Is Every Smoker Interested in Price Promotions? An Evaluation of Price-Related Discounts by Cigarette Brands

Follow the money: a closer look at US tobacco industry marketing expenditures

INTRODUCTION

While much of the concern with tobacco industry marketing has focused on direct media advertising, a less explored form of marketing strategy is to discount prices. Price discounting is important because it keeps the purchase price low and can undermine the impact of tax increases.

METHODS

We examine annual US marketing expenditures from 1975 to 2019 by the largest cigarette and smokeless tobacco companies as reported to the Federal Trade Commission. We consider three categories: direct advertising, promotional allowances and price discounting. In addition to considering trends in these expenditures, we examine how price discounting expenditures relate to changes in product prices and excise taxes.

RESULTS

US direct advertising expenditures for cigarettes fell from 80% of total industry marketing expenditures in 1975 to less than 3% in 2019, while falling from 39% in 1985 to 6% in 2019 for smokeless tobacco. Price discounting expenditures for cigarettes became prominent after the Master Settlement Agreement and related tax increases in 2002. By 2019, 87% of cigarette marketing expenditures were for price discounts and 7% for promotional allowances. Smokeless marketing expenditures were similar: 72% for price promotions and 13% for promotional allowances. Price discounting increased with prices and taxes until reaching their currently high levels.

CONCLUSIONS

Between 1975 and 2019, direct advertising dramatically fell while price discounting and promotional expenditures increased. Local, state and federal policies are needed that apply non-tax mechanisms to increase tobacco prices and restrict industry contracts to offset industry marketing strategies. Further study is needed to better understand industry decisions about marketing expenditures.

Tobacco Couponing: A Systematic Review of Exposures and Effects on Tobacco Initiation and Cessation

INTRODUCTION

Tobacco couponing continues to be part of contemporary tobacco marketing in the United States. We performed a systematic review of the evidence of tobacco product coupon receipt and redemption to inform regulation.

AIMS AND METHODS

We searched EMBASE OVID and Medline databases for observational (cross-sectional and longitudinal) studies that examined the prevalence of tobacco coupon receipt and coupon redemption across different subpopulations, as well as studies of the association between coupon receipt and redemption with tobacco initiation and cessation at follow-up. We extracted unadjusted and adjusted odds ratios for the associations between coupon exposure (receipt, redemption) and tobacco use outcomes (initiation, cessation) and assessed each studies' potential risk of bias.

RESULTS

Twenty-seven studies met the criteria for inclusion. Of 60 observations extracted, 37 measured coupon receipt, nine measured coupon redemption, eight assessed tobacco use initiation, and six assessed cessation. Tobacco product coupon receipt and redemption tended to be more prevalent among younger adults, women, lower education individuals, members of sexual and gender minorities, and more frequent tobacco users. Coupon receipt at baseline was associated with greater initiation. Coupon receipt and redemption at baseline were associated with lower cessation at follow-up among tobacco users. Results in high-quality studies did not generally differ from all studies.

CONCLUSIONS

Tobacco product coupon receipt and redemption are often more prevalent among price-sensitive subpopulations. Most concerning, our results suggest coupon receipt may be associated with higher tobacco initiation and lower tobacco cessation. Couponing thereby increases the toll of tobacco use and could prove to be a viable public health policy intervention point.

IMPLICATIONS

A systematic review was conducted of the scientific literature about the receipt, redemption, and effects on tobacco initiation and cessation of tobacco product couponing. This review found that tobacco coupons are more often received by price-sensitive persons and these coupons serve to increase tobacco initiation and decrease tobacco cessation. Policy efforts to address these consequences may help curb tobacco's harms and address health inequities.

Tobacco Industry Promotions and Pricing After Tax Increases: An Analysis of Internal Industry Documents

BACKGROUND

Increasing tobacco taxes, and through them, prices, is an effective public health strategy to decrease tobacco use. The tobacco industry has developed multiple promotional strategies to undercut these effects; this study assessed promotions directed to wholesalers and retailers and manufacturer price changes that blunt the effects of tax and price increases.

METHODS

We reviewed tobacco industry documents and contemporaneous research literature dated 1987 to 2016 to identify the nature, extent, and effectiveness of tobacco industry promotions and price changes used after state-level tobacco tax increases.

RESULTS

Tobacco companies have created promotions to reduce the effectiveness of tobacco tax increases by encouraging established users to purchase tobacco in lower-tax jurisdictions and sometimes lowering manufacturer pricing to "undershift" smaller tax increases, so that tobacco prices increased by less than the amount of the tax.

CONCLUSIONS

Policymakers should address industry efforts to undercut an effective public health intervention through regulating minimum prices, limiting tobacco industry promotions, and by enacting tax increases that are large, immediate, and result in price increases.

IMPLICATIONS

Tobacco companies view excise tax increases on tobacco products as a critical business threat. To keep users from quitting or reducing tobacco use in response to tax increases, they have shifted manufacturer pricing and developed specific promotions that encourage customers to shop for lower-taxed products. Health authorities should address tobacco industry efforts to undercut the effects of taxes by regulating prices and promotions and passing large and immediate tax increases.

Antismoking Advertisements and Price Promotions and Their Association With the Urge to Smoke and Purchases in a Virtual Convenience Store: Randomized Experiment

Background

Point of sale (POS) advertising is associated with smoking initiation, current smoking, and relapse among former smokers. Price promotion bans and antismoking advertisements (ads) are 2 possible interventions for combating POS advertising.

Objective

The purpose of this analysis was to determine the influence of antismoking ads and promotions on urges to smoke and tobacco purchases.

Methods

This analysis examined exposure to graphic (graphic images depicting physical consequences of tobacco use) and supportive (pictures of and supportive messages from former smokers) antismoking ads and promotions in a virtual convenience store as predictors of urge to smoke and buying tobacco products among 1200 current cigarette smokers and 800 recent quitters recruited via a Web-based panel (analytical n=1970). We constructed linear regression models for urge to smoke and logistic regression models for the odds of purchasing tobacco products, stratified by smoking status.

Results

The only significant finding was a significant negative relationship between exposure to supportive antismoking ads and urge to smoke among current smokers (beta coefficient=−5.04, 95% CI −9.85 to −0.22; P=.04). There was no significant relationship between graphic antismoking ads and urge to smoke among current smokers (coefficient=−3.77, 95% CI −8.56 to 1.02; P=.12). Neither relationship was significant for recent quitters (graphic: coefficient=−3.42, 95% CI −8.65 to 1.81; P=.15 or supportive: coefficient=−3.82, 95% CI −8.99 to 1.36; P=.20). There were no significant differences in urge to smoke by exposure to promotions for current smokers (coefficient=−1.06, 95% CI −4.53 to 2.41; P=.55) or recent quitters (coefficient=1.76, 95% CI −2.07 to 5.59; P=.37). There were also no differences in tobacco purchases by exposure to graphic (current smokers: coefficient=0.93, 95% CI 0.67 to 1.29; P=.66 and recent quitters: coefficient=0.73, 95% CI 0.44 to 1.19; P=.20) or supportive (current smokers: coefficient=1.05, 95% CI 0.75 to 1.46; P=.78 and recent quitters: coefficient=0.73, 95% CI 0.45 to 1.18; P=.20) antismoking ads or price promotions (current smokers: coefficient=1.09, 95% CI 0.86 to 1.38; P=.49 and recent quitters: coefficient=0.90, 95% CI 0.62 to 1.31; P=.60).

Conclusions

The results of this analysis support future research on the ability of supportive antismoking ads to reduce urges to smoke among current cigarette smokers. Research on urges to smoke has important tobacco control implications, given the relationship between urge to smoke and smoking cigarettes, time to next smoke, and amount smoked.

Sales Trends in Price-Discounted Cigarettes, Large Cigars, Little Cigars, and Cigarillos-United States, 2011-2016

Introduction

Tobacco manufacturers continue to implement a range of pricing strategies to increase the affordability and consumption of tobacco products. To demonstrate the extent of retail- and brand-level price discounts at the point of sale, this study assessed national sales trends in price-discounted cigarettes, large cigars, little cigars, and cigarillos.

Methods

Retail scanner data for tobacco product sales were obtained for convenience stores (C-store) and all-other-outlets-combined (AOC) from September 25, 2011, to January 9, 2016. The proportion of price-discounted sales, average nondiscounted unit price, and average discounted unit price were examined by product category and brand. JoinPoint regression was used to assess average monthly percentage change.

Results

Overall, price-discounted sales accounted for 11.3% of cigarette, 3.4% of large cigar, 4.1% of little cigar, and 3.9% of cigarillo sales. The average difference between nondiscounted and discounted prices was 25.5% (C-store) and 36.7% (AOC) for cigarettes; 11.0% (C-store) and 11.2% (AOC) for large cigars; 19.2% (C-store) and 9.6% (AOC) for little cigars; and 5.3% (C-store) and 14.7% (AOC) for cigarillos. Furthermore, price-discounted sales of top-selling tobacco brands comprised up to 36% of cigarette, 7.4% of large cigar, 7.7% of little cigar, and 4.2% of cigarillo unit sales.

Conclusions

These findings highlight the use of price discounts by tobacco manufacturers to reduce the cost of cigarettes, large cigars, little cigars, and cigarillos to consumers. These sales patterns underscore the importance of sustained efforts to implement evidence-based strategies to increase prices and reduce availability and consumption of combustible tobacco in the United States.

Implications

This study highlights the prevalence and provides a baseline of price-discounted cigarettes, large cigars, little cigars, and cigarillos. Surveillance of tobacco sales data, including state-level trends and additional product types, is critical for informing approaches to reduce tobacco consumption. These approaches include countering tobacco product price-discounting practices and raising and maintaining a high sales price for all tobacco products. The implementation of evidence-based population-level interventions, together with local, state, and federal regulation of tobacco products, could prevent tobacco initiation, increase tobacco cessation, and reduce overall tobacco use among US youth and adults.

Comparison of Biomarkers of Tobacco Exposure between Premium and Discount Brand Cigarette Smokers in the NHANES 2011-2012 Special Sample

Background: Increased cigarette costs have inadvertently strengthened the appeal of discounted brands to price-sensitive smokers. Although smokers perceive discounted brands as having poorer quality, little is known about their delivery of toxic tobacco smoke constituents compared with premium-branded tobacco products.Methods: We investigated the differences between discount and premium brand smokers using the National Health and Nutrition Examination Survey 2011-2012 Special Smoker Sample. Our analyses focused on demographic differences and 27 biomarkers of harmful and potentially harmful constituents (HPHC) listed by the FDA, including volatile organic compounds, 4-(methylnitrosamino)-1-(3-pyridyl)-1-butanol and its glucuronide [4-(methylnitrosamino)-1-(3-pyridyl)-1-butanol glucuronide; reported as total NNAL (tNNAL)], metals, and polycyclic aromatic hydrocarbons (PAHs). Data were analyzed using linear regression models adjusting for potential confounders.Results: A total of 976 non-tobacco users and 578 recent cigarette smokers were eligible for analysis, of which 141 (26.0% weighted) smoked discount brand cigarettes and 437 (74.0% weighted) smoked premium. Discount brand smokers were older, predominantly non-Hispanic white, and had higher serum cotinine. Discount brand smokers had significantly higher levels of 13 smoking-related biomarkers, including tNNAL, uranium, styrene, xylene, and biomarkers of exposure to PAHs (naphthalene, fluorene, and phenanthrene), compared with premium brand smokers.Conclusions: These findings suggest that discount cigarette use is associated with higher exposure to several carcinogenic and toxic HPHCs.Impact: These results may have important regulatory implications for product standards, as higher exposures could lead to a greater degree of harm. Cancer Epidemiol Biomarkers Prev; 27(5); 601-9. ©2018 AACR.

Comparing projected impacts of cigarette floor price and excise tax policies on socioeconomic disparities in smoking

Background

About half of all US states have cigarette minimum price laws (MPLs) that require a per cent mark-up on prices, but research suggests they may not be very effective in raising prices. An alternative type of MPL sets a floor price below which packs cannot be sold, and may be more promising. This new type of MPL policy has only been implemented in 1 city, therefore its benefits relative to excise taxes is difficult to assess.

Methods

We constructed a set of possible state floor price MPL options, and matched them to possible state excise tax hikes designed to produce similar average price increases. Using self-reported price and cigarette consumption data from 23 521 participants in the 2010–2011 Tobacco Use Supplement of the Current Population Survey, we projected changes in pack prices and cigarette consumption following implementation of each paired MPL and tax option, for lower and higher income groups.

Results

We project that state MPLs set at the average reported pack price would raise prices by $0.33 and reduce cigarette consumption by about 4%; a tax with a similar average price effect would reduce consumption by 2.3%. MPLs and taxes that raise average prices by more than $2.00 would reduce consumption by 15.9% and 13.5%, respectively. In all models, we project that MPLs will reduce income-based smoking disparities more than their comparable excise taxes.

Conclusions

Floor price cigarette MPLs set at or above what consumers currently report paying could reduce both tobacco use and socioeconomic disparities in smoking.

Price-Minimizing Behaviors in a Cohort of Smokers before and after a Cigarette Tax Increase

Cigarette tax increases result in a reduced demand for cigarettes and increased efforts by smokers to reduce their cost of smoking. Less is known about how smokers think about their expenditures for cigarettes and the possible mechanisms that underlie price-minimizing behaviors. In-depth longitudinal interviews were conducted with Minnesota smokers to explore the factors that influence smokers’ decisions one month prior to a $1.75 cigarette tax increase and again one and three months after the increase. A total of 42 were sampled with 35 completed interviews at all three time points, resulting in 106 interviews across all participants at all time points. A qualitative descriptive approach examined smoking and buying habits, as well as reasons behind these decisions. A hierarchy of ways to save money on cigarettes included saving the most money by changing to roll your own pipe tobacco, changing to a cheaper brand, cutting down or quitting, changing to cigarillos, and buying online. Using coupons, shopping around, buying by the carton, changing the style of cigarette, and stocking up prior to the tax increase were described as less effective. Five factors emerged as impacting smokers’ efforts to save money on cigarettes after the tax: brand loyalty, frugality, addiction, stress, and acclimation.