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Economic Facts About U.S. Tobacco Production and Use


Overview

Every year, tobacco companies spend billions of dollars on advertising and promotion, and tobacco use costs the United States billions of dollars in medical expenses and lost productivity.1,2,3,4

Picture of a no smoking sign


Tobacco-Related Spending

  • In 2012, the tobacco industry spent nearly $9.17 billion on cigarette advertising and promotional expenses in the United States alone, and 85% ($7.8 billion) of this was spent on price discounts.1
  • Smokeless tobacco advertising and promotion declined to $435.7 million in 2012—down from $451.7 million in 2011.1,2
  • In 2012, tobacco companies spent $9.6 billion marketing cigarettes and smokeless tobacco. This amount translates to about $26 million each day, or more than $1 million every hour.1
  • A number of electronic products, such as electronic cigarettes (e-cigarettes), cigars, and pipes, are being introduced in the marketplace. However, at the present time, comparable data on expenditures for the marketing and promotion of these products are not available.

NOTE: Advertising and promotional expenses include items such as magazine ads, distribution of cigarette samples or coupons for free samples, ads posted in retail stores, price discounts, payments to retailers for displaying brands, volume rebates for wholesalers, and direct-mail advertising.

Tobacco Production in the United States

Although U.S. tobacco production has decreased significantly since the 1980s (from nearly 180,000 tobacco-growing farms to about 10,000 in 2012), the United States continues to be a leading producer of tobacco leaves.5,6

  • The United States is the fourth largest tobacco-producing country in the world, following China (which produced 3.2 million tons in 2012), India, and Brazil.
  • Farms in the United States produced nearly 800 million pounds of tobacco in 2012.
  • In 2012, tobacco was grown in 19 U.S. states, with North Carolina, Kentucky, and Georgia accounting for nearly 80% of production.

Tobacco Sales

Cigarette Sales

  • During 2014, nearly 264 billion cigarettes were sold in the United States, a decrease from approximately 273 billion sold in 2013.7,8
  • Three companies—Philip Morris USA, Reynolds American Inc., and Lorillard—accounted for about 85% of U.S. cigarette sales.
  • Imports, primarily from Canada and South Korea, accounted for approximately 7.7% of U.S. cigarette inventories in 2013 and 8.2% in 2014.
  • Average cost to consumers of a pack of 20 nongeneric cigarettes is around $6.28, including federal, state, and local excise taxes (as of November 2014).9
  • A pack of 20 cigarettes can cost consumers as much as $10.56, including federal and state excise taxes.
  • Federal and state excise taxes account for an average of 43.8% of the retail price of cigarettes.

Other Tobacco Product Sales

  • About 13.2 billion cigars, including 12.5 billion large cigars and cigarillos and 0.7 billion little cigars, were sold in the United States in 2013.10
  • Smokeless tobacco sales totaled approximately 124.6 million pounds in the United States in 2011, an increase from 122.6 million pounds sold in 2010.11
    • Three companies—U.S. Smokeless Tobacco Company, American Snuff, and Swedish Match—account for nearly 90% of U.S. sales of smokeless tobacco.11

Economic Costs Associated With Smoking

Cost of Smoking-Related Illness

  • Smoking-related illness in the United States costs more than $300 billion each year, including:3,4
    • Nearly $170 billion for direct medical care for adults
    • More than $156 billion in lost productivity, including $5.6 billion in lost productivity due to secondhand smoke exposure

Effects of Increased Prices

Increases in cigarette prices lead to significant reductions in cigarette smoking. This is the single most effective way to reduce smoking.12

  • A 10% increase in price has been estimated to reduce overall cigarette consumption by 3–5%.
  • Research on cigarette consumption suggests that both youth and young adults are two to three times more likely to respond to increases in price than adults.12

Picture of a person breaking a cigarette


References

  1. Federal Trade Commission. Federal Trade Commission Cigarette Report for 2012[PDF–308 KB]. Washington: Federal Trade Commission, 2015 [accessed 2015 Apr 3].
  2. Federal Trade Commission. Federal Trade Commission Smokeless Tobacco Report for 2012[PDF–180.58 KB]. Washington: Federal Trade Commission, 2015 [accessed 2015 Apr 3].
  3. U.S. Department of Health and Human Services. The Health Consequences of Smoking—50 Years of Progress: A Report of the Surgeon General. Atlanta: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2014 [accessed 2015 Apr 3].
  4. Xu X, Bishop EE, Kennedy SM, Simpson SA, Pechacek TF. Annual Healthcare Spending Attributable to Cigarette Smoking: An Update[PDF–159 KB]. American Journal of Preventive Medicine 2014;48(3):326–33 [accessed 2015 Apr 3].
  5. U.S. Department of Agriculture. 2012 Census of Agriculture: United States Summary and State Data, Volume 1, Part 51[PDF–34 MB]. Washington: U.S. Department of Agriculture, National Agricultural Statistics Service, 2014 [accessed 2015 Apr 3].
  6. Eriksen M, Mackay J, Schluger N, et al. The Tobacco Atlas, Fifth Edition[PDF–17 MB]. Atlanta: American Cancer Society; New York: World Lung Foundation, 2015 [accessed 2015 Apr 3].
  7. Maxwell JC. The Maxwell Report: Year End & Fourth Quarter 2014 Cigarette Industry. Richmond, VA: John C. Maxwell, Jr., 2015 [cited 2015 Apr 3].
  8. Maxwell JC. The Maxwell Report: Year End & Fourth Quarter 2013 Cigarette Industry. Richmond (VA): John C. Maxwell, Jr., 2014 [cited 2015 Apr 3].
  9. Orzechowski and Walker. The Tax Burden on Tobacco[PDF–1.45 MB]. Arlington (VA): Orzechowski and Walker, 2014 [accessed 2015 Apr 3].
  10. Maxwell JC. The Maxwell Report: Cigar Industry in 2013. John C. Maxwell, Jr., April 2014 [cited 2015 Apr 3].
  11. Maxwell JC. The Maxwell Report: The Smokeless Tobacco Industry in 2011John C. Maxwell, Jr., 2012 [cited 2015 Apr 3].
  12. U.S. Department of Health and Human Services. Preventing Tobacco Use Among Youth and Young Adults: A Report of the Surgeon General. Atlanta: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2012 [accessed 2015 Apr 3].

For Further Information

Centers for Disease Control and Prevention
National Center for Chronic Disease Prevention and Health Promotion
Office on Smoking and Health
E-mail: tobaccoinfo@cdc.gov
Phone: 1-800-CDC-INFO

Media Inquiries: Contact CDC's Office on Smoking and Health press line at 770-488-5493.

 


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