Economic Trends in Tobacco
In 2016, tobacco companies spent $9.5 billion marketing cigarettes and smokeless tobacco in the United States. This amount translates to about $26 million each day, or more than $1 million every hour.1
- Cigarette advertising and promotional expenses totaled approximately $8.7 billion in 2016—an increase from $8.3 billion during 2015. In 2016, about 66.7% (about $5.8 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 $759.3 million on smokeless tobacco advertising and promotion during 2016—an increase from $684.9 million in 2015.2
- 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.
- Sales of e-cigarettes grew considerably during 2011–2015. During 2014-2015 alone, unit sales for e-cigarettes grew 14.4% overall. During this period, unit sales of disposable e-cigarettes declined 42.7%, unit sales of rechargeable e-cigarettes increased 5.3%, unit sales of e-cigarette liquid refills increased 307.7%, and unit sales of prefilled e-cigarette cartridges increased 31.6%. 3
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.
Trends in State and Federal Cigarette Tax and Retail Price—United States, 1970–2016
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 700 million pounds of tobacco in 2015.6
- In 2015, two states–North Carolina and Kentucky–accounted for more than 70% of total tobacco cultivation.6
- 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 $5.12 in Missouri to a high of $10.66 in New York, as of November 2016.8
- On average, federal and state excise taxes account for 44.3% of the retail price of cigarettes.8
Other Tobacco Product Sales
- Nearly 12 billion cigars, including 11.9 billion large cigars and 0.6 billion little cigars, were sold in the United States in 2015.9
- 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 March 2017—March 2018, three companies—Altria Group Inc., British American Tobacco and Swedish Match—accounted for 98% of U.S. dollar sales of smokeless tobacco.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
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.
- Federal Trade Commission. Federal Trade Commission Cigarette Report for 2016 [PDF–589 KB]. Washington: Federal Trade Commission, 2018 [accessed 2018 Mar 30].
- Federal Trade Commission. Federal Trade Commission Smokeless Tobacco Report for 2016 [PDF–632 KB]. Washington: Federal Trade Commission, 2018 [accessed 2018 Mar 30].
- Marynak KL, Gammon DG, et al. National and State Trends in Sales of Cigarettes and E-Cigarettes, U.S., 2011-2015. American Journal of Preventive Medicine 2017; doi: 10.1016/j.amepre.2017.01.016 [accessed 2018 Apr 16].
- 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 2017 Nov 6].
- Eriksen M, Mackay J, Schluger N, et al. The Tobacco Atlas, Fifth Edition[PDF–16.9 MB]. Atlanta: American Cancer Society; New York: World Lung Foundation, 2015 [accessed 2017 Nov 6].
- U.S. Department of Agriculture. Crop Production in 2015 Summary[PDF–1.98 MB]. Washington: U.S. Department of Agriculture, National Agricultural Statistics Service, 2016 [accessed 2018 Apr 17].
- Maxwell JC. The Maxwell Report: Year End & Fourth Quarter 2017 Cigarette Industry. Richmond, VA: John C. Maxwell, Jr., 2018 [cited 2018 Apr 4].
- Orzechowski and Walker. The Tax Burden on Tobacco, Volume 51. Arlington (VA): Orzechowski and Walker, 2016 [cited 2017 Nov 6].
- Maxwell JC. The Maxwell Report: Cigar Industry in 2015. John C. Maxwell, Jr., April 2016 [cited 2017 Nov 6].
- Wells Fargo Securities (April 2018) Equity Research/Tobacco. Nielsen: Tobacco ‘All Channel’ Data 3/24 [cited 2018 Apr 16].
- 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].
- Xu X, Bishop EE, Kennedy SM, Simpson SA, Pechacek TF. Annual Healthcare Spending Attributable to Cigarette Smoking: An Update. American Journal of Preventive Medicine 2014;48(3):326–33 [accessed 2017 Nov 6].
- 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
Media Inquiries: Contact CDC’s Office on Smoking and Health press line at 770-488-5493.
- Page last reviewed: May 4, 2018
- Page last updated: May 4, 2018
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