Tobacco firms spend less on ads

After setting a record high in 2003, tobacco companies spent less money marketing and advertising their products in 2004 and 2005, a federal agency said Thursday.

Promotional spending by the five largest U.S. cigarette makers dropped to $14.15 billion in 2004, down from $15.15 billion in the previous year, and fell further to $13.1 billion in 2005, according to a report issued by the Federal Trade Commission.

The FTC has monitored cigarette sales and marketing trends in regular reports since 1967.

Anti-tobacco activists said the companies’ promotional spending was still double the amount spent in 1998, the year the major cigarette companies entered into a legal settlement with a group of U.S. states.

The tobacco industry spent $6.7 billion in marketing in 1998, the FTC report said.

Most of the tobacco companies’ promotional spending is in the form of price discounts to cigarette retailers and wholesalers to reduce the price of cigarettes to consumers, the FTC report said, while advertising in newspapers, magazines and on billboards has dropped significantly in recent years.

The tobacco companies provided $10.9 billion in price discounts in 2004, equal to 77.3% of all marketing expenditures, and $9.8 billion, or 74.6% of promotional spending, in 2005, the report said.