Smokeless Tobacco Advertising and Promotional Expenditures and Revenues Up, According to FTC Report to Congress

Nearly $126 million was spent on advertising and promotion for smokeless tobacco products in 1994 -- an increase of $6.7 million from 1993 -- and more than $127 million was spent in 1995, according to a Federal Trade Commission report to Congress. Advertising and promotion expenditures have increased every year since 1987, when slightly less than $68 million was spent. The report notes increases in spending for, among other things, magazine advertising and public entertainment.

The report also shows that the total number of pounds of smokeless tobacco sold declined slightly from 1993 to 1994, but rose again in 1995 to exceed 1993 levels. The 1995 increase was the first since 1991. Despite that fluctuation in pounds sold, however, sales revenues increased in both years. Those revenues exceeded $1.6 billion in 1994 (an increase of more than $130 million over 1993 levels) and $1.7 billion in 1995. Revenues have increased each year since 1985.

More pounds of loose leaf/chewing tobacco were sold in 1994 and 1995 than any other type of smokeless tobacco. Advertising and promotional expenditures for moist snuff, however, exceeded the expenditures for all other types of smokeless tobacco combined: nearly $80 million in 1994 and almost $82 million in 1995. Moist snuff also had the highest revenues -- $1.2 billion in 1994 and $1.3 billion in 1995.

In addition to providing the total amount of annual advertising and promotional expenditures, the report also breaks down those expenditures by category. More money was spent in 1994 and 1995 on coupons and retail value added promotions (which includes both cents-off coupons and promotions such as "buy one get one free") than on any other expenditure category: spending increased from $32.3 million in 1993 to $36.7 million in 1994, then fell in 1995 to $33.7 million, the first decline in spending for coupons and retail value added since the FTC identified these expenditures as a separate advertising and promotion category in 1988. Public entertainment (such as sponsorship of sporting events) was the second largest spending category, with expenditures of $25.4 million in 1994, and $26.7 million in 1995. Spending on the distribution of free samples of smokeless tobacco products declined by $1.5 million from 1993 to 1994 (from $15.8 million to $14.3 million), but increased back to $15.8 million in 1995. Spending on magazine advertising increased from $7.2 million in 1993 to $10.0 million in 1995, the highest it has been since the FTC began collecting these data in 1986.

The Comprehensive Smokeless Tobacco Health Education Act of 1986 required the FTC to report on smokeless tobacco products in January 1987 and then every two years thereafter. The new report updates the one released in January 1995. It includes 1994 and 1995 data on sales and promotions, and discusses trends in the advertising and marketing of smokeless tobacco products.

Copies of the "1997 Smokeless Tobacco Report" are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov