Tobacco Industry Spending

Tobacco Industry Spending in the United States

Cigarette, smokeless tobacco, and e-cigarette companies spend billions of dollars each year to market their products in the United States.A12

• In 2022, the largest cigarette companies spent $8.01 billion on advertising and promotional expenditures, including price discounts.12
  • Price discounts are paid to cigarette retailers. They reduce the price of cigarettes and could increase use among price-sensitive consumers, including youth. In 2022, these discounts were the largest cigarette advertising and promotional expenditure, totaling $5.74 billion (accounting for 71.7% of total advertising and promotion expenditures that year).1
• In 2022, the largest smokeless tobacco manufacturers spent $572.7 million on advertising and promotion.B
• In 2021, the largest e-cigarette manufacturers spent $859.4 million to advertise and promote their products. These manufacturers spent $90 million more in this category during 2021 (latest year data are available).
  • Spending on point-of-sale advertising for e-cigarettes totaled $96.5 million in 2021.
  • E-cigarette companies spent about $2.4 million each day on advertising and promotion in 2021.
  • In 2015, e-cigarette companies spent $197.8 million on advertising and promotion. E-cigarette companies spent over three times as much money advertising in 2021 as they did in 2015.

The money that cigarette and smokeless tobacco companies spent in 2022 on U.S. marketing amounted to:

• ^· About $23.5 million each day.12
• ^· About $26 for every person, including adults and children.B123
• ^· About $278 spent by cigarette companies per year for each U.S. adult smoker (based on 28.8 million adult smokers in 2022).1

Cigarette promotional expenditures. The following three categories totaled approximately $7.7 billion and accounted for 96.2% of all advertising and promotional cigarette company expenditures in 2022:1

• Price discounts paid to retailers ($5.74 billion) and wholesalers ($1.14 billion) to reduce the price of cigarettes to consumers—about $6.9 billion.
• Promotional allowances paid to cigarette retailers, including payments to stock, shelve, display, and merchandise particular brands—$247.2 million.
• Promotional allowances paid to cigarette wholesalers, including payments for volume rebates, incentive payments, value-added services, and promotions—$577.7 million.

Smokeless tobacco promotional expenditures. The following three categories totaled $467.2 million and accounted for 81.6% of all advertising and promotional smokeless tobacco expenditures in 2022:2

• Price discounts paid to retailers ($360.5 million) and wholesalers ($33.8 million) to reduce the price of smokeless tobacco to consumers—about $394.3 million.
• Promotional allowances paid to smokeless tobacco retailers intended to facilitate the sale or placement of smokeless tobacco—$28.2 million.
• Promotional allowances paid to smokeless tobacco wholesalers—$44.7 million.

E-cigarette promotional expenditures. The following categories totaled 62.0% of promotional expenditures in 2021:

• Price discounts paid to retailers or wholesalers to reduce the price of e-cigarette products to consumers—about $261.6 million.
• Promotional allowances paid to wholesalers, such as payments for volume rebates, value-added services, promotional execution, and satisfaction of reporting requirements --$194.8 million.

Promotional allowances paid to retailers, such as payments for stocking, shelving, displaying, and merchandising brands and the cost of products given to retailers for free for subsequent resale to consumers--$76.6 million.