Big Tobacco's Profits From Youth Smokers Grow, Despite Smaller Numbers of Youth Smokers
Youth Smoking Rates Down, Industry Revenues Up
WASHINGTON, March 23 /PRNewswire/ -- Despite a drop in the US youth smoking rate, tobacco companies' revenue from youth smokers increased, according to a new report in the April issue of the journal Tobacco Control. In 1997 U.S. youth -- defined as students in grades 8 through 12 -- smoked 890 million packs of cigarettes, which generated $737 million in revenue for the tobacco industry. By 2002, youth cigarette consumption dropped to 541 million packs of cigarettes, but despite this decline in smoking, revenue for Big Tobacco jumped to $1.2 billion as a result of an increase in the (wholesale) price of cigarettes.
The report also calculates that throughout their lifetimes, the US high school senior class of 1997 will smoke an estimated 12.4 billion packs of cigarettes and earn the tobacco industry $27.3 billion in revenue. More than 80 percent of smokers start before they are 18, so addressing youth smoking is relevant not only to youth health, but also to long-term planning for the nation's healthcare programs.
American Legacy Foundation® President and CEO Cheryl Healton, Dr. P.H., the lead author of the research, said that despite the reduction in youth smokers -- from 5.6 million in 1997 to 3.6 million in 2002 -- the tobacco industry's revenue generated from these young smokers has increased.
"We acknowledge that youth are sensitive to price, and that increased cigarette costs help us to reduce youth smoking," Healton said. "However, price increases are not enough to significantly reduce incidences of youth smoking. Programs such as our national youth smoking prevention campaign truth® and similar state and local efforts must provide youth with information on smoking and tobacco industry marketing, so that youth can make informed decisions."
Lorillard Tobacco Company has sued the foundation to end its truth® campaign, and just last month, Philip Morris and RJ Reynolds tried to file court briefs on Lorillard's behalf. (The court did not allow the companies to file these briefs.) Revenue from youth smokers studied in this Tobacco Control article divided among the companies with 58 percent going to Philip Morris, 18 percent to Lorillard and 12 percent to RJ Reynolds.
Based on the decline outlined above, every high school senior in 2002 that did not smoke represents a loss of $20,000 in future revenue for the tobacco industry. If these rates continue at this pace, the trend will exceed the Healthy People 2010 objective of 16 percent youth smoking rates nationally by two years, in 2008. This trend would mean that 600,000 fewer high school seniors would smoke in 2008 than did in 2002.
Healton, however, expressed concern about the nation's ability to reach these goals.
"The rate of decline in youth smoking is smaller, and that gives us reason for concern," she said. "If Lorillard shuts down the truth® campaign, if state tobacco control programs don't survive, or if the tobacco industry continues to increase its marketing budgets, our nation could witness a spike in youth smoking, not to mention tobacco industry profits."
The American Legacy Foundation® is dedicated to building a world where young people reject tobacco and anyone can quit. Located in Washington, D.C., the foundation develops programs that address the health effects of tobacco use through grants, technical assistance and training, youth activism, strategic partnerships, counter-marketing and grassroots marketing campaigns, research, public relations, and outreach to populations disproportionately affected by the toll of tobacco. The foundation's national programs include Circle of Friends®, Great Start®, a Priority Populations Initiative, Streetheory® and truth®. The American Legacy Foundation was created as a result of the November 1998 Master Settlement Agreement (MSA) reached between attorneys general from 46 states, five US territories and the tobacco industry. Visit http://www.americanlegacy.org.