The Federal Trade Commission recently published its Cigarette Report for 2013, showing that cigarette sales have fallen from $267.7 billion in 2012 to $265.7 billion in 2013.
This is a significant decline among the biggest cigarette companies, retailers and wholesalers; there has also been a decline in promoting and marketing for cigarettes, falling from $9.17 billion in 2012 to $8.95 billion in 2013. $7.64 billion of this figure was spent on discounting prices at wholesalers or retailers.
Discounting prices was the biggest cost for cigarette companies in 2013. This has been an ongoing trend since 2002, making up 85.4 percent of the industry’s expenses.
In contrast, there has been a rise in the smokeless tobacco industry. Promotions and advertising from companies rose from $435.9 million in 2012 to $503.2 million in 2013. In 2011, the industry spent $452 million on promotions and advertising.
Similar to cigarettes, the highest cost was discounting prices, amounting to $282.7 million, or 56.2 percent of the industry’s expenses for 2013.
As a whole, smokeless tobacco sales have increased from 2012’s 125.5 million pounds to 2013’s 128 million pounds. Total revenue for this market rose to $3.26 billion in 2013, a substantial increase over the $3.08 billion in 2012.