Economic Trends in Tobacco

Tobacco-Related Spending

In 2017, tobacco companies spent $9.36 billion marketing cigarettes and smokeless tobacco in the United States. This amount translates to more than $25 million each day, or more than $1 million every hour.1

  • Cigarette advertising and promotional expenses totaled approximately $8.64 billion in 2017—an increase from $8.71 billion during 2016. In 2017, about 71.7% (about $6.19 billion) of this was spent on price discounts paid to cigarette retailers to reduce the cost of cigarettes to consumers.1
  • Manufacturers spent a total of $718.32 million on smokeless tobacco advertising and promotion during 2017—a decrease from $759.35 million in 2016.2
  • A number of electronic products, such as electronic cigarettes (e-cigarettes), electronic cigars (e-cigars), and electronic pipes (e-pipes), are being introduced in the marketplace. However, current information on spending for marketing and promotion of these products is currently not available.
  • From 2012 through 2016, e-cigarette unit sales in the United States generally increased as product prices decreased. Nationally, the average monthly e-cigarette sales rate as summed across all product types sold increased by 132% during this timeframe (i.e., from 667 units per 100,000 people in 2012 to 1,547 units per 100,000 people in 2016).
  • Despite overall sales growth, e-cigarettes sales fluctuated across time by product type. Specifically, during 2012-2016, sales of rechargeables, prefilled cartridges, and e-liquids grew relatively steadily over time. However, sales for disposables increased sharply in late 2012, peaked in 2013, and later decreased in sales from 2014 to 2016.3

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.4

  • The United States is the fourth largest tobacco-producing country in the world, following China, India, and Brazil.5
  • Farms in the United States harvested more than 533 million pounds of tobacco in 2018.6
  • In 2018, two states–North Carolina and Kentucky–accounted for more than 70% of total tobacco cultivation.6
Picture of a no smoking sign

Tobacco Sales

Cigarette Sales

  • During 2017, about 249 billion cigarettes were sold in the United States—a 3.5% decrease from the 258 billion sold in 2016.7
    • Four companies—Philip Morris USA, Reynolds American Inc., ITG Brands, and Liggett—accounted for about 92% of U.S. cigarette sales.
    • Imports, primarily from Canada and South Korea, accounted for approximately 8.3% of U.S. cigarette inventories in 2016 and 7.9% in 2017.
  • By state, the average retail price of a pack of 20 cigarettes (full-priced brands), including federal and state excise taxes, ranged from $4.62 in Missouri to a high of $10.67 in New York, as of November 2017.8
  • On average, federal and state excise taxes account for 44.3% of the retail price of cigarettes.8

Other Tobacco Product Sales

  • During 2012–2016, total U.S cigar unit sales grew by 29%, which was largely driven by increasing sales of cigarillos.9
  • The total amount of smokeless tobacco sold by manufacturers to wholesalers and retailers in the United States was 129.36 million pounds in 2015, an increase from 127.81 million pounds sold in 2014.2
    • During June 2018–June 2019, three companies—Altria Group Inc., British American Tobacco and Swedish Match—accounted for nearly 98% of U.S. dollar sales of smokeless tobacco, with combined sales of more than $6 billion.10

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:11,12
    • 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

Image of a person breaking a cigarette

Increasing the price of tobacco products is the single most effective way to reduce consumption.13

  • 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.

References

  1. Federal Trade Commission. Federal Trade Commission Cigarette Report for 2017 pdf icon[PDF–589 KB]external icon. Washington: Federal Trade Commission, 2018 [accessed 2019 Apr 9].
  2. Federal Trade Commission. Federal Trade Commission Smokeless Tobacco Report for 2017 pdf icon[PDF–632 KB]external icon. Washington: Federal Trade Commission, 2018 [accessed 2019 Apr 9].
  3. Wang TW, Coats EM, Gammon DG, Loomis BR, Kuiper NM, Rogers T, et al. National and State-Specific Unit Sales and Prices for Electronic Cigarettes, United States, 2012–2016external icon. Preventing Chronic Disease 2018;15:170555 [accessed 2019 Apr 9].
  4. U.S. Department of Agriculture. 2012 Census of Agriculture: United States Summary and State Data, Volume 1, Part 51pdf icon[PDF–34 MB]external icon. Washington: U.S. Department of Agriculture, National Agricultural Statistics Service, 2014 [accessed 2017 Nov 6].
  5. Eriksen M, Mackay J, Schluger N, et al. The Tobacco Atlasexternal icon. Atlanta: American Cancer Society; New York: World Lung Foundation [accessed 2017 Nov 6].
  6. U.S. Department of Agriculture. Crop Production 2018 in 2015 Summary pdf icon[PDF–1.98 MB]external icon. Washington: U.S. Department of Agriculture, National Agricultural Statistics Service, 2019 [accessed 2019 Apr 9].
  7. Maxwell JC. The Maxwell Report: Year End & Fourth Quarter 2017 Cigarette Industry. Richmond, VA: John C. Maxwell, Jr., 2018 [cited 2018 Apr 4].
  8. Orzechowski and Walker. The Tax Burden on Tobacco, Volume 52. Arlington (VA): Orzechowski and Walker, 2017 [cited 2019 Apr 9].
  9. Gammon DG, Rogers T, Coats EM et al. National and State Patterns of Concept–Flavoured Cigar Sales, USA, 2012-2016. Tobacco Control 2019; 28(4):394-400 [cited 2019 Jul 3].
  10. Wells Fargo LLC (June 25, 2019) Equity Research/Tobacco. Nielsen ‘All Channel’ Data Through June 15, 2019 [cited 2019 Jul 3].
  11. 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 2017 Nov 6].
  12. Xu X, Bishop EE, Kennedy SM, Simpson SA, Pechacek TF. Annual Healthcare Spending Attributable to Cigarette Smoking: An Updateexternal icon. American Journal of Preventive Medicine 2014;48(3):326–33 [accessed 2017 Nov 6].
  13. 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 2017 Nov 6].

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.