America’s largest tobacco companies are still spending billions to promote their products – but not that much of it is spent on advertising, according to a new study from the Federal Trade Commission.
Smoking spending has gone down steadily over the three-year term of the study, which looks at 2008-2010, and sales have gone down with it. Spending has gone down on the smokeless side, but in that case, spending actually peaked in the last year of the study.
The lion’s share of promotional spending is in the form of discounts to vendors, allowing them to sell products at discounted retail prices.
The companies spent $9.94B in 2008, $8.53B in 2009 (with 78.2% allocated to discounts) and $8.05B in 2010 (with 80.7% allocated to discounts).
Units sold or given to wholesale and retail vendors declined all three years, from 322.6B to 290.3B to 282.0B.
Smokeless tobacco advertising and promotion expense, a much smaller category, went from $547.87M to $492.10M to $444.20M during the period. Sales amounted to #2.76B in 2008, fell to $2.61B in 2009 but then spiked to $2.78B in 2010 despite the reduction in promotion money invested.