The FTC's Annual Report on Cigarette Sales and Advertising for 2000
The Federal Trade Commission's annual report on cigarette sales and advertising for 2000 shows that cigarette sales increased slightly (0.5 percent) from 1999 levels, while advertising and promotional expenditures increased significantly. According to the
The 2000 report, released today, contains sales and marketing statistics for calendar year 2000 and historical data dating back to 1963, the year the FTC began collecting information from the cigarette industry. In 2000, the manufacturers reported to the Commission that they sold 413.5 billion cigarettes domestically, 2.2 billion more than they sold in 1999. The largest category of advertising and promotional expenditures was promotional allowances, which include payments to retailers for shelf space. Cigarette companies spent $3.91 billion in 2000 on promotional allowances (40.9 percent of total industry spending), up from $3.54 billion in 1999.
Spending on retail value-added - which includes both multiple-pack promotions ("buy one, get one free") and non-cigarette items, such as hats or lighters, given away at the point-of-sale with the purchase of cigarettes - rose from $2.56 billion in 1999 to $3.52 billion in 2000, an increase of 37.4 percent. At the same time, expenditures for distribution of branded specialty items (such as lighters) through the mail, at promotional events, or by any means other than at the point-of-sale with the purchase of cigarettes, declined from $335.7 million in 1999 to $264.8 million in 2000, a decrease of 21.1 percent.
Money spent giving cigarette samples to the public declined from $33.7 million in 1999 to $22.3 million in 2000, a decrease of 33.8 percent. In contrast, spending on discount coupons increased from $531 million in 1999 to $705.3 million in 2000.
The industry's expenditures on advertising in newspapers was $51.7 million in 2000, an increase of 1.4 percent from 1999 to 2000. Spending on magazine advertising decreased from $377.4 million in 1999 to $294.9 million, while outdoor advertising expenditures dropped from $53.8 million to $9.8 million and transit advertising fell from $5.6 million in 1999 to just $4,000 in 2000. Point-of-sale advertising increased from $329.4 million in 1999 to $347 million in 2000. The cigarette companies reported a total of $92.9 million for direct mail advertising in 2000, 1.8 percent less than the $94.6 million reported in 1999. The industry reported spending $949,000 on Internet advertising in 2000. Spending on public entertainment (e.g., sponsorship of concerts, auto racing, and fishing tournaments) was $309.6 million in 2000, an increase of 15.8 percent from 1999.
The Commission vote to issue the report, which is available on the FTC's Web site, was 5-0. (FTC File No. 012-3236; staff contact is Shira D. Modell, Bureau of Consumer Protection, 202-326-3116.)