Tobacco Companies Spend More on In-store Promotions
WASHINGTON - A Federal Trade Commission report released Friday found that tobacco companies are spending more than ever on advertising and promotion, despite court-imposed restrictions, The Associated Press reports.
In particular, tobacco makers are using in-store promotions -- paying owners for prime shelf space and offering giveaways -- to sell their products, the report found.
The industry spent $9.5 billion on advertising and promotions in 2000, and $3.9 billion of that was spent on promotional allowances, according to the report.
Cigarette manufacturers in 1998 reached a $206 billion settlement with 46 states. The agreement banned cigarette advertising on billboards and public transportation. It also curtailed giveaways of branded merchandise and limited the number of public events such as auto races that companies could sponsor.
"What this report shows is that when the tobacco industry was required to curtail certain forms of advertising as a result of the 1998 settlement, it simply moved its marketing dollars to other places and increased its spending," Matthew Myers, president of the Campaign for Tobacco-Free Kids, told AP.
But Mike Pfeil, a spokesman for Philip Morris USA, told AP the settlement led to important changes in the way cigarettes are advertised.
"You've got a reduced visibility certainly with our products, and you've got a commitment to merchandize the products in a responsible fashion," Pfeil said.
They spent $3.5 billion on buy-one-get-one-free promotions and point-of-sale giveaways of non-cigarette items such as lighters.
Magazine and direct mail advertising declined, as did outdoor advertising and giveaways of free cigarettes.
"While magazine and billboard advertising declined, there was an explosion of marketing expenditures at the retail outlet," Myers said. "Seven out of 10 teen-agers visit a convenience store at least once a week. The retail outlet is the perfect place to get kids."
Pfeil said Philip Morris, the nation's largest cigarette manufacturer, pays retailers extra money to put its products behind counters and ensure customers are at least 18 years old. Federal law bans tobacco sales to anyone under 18.
"We're committed to responsibly marketing our product," Pfeil said. "I think we have a right to communicate with adult smokers in a responsible fashion."
In particular, tobacco makers are using in-store promotions -- paying owners for prime shelf space and offering giveaways -- to sell their products, the report found.
The industry spent $9.5 billion on advertising and promotions in 2000, and $3.9 billion of that was spent on promotional allowances, according to the report.
Cigarette manufacturers in 1998 reached a $206 billion settlement with 46 states. The agreement banned cigarette advertising on billboards and public transportation. It also curtailed giveaways of branded merchandise and limited the number of public events such as auto races that companies could sponsor.
"What this report shows is that when the tobacco industry was required to curtail certain forms of advertising as a result of the 1998 settlement, it simply moved its marketing dollars to other places and increased its spending," Matthew Myers, president of the Campaign for Tobacco-Free Kids, told AP.
But Mike Pfeil, a spokesman for Philip Morris USA, told AP the settlement led to important changes in the way cigarettes are advertised.
"You've got a reduced visibility certainly with our products, and you've got a commitment to merchandize the products in a responsible fashion," Pfeil said.
They spent $3.5 billion on buy-one-get-one-free promotions and point-of-sale giveaways of non-cigarette items such as lighters.
Magazine and direct mail advertising declined, as did outdoor advertising and giveaways of free cigarettes.
"While magazine and billboard advertising declined, there was an explosion of marketing expenditures at the retail outlet," Myers said. "Seven out of 10 teen-agers visit a convenience store at least once a week. The retail outlet is the perfect place to get kids."
Pfeil said Philip Morris, the nation's largest cigarette manufacturer, pays retailers extra money to put its products behind counters and ensure customers are at least 18 years old. Federal law bans tobacco sales to anyone under 18.
"We're committed to responsibly marketing our product," Pfeil said. "I think we have a right to communicate with adult smokers in a responsible fashion."