACCO SALES BY TOBACCO TYPE (In Dollars and Pounds for Years 1994 and 1995)

Appendix A


1. INTRODUCTION

This report on smokeless tobacco is the sixth in a series that the Federal Trade Commission has submitted biennially to Congress pursuant to the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. §§ 4401-4408) ("Smokeless Tobacco Act"). Section 8(b) of the Smokeless Tobacco Act requires that:

The Federal Trade Commission shall transmit a report to the Congress no later than January 11, 1987, and biennially thereafter, containing (1) a description of the current sales, advertising, and marketing practices associated with smokeless tobacco products, and (2) such recommendations for legislation and administrative action as it deems appropriate.

1.1 Contents of the Report

Section 2 of this report describes the Commission's 1994 and 1995 law enforcement activities under the Smokeless Tobacco Act. It also reports on the status of the Commission's regulations implementing the Smokeless Tobacco Act.

Section 3 of the report discusses the report's statistical tables. These tables contain historical information on smokeless tobacco sales and advertising for 1985 through 1993 and new tables for 1994 and 1995 figures.

Section 4 of the report discusses trends in the advertising and marketing of smokeless tobacco products based on information gathered from marketing publications and the general press.

Beyond the issues currently being addressed in pending rulemaking proceedings (discussed in Section 2.1 below), the Commission currently has no recommendations to Congress for additional administrative action or legislation.

2. COMMISSION ACTIVITIES WITH RESPECT TO THE SMOKELESS TOBACCO ACT

2.1 The Smokeless Tobacco Regulations

The Smokeless Tobacco Act directs the Commission to issue implementing regulations governing the format and display of the statutory health warnings on packaging and in advertising for smokeless tobacco.(1) On October 24, 1986, the Commission promulgated regulations, specifying requirements as to the size, color, typeface, placement and rotation of the health warnings on packaging and in advertising.(2) The Commission's regulations also require manufacturers, packagers and importers to submit plans to the Commission providing for the periodic rotation of the three warnings. As discussed below, the Commission amended its regulations governing the rotation of promotional materials and utilitarian items in 1996.

On January 15, 1993, the Commission published a Notice of Proposed Rulemaking seeking public comment on a method for rotating the health warnings on promotional materials based on date of dissemination.(3) On February 14, 1995, the Commission published another Notice of Proposed Rulemaking seeking public comment on a proposal to permit rotation of warnings on utilitarian items based on either the date of order or the date of dissemination of the items, provided the production of such items is carried out in a manner consistent with customary business practices.(4) On August 30, 1996, the Commission, having considered all the issues raised in the two public comment periods, amended its regulations concerning the rotation of promotional materials and utilitarian items.(5) As amended, the regulations permit rotation of promotional materials and utilitarian items based on either the date of order or the date of dissemination, provided the production of such items or materials is carried out in a manner consistent with customary business practices. The effective date of these regulations was September 30, 1996.

The Commission also has an open rulemaking proceeding on the question whether the Smokeless Tobacco Act's health warning requirement for advertising applies to sponsored racing vehicles and other event-related objects that display the brand name, logo or selling message of smokeless tobacco products. That rulemaking is currently being reassessed in light of the Food and Drug Administration's 1996 rule governing the sale and distribution of cigarettes and smokeless tobacco products to children because the rule prohibits sponsorship of such events and teams in the brand names of cigarettes and smokeless tobacco products.

3. STATISTICAL DATA

This section describes the report's statistical tables, which provide numerical information for domestic smokeless tobacco sales and advertising activity for the years 1986 through 1995.(6) These tables were prepared by Commission staff using information collected pursuant to compulsory process from the five major manufacturers of smokeless tobacco products in the United States.(7)

In addition to providing newly-received data for 1994 and 1995, this report also corrects several entries in the Commission's 1995 report. The corrected figures in Tables 1 through 7 are indicated with asterisks. Tables 8A through 8H have also been corrected in this report because a review of the Commission's smokeless tobacco database led staff to change the categories (e.g., loose leaf, moist snuff) in which information for certain varieties of smokeless tobacco had been recorded in the past.

3.1 Description of Tables and Charts

Table 1 provides figures on the total domestic sales of smokeless tobacco in pounds for the years 1985 through 1995. Table 2 gives the sales revenues for these years in dollars. Tables 3 through 4E provide advertising and promotion expenditures by media and promotion category for 1985 through 1995.(8) Table 5 shows both the revenues and the total advertising and promotional expenditures for the years 1985 through 1995. The pounds sold and advertising and promotional expenditures for the same years are listed in Table 6. Table 7 shows both the number of pounds sold and the total revenues for smokeless tobacco products for the years 1985 through 1995. Tables 8A through 8I provide information for the years 1986 through 1995 on the sales of four types of smokeless tobacco: loose leaf chewing tobacco, plug and twist chewing tobaccos, scotch snuff and dry snuff, and moist snuff. Tables 8A through 8I also provide advertising and promotion expenditures for the various tobacco types.

3.2 Discussion of the Data

Table 1 shows that the number of pounds of smokeless tobacco sold decreased slightly from 1993 to 1994, but rose again in 1995. The 1995 increase is the first since 1991.

In contrast to the fluctuations in pounds sold, Table 2 shows that sales revenues to manufacturers of smokeless tobacco products have increased steadily over the ten year period from 1985 to 1995. Those revenues exceeded $1.6 billion in 1994 and $1.7 billion in 1995, and have grown by more than $100 million annually in each of the last five years.

Tables 3 through 4E, taken together, show that the total amount spent on advertising and promotion declined each year from 1985 to 1987, but increased annually from 1988 through 1995. Almost $126 million was spent on advertising and promotion in 1994, and more than $127 million was spent in 1995. These spending levels reflect increases of more than $6 million from 1993 to 1994, and another $1 million from 1994 to 1995.

Turning to the individual advertising and promotional categories, more money was spent providing consumers with cents-off coupons and retail value added promotions, such as buy-one-get-one-free offers or specialty gifts given at the point-of-sale, than on any other expenditure category during both 1994 and 1995. Spending on coupons and retail value added offers grew by more than $4 million from 1993 to 1994 (from $32.3 million to $36.7 million) but then declined almost $3 million from 1994 to 1995 (to $33.7 million). This was the first decline in spending on this category since the FTC began reporting these data in 1988.

Public entertainment spending reached nearly $25.4 million in 1994 (an increase of almost $2.5 million from 1993) and increased again in 1995 to $26.7 million. Public entertainment was the largest single advertising and promotion spending category every year from 1986 (when the Commission first collected these data) through 1990. Since 1991, it has ranked second each year behind spending on coupons and retail value added offers.

Spending to provide consumers with specialty promotional items, such as shirts and hats, other than at the point of sale more than doubled in 1994, increasing from $4.2 million in 1993 to nearly $10.4 million in 1994 (its highest level since the FTC began reporting smokeless tobacco expenditures). Spending on specialty promotional items declined slightly in 1995 to just under $10 million.

Spending on direct mail advertising fell significantly in 1994, but rose slightly in 1995. In 1994, spending on direct mail declined 90% from 1993 levels, falling from $1.1 million to $103,000. Spending on direct mail recovered slightly in 1995, rising to $253,000. Direct mail experienced a similarly dramatic decline in 1990, when spending in this category fell from over $935,000 to $78,000, only to rebound to $893,000 in 1991.

Spending on advertising in newspapers rose in 1994 to $1.5 million, up more than 25 percent from 1993. Spending rose once again in 1995, to almost $1.7 million, but was still below 1991 levels. Spending on advertising in magazines rose in both 1994 and 1995, reversing a three-year decline. The $10 million spent on magazine advertising in 1995 is the highest since the FTC began collecting data in 1986.

Spending on point of sale advertising and outdoor billboard advertising both rose in 1994 and 1995. Point of sale advertising rose from $13.5 million in 1993 to $15.2 million in 1995, while billboard expenditures went from $855,643 to $1.5 million during the same period. Spending to distribute free samples of smokeless tobacco products declined by approximately $1.5 million in 1994 (from $15.8 million to $14.3 million), but rose by almost the same amount in 1995 (to $15.7 million).

The figures in Table 5 indicate that sales revenues increased by 40 percent from 1991 through 1995, while advertising expenditures increased by 22 percent. Total sales revenues exceeded $1.6 billion in 1994 and $1.7 billion in 1995. Total advertising spending was nearly $126 million in 1994, and exceeded $127 million in 1995.

Table 6 shows that total spending on advertising and promotion increased by more than $8 million from 1993 to 1995, and that the total number of pounds of smokeless tobacco sold declined slightly from 1993 to 1994 (from 115.9 million pounds to 115.5 million pounds), but then rose in 1995 (to 116.4 million pounds) for the first time since 1991. Table 7 illustrates that the sales revenues earned by the smokeless manufacturers increased by more than $120 million annually in both 1994 and 1995.

Tables 8A through 8I present details on sales in terms of dollars, pounds, and advertising expenditures by type of smokeless tobacco.(9) Table 8I shows that loose leaf/chewing tobacco remains the most popular form of smokeless tobacco, with over 54.2 million pounds sold in 1994, and 54.6 million pounds sold in 1995. Sales of loose leaf/chewing tobacco have declined by 12 percent since 1991, however, when 62.2 million pounds were sold. Moist snuff has been the smokeless tobacco product with the strongest sales increase since 1986, growing from 36.1 million pounds that year to 53.1 million pounds sold in 1995; 1995 moist snuff sales almost matched those of loose leaf. Sales of plug/twist chewing tobacco, as well as sales of scotch and dry snuff, remained below 5 million pounds in 1994 and 1995.

The sales revenues reported by the smokeless tobacco manufacturers show that moist snuff generated the highest revenues of any category. Revenues from sales of moist snuff exceeded $1.2 billion in 1994, and $1.3 billion in 1995. Revenues from loose leaf/chewing tobacco fell from $319.7 million in 1993 to $316.9 million in 1994, but then grew in 1995 to more than $323.2 million. Sales revenues for plug and twist chewing tobacco fell by $1.6 million from 1993 to 1994, and then by another $1.1 million in 1995 to $38.0 million. Total revenues from the sale of scotch and dry snuff rose from 1993 to 1994 (from $54.3 million to $55.6 million) before declining in 1995 to $53.9 million.

Advertising expenditures indicate that moist snuff has received the greatest support since 1986. The five major manufacturers spent nearly $80.0 million promoting moist snuff in 1994, and almost $82.0 million on such promotions in 1995. Spending on moist snuff exceeded spending for all other types of smokeless tobacco combined. In 1994, $44.8 million was spent on advertising for loose leaf/chewing tobacco, just under $1 million was spent on plug and twist advertising, and $272,038 was spent advertising scotch and dry snuff. In 1995, $43.8 million was spent on loose leaf/chewing tobacco advertising, $1.0 million was spent to promote plug and twist tobacco, and $486,280 was spent advertising scotch and dry snuff.

4. SIGNIFICANT EVENTS IN THE SMOKELESS TOBACCO PRODUCTS MARKET

4.1 Sales and Outlook

The total number of pounds of smokeless tobacco sold declined from 1993 to 1994, but sales rebounded in 1994 to exceed the 1993 level. Although loose leaf tobacco remained the most popular form of smokeless tobacco in 1995 in terms of pounds sold, published reports predict that sales of moist snuff will soon surpass sales of loose leaf tobacco.(10)

Of the five major domestic manufacturers of smokeless tobacco, U.S. Tobacco reportedly continued to lead the industry with 37.1 percent of the market in 1995.(11) Conwood's market share was reported to have been 24.2 percent, and Pinkerton's share was reported at 22.3 percent.(12) Published reports also indicate that National's market share was 9.2 percent, while Swisher's was 6.2 percent.(13) Finally, the two smaller manufacturers, B&W and RC Owen, were reported to have 0.6 percent and 0.4 percent of the market respectively.(14) In the market of moist snuff, however, published reports indicate that U.S. Tobacco controls 81 percent of the market, while Conwood has 13 percent, Swisher has 5 percent, and Pinkerton has 1 percent.(15)

5. CONCLUSION

The Commission is pleased to provide the Congress with this update of the sales and advertising practices of the smokeless tobacco industry. Commission staff will continue to monitor compliance with the Smokeless Tobacco Act and smokeless tobacco advertising and sales to determine what Commission action, if any, may be appropriate.


TABLE 1
SMOKELESS TOBACCO SALES BY YEAR
(In Pounds)
YEAR          TOTAL POUNDS
1985         121,449,115
1986         118,778,334
1987         116,540,281
1988         114,433,782
1989         116,440,365
1990         117,415,326
1991         120,110,686
1992         118,372,693
1993         115,888,785
1994         115,495,201
1995         116,387,464
TABLE 2
SMOKELESS TOBACCO SALES BY YEAR
(In Dollars)
YEAR               TOTAL DOLLARS
                     1985                $730,618,970
                     1986                $797,777,885
                     1987                $852,717,347
                     1988                $901,654,382
                     1989                $981,637,304
                     1990              $1,091,170,201
                     1991              $1,237,961,670
                     1992              $1,361,360,729
                     1993              $1,475,460,518
                     1994              $1,612,098,989
                     1995              $1,735,840,489
TABLE 3
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
                                     1985
               Television and Radio Advertising     $26,584,731
               Total Print                           $8,719,379
               All Other                            $44,764,119
               Total                                $80,068,229
TABLE 4A
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
                           1986                 1987
Newspapers                    $626,979          $1,452,710
Magazines                   $6,226,654          $9,237,988
Outdoor                     $2,722,557          $8,321,315
Television and Radio(16)    $16,067,211                   0
Audio, Visual               $2,579,268                   0
Transit                              0                   0
Point of Sale               $4,234,207          $5,789,436
Promotional Allowances      $8,231,580          $7,554,592
Sampling                   $13,699,156         $13,877,923
Distribution 
  Bearing Names             $2,353,816          $4,312,094
Direct Mail                    $20,844             $48,979
Public Entertainment       $13,823,266         $14,844,425
Endorsements                  $435,710            $245,105
All Other                   $5,655,458          $2,092,477
TOTAL                      $76,676,706         $67,777,044
TABLE 4B
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
                          1988                  1989
Newspapers                    $940,256            $449,918
Magazines                   $5,778,582          $6,410,401
Outdoor                     $4,801,955          $2,913,074
Audio, Visual                        0                   0
Transit                              0                   0
Point of Sale               $7,436,270          $9,693,996
Promotional Allowances      $6,360,041          $8,327,225
Sampling                   $12,345,180         $15,019,174
Distribution 
  Bearing Names             $4,055,180          $4,611,457
Direct Mail                   $623,731            $935,370
Public Entertainment       $17,501,791         $19,638,397
Endorsements                  $260,539            $292,290
Coupons and Retail
  Value Added               $4,655,429          $9,689,049
All Other                   $3,463,919          $3,220,210
TOTAL                      $68,223,671         $81,200,611
TABLE 4C
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
                          1990                 1991
Newspapers                 $1,655,698*         $1,736,489
Magazines                  $9,439,211          $9,025,972
Outdoor                    $2,650,471*         $1,644,287
Audio, Visual                       0                   0
Transit                             0                   0
Point of Sale             $10,320,657         $10,749,602
Promotional Allowances     $9,936,022         $14,771,597*
Sampling                  $13,461,932         $13,959,101
Distribution 
  Bearing Names            $2,854,289          $3,866,263
Direct Mail                   $78,000            $893,000
Public Entertainment      $20,272,355         $21,116,095
Endorsements                 $264,484            $344,000
Coupons and Retail
  Value Added             $16,438,440         $23,306,499
All Other                  $2,729,768          $2,591,135
TOTAL                     $90,101,327*       $104,004,040*
TABLE 4D
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
                          1992               1993
Newspapers                  $865,849          $1,142,320
Magazines                 $8,661,480*         $7,173,120 
Outdoor                     $694,388            $855,643
Audio, Visual                      0                   0
Transit                            0                   0
Point of Sale            $12,133,489         $13,465,302
Promotional Allowances   $11,397,882         $13,073,381
Sampling                 $15,975,134         $15,794,391
Distribution 
  Bearing Names           $2,609,348          $4,246,353
Direct Mail               $1,289,000          $1,099,000
Public Entertainment     $21,511,594         $22,912,765
Endorsements                $155,000            $215,000
Coupons and Retail
  Value Added            $31,524,486         $32,297,431
All Other                 $8,529,058          $6,956,120
TOTAL                   $115,346,708*       $119,230,826*
TABLE 4E
SMOKELESS TOBACCO
ADVERTISING AND PROMOTIONAL EXPENDITURES
BY CATEGORY
   		         1994 		  1995
Newspapers   	  $1,510,771          $1,672,562
Magazines   	   $8,879,279         $10,003,093
Outdoor   	     $1,112,524          $1,474,121
Audio, Visual                     0                   0
Transit                           0                   0
Point of Sale           $13,555,569         $15,170,713
Promotional Allowances  $10,244,241          $8,304,066
Sampling                $14,279,127         $15,748,393
Distribution 
  Bearing Names         $10,368,596          $9,915,589
Direct Mail                $103,000            $253,000
Public Entertainment    $25,397,969         $26,749,679
Endorsements               $160,000            $160,000
Coupons and Retail
Value Added             $36,687,092         $33,701,379
All Other                $3,674,240          $4,170,687
TOTAL                  $125,972,408        $127,323,282
TABLE 5
SMOKELESS TOBACCO SALES   TOTAL ADVERTISING EXPENDITURES
(In Dollars)                  (In Dollars)
                                                    TOTAL ADVERTISING
            YEAR     REVENUES             YEAR      EXPENDITURES
            1985     $730,618,970         1985      $80,068,229*
            1986     $797,777,885         1986      $76,676,706
            1987     $852,717,347         1987      $67,777,044
            1988     $901,654,382*        1988      $68,223,671
            1989     $981,657,304*        1989      $81,200,611
            1990   $1,091,170,201*        1990      $90,101,327*
            1991   $1,237,961,670         1991     $104,004,040* 
            1992   $1,361,360,729         1992     $115,346,708*
            1993   $1,475,460,518         1993     $119,230,826*
            1994   $1,612,098,989         1994     $125,972,408
            1995   $1,735,840,489         1995     $127,323,282
SMOKELESS TOBACCO SALES   TOTAL ADVERTISING EXPENDITURES
(In Pounds)                (In Dollars)
                                                    TOTAL ADVERTISING
           YEAR     TOTAL POUNDS         YEAR       EXPENDITURES
           1985     121,449,115          1985       $80,068,229
           1986     118,778,334          1986       $76,676,706
           1987     116,540,281          1987       $67,777,044
           1988     114,433,782          1988       $68,223,671
           1989     116,440,365          1989       $81,200,611
           1990     117,415,326          1990       $90,101,327*
           1991     120,110,686          1991      $104,004,040*
           1992     118,372,693          1992      $115,346,708*
           1993     115,888,785          1993      $119,230,826*
           1994     115,495,201          1994      $125,972,408 
           1995     116,387,464          1995      $127,323,282
SMOKELESS TOBACCO SALES      SMOKELESS TOBACCO SALES
(In Pounds)      (In Dollars)
          YEAR      TOTAL POUNDS         YEAR      REVENUES
          1985      121,449,115          1985      $730,618,970
          1986      118,778,334          1986      $797,777,885
          1987      116,540,281          1987      $852,717,347
          1988      114,433,782          1988      $901,654,382*
          1989      116,440,365          1989      $981,637,304*
          1990      117,415,326          1990    $1,091,170,201*
          1991      120,110,686          1991    $1,237,961,670
          1992      118,372,693*         1992    $1,361,360,729
          1993      115,888,785          1993    $1,475,460,518
          1994      115,495,201          1994    $1,612,098,989
          1995      116,387,464          1995    $1,735,840,489
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1986
                 Type A - Loose Leaf/Chewing Tobacco
                          Dollar Sales = $255,668,419
                          Pounds Sold  =   65,697,634
              Advertising Expenditures =  $32,249,750
                Type B - Plug/Twist Chewing Tobacco
                          Dollar Sales =  $44,870,900
                          Pounds Sold  =    8,835,200
              Advertising Expenditures =     $896,821
               Type C - Scotch Snuff/Dry Snuff
                          Dollar Sales =  $58,951,001
                          Pounds Sold  =    8,110,168
              Advertising Expenditures =     $181,977
               Type D - Moist Snuff
                          Dollar Sales = $438,287,565
                          Pounds Sold  =   36,135,332
              Advertising Expenditures =  $43,348,158
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1987
               Type A - Loose Leaf/Chewing Tobacco
                         Dollar Sales = $267,766,776
                          Pounds Sold =   64,634,524
             Advertising Expenditures =  $28,403,536
              Type B - Plug/Twist Chewing Tobacco
                         Dollar Sales =  $44,267,561
                          Pounds Sold =    8,351,803
              dvertising Expenditures =     $559,597
             Type C - Scotch Snuff/Dry Snuff
                         Dollar Sales =  $56,709,742
                          Pounds Sold =    7,255,296
             Advertising Expenditures =     $263,482
             Type D - Moist Snuff
                         Dollar Sales = $483,973,268
                          Pounds Sold =   36,298,658
             Advertising Expenditures =  $38,550,429
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1988
            Type A - Loose Leaf/Chewing Tobacco
                        Dollar Sales = $264,298,268
                         Pounds Sold =   60,648,126
            Advertising Expenditures =  $26,198,078
            Type B - Plug/Twist Chewing Tobacco
                        Dollar Sales =  $40,429,972
                         Pounds Sold =    7,282,206
            Advertising Expenditures =     $868,954
            Type C - Scotch Snuff/Dry Snuff
                        Dollar Sales =  $57,221,662
                         Pounds Sold =    7,069,754
            Advertising Expenditures =     $501,543
            Type D - Moist Snuff
                        Dollar Sales = $539,704,480
                         Pounds Sold =   39,433,696
            Advertising Expenditures =  $40,655,096
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1989
            Type A - Loose Leaf/Chewing Tobacco
                      Dollar Sales = $281,701,402
                       Pounds Sold =   61,869,625
          Advertising Expenditures =  $34,057,050
            Type B - Plug/Twist Chewing Tobacco
                      Dollar Sales =  $35,132,105
                       Pounds Sold =    6,308,415
          Advertising Expenditures =   $1,787,775
           Type C - Scotch Snuff/Dry Snuff
                      Dollar Sales =  $62,155,826
                       Pounds Sold =    7,244,911
          Advertising Expenditures =     $654,591
           Type D - Moist Snuff
                      Dollar Sales = $602,647,971
                       Pounds Sold =   41,017,414
          Advertising Expenditures =  $44,701,195
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1990
          Type A - Loose Leaf/Chewing Tobacco
                    Dollar Sales = $295,462,446
                     Pounds Sold =   60,896,991
        Advertising Expenditures =  $35,194,561
         Type B - Plug/Twist Chewing Tobacco
                    Dollar Sales =  $41,316,133
                     Pounds Sold =    6,557,216
        Advertising Expenditures =   $1,655,886
         Type C - Scotch Snuff/Dry Snuff
                   Dollar Sales =  $56,601,390
                    Pounds Sold =    6,185,410
       Advertising Expenditures =     $472,404
        Type D - Moist Snuff
                   Dollar Sales = $697,790,232
                    Pounds Sold =   43,775,709
       Advertising Expenditures =  $52,778,476
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1991
       Type A - Loose Leaf/Chewing Tobacco
                 Dollar Sales = $321,458,416
                  Pounds Sold =   62,177,203
     Advertising Expenditures =  $38,190,095
      Type B - Plug/Twist Chewing Tobacco
                 Dollar Sales =  $42,379,173
                  Pounds Sold =    5,913,172
     Advertising Expenditures =   $1,326,216
     Type C - Scotch Snuff/Dry Snuff
                 Dollar Sales =  $56,881,288
                  Pounds Sold =    5,833,210
     Advertising Expenditures =     $517,145
     Type D - Moist Snuff
                 Dollar Sales = $817,242,793
                  Pounds Sold =   46,187,101
     Advertising Expenditures =  $63,970,584
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1992
     Type A - Loose Leaf/Chewing Tobacco
                Dollar Sales = $320,085,975
                 Pounds Sold =   58,850,933
    Advertising Expenditures =  $42,820,544
     Type B - Plug/Twist Chewing Tobacco
                Dollar Sales =  $42,625,799
                 Pounds Sold =    5,389,336
    Advertising Expenditures =   $1,722,361
    Type C - Scotch Snuff/Dry Snuff
                Dollar Sales =  $57,657,911
                 Pounds Sold =    5,623,404 
    Advertising Expenditures =     $354,774
    Type D - Moist Snuff
                Dollar Sales = $940,991,044
                 Pounds Sold =   48,509,020
    Advertising Expenditures =  $70,449,029
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
1993
     Type A - Loose Leaf/Chewing Tobacco
                Dollar Sales = $319,672,867
                 Pounds Sold =   55,912,562
    Advertising Expenditures =  $46,032,905
    Type B - Plug/Twist Chewing Tobacco
                Dollar Sales =  $40,702,849
                 Pounds Sold =    4,778,107
    Advertising Expenditures =   $1,367,877
    Type C - Scotch Snuff/Dry Snuff
                Dollar Sales =  $54,302,829
                 Pounds Sold =    4,996,957
    Advertising Expenditures =     $313,659
    Type D - Moist Snuff
                Dollar Sales =   $1,060,781,973
                 Pounds Sold =       50,201,159
    Advertising Expenditures =      $71,516,385
SMOKELESS TOBACCO SALES BY TOBACCO TYPE
(In Dollars and Pounds)
                                  1994                1995
       Type A - Loose Leaf/Chewing Tobacco
               Dollar Sales =   $316,888,405     $323,156,639 
                Pounds Sold =     54,242,322       54,605,149
   Advertising Expenditures =    $44,807,716      $43,842,237
       Type B - Plug/Twist Chewing Tobacco
               Dollar Sales =    $39,102,541      $37,996,428
                Pounds Sold =      4,410,333        4,156,158
   Advertising Expenditures =       $936,993       $1,032,856
      Type C - Scotch Snuff/Dry Snuff
               Dollar Sales =    $55,574,320      $53,885,040
                Pounds Sold =      4,814,130        4,490,094
   Advertising Expenditures =       $272,038         $486,280
      Type D - Moist Snuff
               Dollar Sales = $1,200,533,723   $1,320,802,382
                Pounds Sold =     52,028,416       53,136,063
   Advertising Expenditures =    $79,955,661      $81,961,909

APPENDIX A

Newspapers: Newspaper advertising, excluding expenditures in connection with sampling, distribution of items bearing names, and public entertainment.

Magazines: Magazine advertising, excluding expenditures in connection with sampling, distribution of items bearing names, and public entertainment.

Outdoor: Outdoor advertising, excluding transit advertising, sampling, distribution of items bearing names, and public entertainment.

Audio, Visual: Audio, visual or video advertising on any medium of electronic communication not subject to the Federal Communication Commission's jurisdiction, including screens at motion picture theaters, video cassettes, and monitors in stores.

Transit: Advertising on public transportation, excluding sampling, distribution of items bearing names, and public entertainment.

Point of Sale: Point-of-sale advertisements, excluding promotional allowances, sampling, distribution of items bearing names, and public entertainment, and retail value added and cents-off coupons.

Promotional Allowances: Promotional allowances paid to retailers and any other persons (other than employees) to facilitate the sale of any smokeless tobacco product, excluding newspapers, magazines, outdoor, audio visual, transit, and direct mail.

Sampling: Distribution of free samples of smokeless tobacco products, including the cost of the products and the cost of organizing, promoting, and conducting sampling.

Distribution Bearing Name: All costs of distributing items (other than smokeless tobacco products) including the cost of items distributed (whether the items are sold, redeemed by coupon, or otherwise distributed) that bear the name or depict any portion of the logo of a smokeless tobacco product; any payments received are subtracted; expenditures in connection with sampling are reported in that category; and expenditures on retail value added and cents-off coupon offers are excluded.

Direct Mail: Direct mail advertising, excluding sampling, distribution of items bearing names, public entertainment, and costs associated with retail value added and cents-off coupons.

Public Entertainment: Public entertainment events bearing or otherwise displaying the name of a company or a smokeless tobacco product, excluding sampling, and distribution of items bearing names.

Retail Value Added and Cents-off Coupons: All expenditures and costs associated with the value added to the purchase of smokeless tobacco products, including buy one get one free; buy one get x (promotional item) free; and all costs associated with cents-off coupons, whether redeemed at the point-of-sale or by mail, including costs of advertising, design, printing, distribution, and redemption.

Endorsements: Endorsements and testimonials, excluding newspapers, magazines, outdoor, audio visual, transit, direct mail, point-of-sale, and public entertainment.

All Other: Advertising and promotional expenditures not covered by another category.


1. 15 U.S.C. § 4402.

2. 15 Fed. Reg. 40,005 (1986).

3. 58 Fed. Reg. 4874 (1993). Promotional materials include both point-of-sale and non-point-of-sale materials. Point-of-sale promotional materials include shelf-talkers (cards or brochures attached to the shelf where the product is located in a retail outlet), rack header cards (cards identifying a particular smokeless brand on semi-circular racks displaying cans of snuff), and tear pads. Non-point-of-sale promotional materials include direct mail circulars, coupons, leaflets and pamphlets.

4. 60 Fed. Reg. 8312 (1995). Utilitarian items include items such as pens, pencils, clothing or sporting goods.

5. 61 Fed. Reg. 45,883 (1996).

6. Some 1985 data are included. The 1985 data are less detailed than those from 1986 forward because: (a) they were collected retrospectively; (b) they covered a time period before the Smokeless Tobacco Act was effective; and (c) they were meant to serve as baseline data.

7. Sales data are presented in terms of dollars and pounds, but not units sold. In contrast to cigarettes, there is no consistent unit for different types of smokeless tobacco products, such as loose leaf chewing tobacco (which is generally sold in pouches) and moist snuff (which is usually packaged in small cans). Moreover, the unit size may vary widely, even for the same type of smokeless tobacco. For example, loose leaf chewing tobacco is commonly sold in pouches, but the pouches may contain from 3.5 to 5 ounces of tobacco.

8. Appendix A provides the definition of the categories used to collect data on advertising and promotional expenditures.

9. FTC staff is reviewing the product categories used in Tables 8A-8I, and will revise these categories in future reports if they do not reflect current industry classifications.

10. John Maxwell, The Maxwell Report: USA-Smokeless, Tobacco Reporter 16, 19 (Aug. 1996).

11. Id. at 18.

12. Id.

13. Id.

14. Id.

15. Id. at 19.

16. Expenditures allocated for television and radio advertising on electronic media subject to Federal Communication Commission ("FCC") regulations cover approximately six months of 1986 because the statutory broadcast ban became effective on August 28, 1986.