For Release:
August 12, 2003
FTC Report to Congress
Shows Increases in Smokeless Tobacco Revenues and Advertising and
Promotional Expenditures
Advertising and promotion expenditures
for smokeless tobacco products reached $236.7 million in
2001, according to a biennial
Federal Trade Commission
report. The report shows that promotional allowances (e.g. payments made
to retailers to facilitate sales) and retail value added (offers such as “buy
one, get one free” or “buy three, get free hat,” where
the smokeless tobacco product and the bonus item often are packaged together
as a single unit) were the top expenditure categories in 2001, with coupons
and magazine advertising also contributing substantially to industry spending.
The $236.7 million spent in 2001 represented a 39 percent increase over the
previously reported 1999 expenditure figure of $170.2 million. With only
two exceptions, advertising and promotion expenditures have increased every
year since 1987, when slightly less than $68 million was spent.
This 2003
report includes new 2000 and 2001 data on sales, and advertising and promotional
expenditures. The report shows that the total number of pounds
of smokeless tobacco sold by manufacturers to wholesalers and retailers increased
from 1999 (109.4 million pounds) to 2000 (111.7 million pounds), and then
again in 2001 (112.2 million pounds). Sales revenues received
by the manufacturers
also rose in both years: $1.99 billion in 2000 (up from $1.94 billion in
1999) and $2.13 billion in 2001. Revenues have increased
each year since 1985.
Moist snuff has been the leader
in smokeless tobacco revenues and marketing expenditures
since the Commission began collecting
these data and this trend continued in 2000 and 2001. Moist
snuff revenues in those two years were $1.63 billion and
$1.77 billion, respectively, more than the combined sales
of the other kinds of smokeless tobacco. Advertising and promotional
expenditures for moist snuff – $207.8
million in 2000 and $218.7 million in 2001 – also exceeded
the expenditures for all other types of smokeless tobacco
combined. More pounds of moist snuff were sold in 2000 (61.5
million) and 2001 (63.9 million) than the other types of
smokeless tobacco combined. Before 1996, loose leaf/chewing
tobacco had been the leading seller in terms of total pounds
sold.
In addition to providing the total
amount of annual advertising and promotional expenditures,
the report also breaks down
those expenditures by category. In 2000, more money was spent
on retail value added than on any other expenditure category – $64.9
million – with promotional allowances in second place
at $45.4 million. In 2001, promotional allowances led the
way with $60.9 million and retail value added was second
with $43.2 million in spending.
Copies of
the news release and the “Smokeless Tobacco
Report for 2000 and 2001" are available from the FTC’s
Web site at http://www.ftc.gov and
also from the FTC’s
Consumer Response Center, Room 130, 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580. The FTC works for the consumer
to prevent fraudulent, deceptive, and unfair business practices
in the marketplace and to provide information to help consumers
spot, stop, and avoid them. To file a complaint, or to get
free information on any of 150 consumer topics, call toll-free,
1-877-FTC-HELP (1 877-382-4357), or use the complaint form
at http://www.ftc.gov. The FTC enters Internet,
telemarketing, identity theft, and other fraud-related complaints
into Consumer Sentinel, a secure, online database available
to hundreds of civil and criminal law enforcement agencies
in the U.S. and abroad.
MEDIA CONTACT:
Brenda Mack
Office of Public Affairs
202-326-2182
STAFF CONTACT:
Michael Ostheimer
Bureau of Consumer Protection
202-326-2699
(http://www.ftc.gov/opa/2003/smokeless.htm)
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Related
Documents:
Federal
Trade Commission Smokeless Tobacco Report for the
Years 2000 and 2001
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Text
of Report [PDF 62Kb]
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