History of Tobacco Regulation - Consumption Trends

Cigarette smoking is widespread in America today; 45.9% of the male population 17 years of age and over and 30.5% of females 17 and over are smokers. In 1970, about $10.6 billion of individuals' expenditures was for cigarettes.

Data on cigarette sales and advertising has been obtained by the FTC from domestic cigarette manufacturers; the table below provides cigarette sales for the years 1963 to the present (Federal Trade Commission, 1970: 3) :

TOTAL CIGARETTES SOLD

Year Billions

1963 516.5

1964 505.0

1965 521.1

1966 529.9

1967 535.8

1968 540.3

1969 527.9

1970 534.2

The reduction in sales in 1964 coincides with the public attention given the Report of the Surgeon General issued on January 11, 1964. Public awareness of the dangers cited in the Report was high. It was soon forgotten, for in 1965 the total number of cigarettes sold was almost 5 billion higher than the year prior to the Surgeon General's Report.

In 1969 there was another significant decline; it has been suggested that this decline is attributable to several high-visibility events and also by sales tax increases. For example, the FCC ruling was upheld in November 1968 giving impetus to the antismoking TV campaign; the federal government's anti-smoking campaign was in full swing during 1968-69; the public outcry was being felt by economic interests-magazines, newspapers, personalities and advertising agencies which refused sponsorship for business from tobacco companies.

There were significant state tax increases immediately prior to 1969 which probably contributed to the reduction in sales during that year. During fiscal year 1967, 15 states increased their cigarette tax rates; the average increase was 3.5 cents. The rate increase ranged from New York's, Ohio's, and Illinois' two cents to California's and Florida's seven cents. The next year, seven more states increased their cigarette taxes. The rates ranged from Massachusetts' and Vermont's two cents to Minnesota's, Rhode Island's, and Tennessee's five cents the average increase approximately four cents (Council of State Governments, 1968: 196-197).

The ban on cigarette advertising on television and radio began on January 2, 1971, yet several calculations reflect a rise in cigarette sales during the past year. Business Week projections of industry sales and brand rankings show that a record 529 billion cigarettes were consumed in 1971, 1.5% more than 1970's sales (Where Cigarette Makers Spend, 1971: 56). Tobacco industry sources estimate that consumption has risen in 1971 by 1.5% to 535 billion cigarettes (Cigarette Sales Up, 1972: 3).

John C. Maxwell, tobacco analyst for Oppenheimer & Company, a brokerage firm, also reported a rise-2.3% in domestic unit sales in 1971. He relates part of the growth in cigarette consumption to the population mix the increase hit the 20-40 year age group, where smoking is heaviest. The Maxwell report suggests that the rest of this growth must be related to "government overkill, wherein many voices in Washington suggest that everything we eat or drink is harmful" (Maxwell, 1971: 1).

An industry specialist with Manufacturers Hlanover Trust Company, on the other hand, attributes both the lag in sales in 1969 and the new increase to the "very effective antismoking ads on television. Since the ban, these commercials rarely appear" (Cigarette Sales Up, 1972: 3).

Another industry executive notes, "For years we have believed that the role of cigarette advertising is to attract smokers from competitive brands rather than induce nonsmokers to start smoking. We failed to convince the Federal Communications Commission of this, but it is borne out by our industry's experience since the TV ban. Within a relatively stable market, some companies have continued to gain while others lost. Some brands have increased their share of market while others have declined" (Where Cigarette Makers Spend, 1971: 56). Skeptics continue to argue that tobacco companies have also been trying to recruit new young smokers.