Big Tobacco Boosts Spending on Ads

WASHINGTON, D.C. Big Tobacco increased spending on advertising and promotions in 2001 despite a decline in cigarette sales, the Federal Trade Commission said today in its annual report on smoking industry trends.

The six largest manufacturers (Brown & Williamson Tobacco, Commonwealth Brands, Liggett Group, Lorillard Tobacco, Philip Morris and R.J. Reynolds) spent $11 billion on advertising and promotional materials, a 17 percent jump from the nearly $10 billion spent in 2000, according to the report. Cigarette sales declined by 3.8 percent.

There was a continuing shift in tobacco marketing away from newspaper, magazine and point-of-sale ads to promotions such as “buy one pack, get one free” and “buy three packs, get a free T-shirt,” according to the FTC’s findings. Big Tobacco spent nearly $5 billion on such promotions in 2001, up from the $3.45 billion spent the previous year.

Philip Morris attributed the ad increase to the increased cost of price and product promotions. “Philip Morris USA’s reported expenditures reflect a decrease in traditional brand image advertising as a result of the company’s voluntary reduction of advertising in magazines, newspapers and in retail stores,” said Tina Walls, a company representative, in a statement. “Philip Morris USA continues to take steps to reduce the overall visibility of its brand advertising to ensure that it is marketing its products in a responsible way to adult smokers.”