Economics of Alcohol and Tobacco - Alcohol And Tobacco Advertising

industry tons metric ads

Alcohol Advertising

The Center for Science in the Public Interest (CSPI), a nonprofit health-advocacy organization based in Washington, D.C., estimated in 2001 that the alcohol industry spends nearly $3 billion a year on marketing and promotion. In 2003 alcohol advertising expenditures accounted for approximately $1.7 billion of marketing and promotion expenses.

According to data from Adams Business Media available through the CSPI Alcohol Policies Project, the beer industry spent approximately $1.2 billion in 2002 on advertising, up from $799.7 million in 1999. The liquor industry spent $408.1 million, up from $321.4 million in 1999. The wine industry spent $122.4 million, up from $120.5 million in 1995.

The beer industry focuses most of its advertising dollars on television, the wine industry focuses primarily on both print media (magazines, newspapers, and bill-boards) and television. Traditionally the liquor industry has focused its advertising primarily on print media, but spending on television and radio advertising rose substantially between 1999 and 2002. This dramatic increase is largely the result of the liquor industry's decision to lift its self-imposed ban on radio and television advertising.

LIFTING THE BAN.

The distilled spirits industry, in a self-imposed ban, had not advertised on television and radio for fifty years. In November 1996, however, the Distilled Spirits Council of the United States (DISCUS) announced that it had revised its advertising code and lifted the voluntary ban. DISCUS president and CEO Fred A. Meister said, "The absence of spirits from television and radio has contributed to the mistaken perception that spirits are somehow harder or worse than beer or wine and thus deserving of harsher social, political, and legal treatment." Meister continued, "Distilled spirits advertisement will continue to be responsible, dignified, and tasteful messages for adults and will avoid targeting those under the legal purchase age, regardless of the medium."

In 2001 NBC became the first broadcaster to end the ban on hard liquor advertising. It offered some restrictions: the ads would run only after 9 p.m. and only on programs where at least 85% of viewers are at least

TABLE 7.8
Tobacco area, yield, and production worldwide, by country, 2001-03

Area harvested Yield per hectare Productionb
2001 2002 2003a 2001 2002 2003a 2001 2002 2003a
Continent and country Hectares Hectares Hectares Metric tons Metric tons Metric tons Metric tons Metric tons Metric tons
North America:
Canada 25,091 25,091 25,091 2.12 1.95 1.70 53,112 49,015 42,683
Mexico 17,851 10,908 10,828 1.90 2.05 2.07 33,842 22,322 22,415
United States 174,992 173,782 173,782 2.57 2.32 2.32 449,745 403,000 403,518
Total 217,934 209,781 35,919 2.46 2.26 3.05 536,699 474,337 468,616
South America:
Argentina 60,000 65,500 72,100 1.64 1.95 1.61 98,110 127,500 116,000
Bolivia 1,060 1,060 1,060 0.92 0.92 0.92 980 980 980
Brazil 328,000 377,000 426,400 1.65 1.79 1.49 542,400 674,000 636,700
Chile 2,509 2,509 2,509 3.23 3.23 3.23 8,100 8,100 8,100
Colombia 23,000 23,000 23,000 1.83 1.83 1.83 42,000 42,000 42,000
Ecuador 1,774 1,774 1,774 0.62 0.62 0.62 1,100 1,100 1,100
Guyana 100 100 100 1.00 1.00 1.00 100 100 100
Paraguay 4,823 4,823 4,823 1.93 1.93 1.93 9,324 9,324 9,324
Peru 2,500 2,500 2,500 5.08 5.08 5.08 12,707 12,707 12,707
Uruguay 830 830 830 3.75 3.75 3.75 3,111 3,111 3,111
Venezuela 6,000 6,000 6,000 2.04 2.04 2.04 12,222 12,222 12,222
Total 430,596 485,096 541,096 1.70 1.84 1.56 730,154 891,144 842,344
Central America:
Costa Rica 105 105 105 1.85 1.85 1.85 194 194 194
El Salvador 600 600 600 1.95 1.95 1.95 1,167 1,167 1,167
Guatemala 8,793 9,232 9,232 2.22 2.22 2.22 19,562 20,540 20,540
Honduras 5,157 5,157 5,157 1.78 1.78 1.78 9,177 9,177 9,177
Nicaragua 844 844 844 1.60 1.60 1.60 1,349 1,349 1,349
Panama 1,160 1,160 1,160 2.04 2.04 2.04 2,367 2,367 2,367
Total 16,659 17,098 17,098 2.03 2.03 2.03 33,816 34,794 34,794
Caribbean:
Cuba 45,000 45,000 45,000 0.78 0.78 0.78 35,000 35,000 35,000
Dominican Rep 12,000 9,200 7,350 1.75 1.74 1.96 21,000 16,000 14,400
Haiti 400 400 400 1.53 1.53 1.53 611 611 611
Jamaica 1,175 1,175 1,175 1.99 1.99 1.99 2,339 2,339 2,339
St. Vincent 70 70 70 1.00 1.00 1.00 70 70 70
Trinidad & Tob. 100 100 100 1.70 1.70 1.70 170 170 170
Total 58,745 55,945 54,095 1.01 0.97 0.97 59,190 54,190 52,590
European Union:
Austria 115 115 115 1.74 1.74 1.74 200 200 200
Belgium-Lux 320 320 320 3.69 3.69 3.69 1,180 1,180 1,180
France 8,940 8,800 8,700 2.77 2.75 2.87 24,723 24,200 25,000
Germany 4,623 4,665 4,740 2.35 2.39 2.34 10,864 11,150 11,100
Greece 57,000 57,000 57,000 2.21 2.16 2.18 126,000 123,000 124,000
Italy 38,950 37,676 36,800 3.38 3.39 3.40 131,761 127,600 125,000
Portugal 2,105 2,100 2,100 2.90 2.91 2.91 6,111 6,111 6,111
Spain 12,669 12,430 12,250 3.32 3.35 3.35 42,100 41,650 41,000
Total 124,722 123,106 122,025 2.75 2.72 2.73 342,939 335,091 333,591
Western Europe:
Switzerland 635 635 635 2.09 2.09 2.09 1,325 1,325 1,325
Eastern Europe:
Albania 7,300 7,300 7,300 1.10 1.10 1.10 8,000 8,000 8,000
Bulgaria 32,460 37,260 37,260 1.26 1.35 1.35 40,885 50,210 50,210
Croatia 5,850 6,700 5,800 2.30 2.23 2.29 13,455 14,961 13,282
Hungary 5,100 5,500 5,800 2.14 1.94 2.07 10,900 10,650 12,000
Macedonia (Skopje) 22,000 22,000 22,000 1.41 1.41 1.41 31,111 31,111 31,111
Poland 12,600 11,300 10,800 1.98 2.12 2.04 25,000 24,000 22,000
Romania 12,000 12,000 12,000 1.23 1.23 1.23 14,750 14,750 14,750
Slovakia 2,000 2,000 2,000 1.75 1.75 1.75 3,500 3,500 3,500
Yugoslavia 6,200 6,200 6,200 1.23 1.23 1.23 7,604 7,604 7,604
Total 105,510 110,260 109,160 1.47 1.49 1.49 155,205 164,786 162,457

twenty-one years of age. Four months of ads promoting responsible drinking would precede the regular liquor spots. The broadcaster's decision was met with nearly universal derision, and a short time later NBC returned to its ban on hard liquor advertisements.

REACTIONS TO LIFTING THE BAN.

President Bill Clinton called the decision to end the fifty-year-old ban on alcohol advertising a "simply irresponsible move" that would make the job of rearing children harder. In April 1997 he called for an inquiry by the Federal

TABLE 7.8
Tobacco area, yield, and production worldwide, by country, 2001-03 [CONTINUED]

Area harvested Yield per hectare Productionb
2001 2002 2003a 2001 2002 2003a 2001 2002 2003a
Continent and country Hectares Hectares Hectares Metric tons Metric tons Metric tons Metric tons Metric tons Metric tons
FSU-12:c
Armenia 4,304 4,304 4,304 2.79 2.32 2.32 12,000 10,000 10,000
Azerbaijan 6,000 6,000 6,000 2.00 0.50 0.50 12,000 3,000 3,000
Belarus 800 800 800 1.75 1.75 1.75 1,400 1,400 1,400
Georgia 2,100 2,100 2,100 2.38 2.38 2.38 5,000 5,000 5,000
Kazakhstan 4,500 4,500 4,500 1.84 1.84 1.84 8,300 8,300 8,300
Kyrgyzstan 14,500 14,500 14,500 2.64 2.64 2.64 38,333 38,333 38,333
Moldova 25,000 25,000 25,000 0.60 0.48 0.48 15,000 12,000 12,000
Russia 2,000 2,100 2,200 0.90 0.90 0.91 1,800 1,900 2,000
Tajikistan 3,200 3,200 3,200 2.50 2.50 2.50 8,000 8,000 8,000
Turkmenistan 1,600 1,600 1,600 2.24 2.08 2.08 3,578 3,333 3,333
Ukraine 4,500 4,500 4,500 0.99 0.99 0.99 4,444 4,444 4,444
Uzbekistan 6,700 6,700 6,700 3.28 3.28 3.28 22,000 22,000 22,000
Total 75,204 75,304 75,404 1.75 1.56 1.56 131,855 117,710 117,810
North Africa:
Algeria 5,700 5,700 5,700 1.26 1.26 1.26 7,200 7,200 7,200
Libya 650 650 650 2.56 2.56 2.56 1,667 1,667 1,667
Morocco 5,948 5,948 5,948 1.21 1.21 1.21 7,194 7,194 7,194
Tunisia 3,100 4,000 4,000 1.79 1.39 1.39 5,556 5,556 5,556
Total 15,398 16,298 16,298 1.40 1.33 1.33 21,617 21,617 21,617
Other Africa:
Angola 3,950 3,950 3,950 0.99 0.99 0.99 3,900 3,900 3,900
Benin 917 917 917 0.77 0.77 0.77 702 702 702
Burundi 705 705 705 1.00 1.00 1.00 705 705 705
Cameroon 3,400 3,400 3,400 1.38 1.38 1.38 4,700 4,700 4,700
Central African Rep 600 600 600 0.83 0.83 0.83 500 500 500
Chad 145 145 145 1.38 1.38 1.38 200 200 200
Congo (Brazzaville) 4,000 4,000 4,000 0.45 0.45 0.45 1,800 1,800 1,800
Cote d'lvoire 3,700 3,700 3,700 1.11 1.11 1.11 4,110 4,110 4,110
Ethiopia 20,000 20,000 20,000 0.60 0.60 0.60 12,000 12,000 12,000
Ghana 4,500 4,500 4,500 0.74 0.74 0.74 3,333 3,333 3,333
Kenya 3,950 3,950 3,950 0.38 0.38 0.38 1,500 1,500 1,500
Liberia 14,500 14,500 14,500 1.38 1.38 1.38 20,000 20,000 20,000
Madagascar 10 10 10 1.00 1.00 1.00 10 10 10
Malawi 2,110 2,110 2,110 1.05 1.05 1.05 2,222 2,222 2,222
Mali 100,200 100,200 100,200 1.24 1.38 1.36 124,409 138,113 136,200
Mauritius 824 824 824 1.35 1.35 1.35 1,115 1,115 1,115
Mozambique 410 410 410 1.76 1.76 1.76 722 722 722
Niger 7,000 7,000 7,000 1.50 1.50 1.50 10,522 10,522 10,522
Nigeria 1,000 1,000 1,000 0.93 0.93 0.93 930 930 930
Reunion 10,000 10,000 10,000 2.10 2.10 2.10 21,000 21,000 21,000
Sierra Leone 200 2,000 2,000 1.00 0.10 0.10 200 200 200
South Africa; Rep 540 540 540 1.11 1.11 1.11 600 600 600
Swaziland 15,500 1,440 13,700 2.19 2.05 0.21 34,000 29,500 2,900
Tanzania; United Rep 200 200 200 1.00 1.00 1.00 200 200 200
Togo 35,500 35,500 35,500 0.00 0.00 0.00 27,967 27,967 27,967
Uganda 400 400 400 5.00 5.00 5.00 2,000 2,000 2,000
Zaire 7,525 7,525 7,525 3.33 3.33 3.33 25,080 25,080 25,080
Zambia 2,900 2,900 2,900 1.23 1.23 1.23 3,556 3,556 3,556
Zimbabwe 80,412 78,491 59,894 2.58 2.17 1.47 207,253 170,115 88,021
Total 325,098 323,877 204,380 1.58 1.50 1.84 515,236 487,292 376,685

Communications Commission (FCC) into the impact of lifting the ban.

In 1998, prompted by a congressional order, the Federal Trade Commission (FTC) investigated whether the alcohol industry was doing enough to discourage ads that appeal to underage drinkers. In a report to Congress in September 1999, the FTC called for beer, wine, and liquor companies to do more to ensure that minors do not see their advertisements. The FTC recommended that ads for alcoholic beverages should not be shown in theaters with movies rated PG or PG-13, on TV programs aimed at similar audiences, or on college campuses. Additionally, the FTC called for the formation of independent review boards to handle complaints from consumers and competitors about alcohol advertisements. The industry imposed self-regulated guidelines requiring that at least 50% of the audience for alcohol ads consist of adult consumers.

In September 2003 the FTC followed up on the recommendations issued in 1999 by surveying alcohol companies to see if they had followed the self-imposed guidelines and the recommendations offered by the FTC

TABLE 7.8
Tobacco area, yield, and production worldwide, by country, 2001-03 [CONTINUED]
SOURCE: "Table 2-46. Tobacco: Area, Yield, and Production in Specified Countries, 2001-2003," in Agricultural Statistics, U.S. Department of Agriculture, National Agricultural Statistics Service, 2004, http://www.usda.gov/nass/pubs/agr04/04_ch2.pdf (accessed March 7, 2005)

Area harvested Yield per hectare Productionb
2001 2002 2003a 2001 2002 2003a 2001 2002 2003a
Continent and country Hectares Hectares Hectares Metric tons Metric tons Metric tons Metric tons Metric tons Metric tons
Other Asia:
Bangladesh 31,161 31,161 31,161 1.12 1.12 1.12 35,000 35,000 35,000
Burma 36,000 36,000 36,000 1.22 1.22 1.22 44,000 44,000 44,000
Cambodia 9,685 9,685 9,685 0.80 0.80 0.80 7,748 7,748 7,748
China 1,339,600 1,327,710 1,262,525 1.75 2.10 2.07 2,349,627 2,783,516 2,617,036
India 395,500 485,000 435,000 1.48 1.49 1.52 585,500 650,000 660,000
Indonesia 205,000 205,000 194,000 0.84 0.83 0.82 172,200 170,150 158,900
Japan 23,411 23,720 23,720 2.59 2.53 2.53 60,565 60,000 60,000
Korea, North 20,000 20,000 20,000 1.33 1.33 1.33 26,640 26,640 26,640
Korea, South 23,940 21,200 21,200 2.32 2.47 2.47 55,587 52,350 52,350
Laos 6,700 6,700 6,700 5.54 5.54 5.54 37,111 37,111 37,111
Malaysia 15,972 14,390 11,000 0.52 0.80 1.09 8,299 11,468 12,000
Pakistan 43,319 46,897 48,150 1.91 1.98 1.97 82,854 92,880 94,700
Phillippines 39,130 31,464 34,585 1.77 2.55 2.36 69,219 80,100 81,600
Sri Lanka 4,480 4,480 4,480 1.34 1.34 1.34 6,000 6,000 6,000
Taiwan 2,929 2,115 2,115 2.50 2.50 2.50 7,322 5,287 5,287
Thailand 42,450 41,450 40,300 1.25 1.30 1.35 53,100 53,780 54,500
Vietnam 25,000 25,000 25,000 1.28 1.28 1.28 32,000 32,000 32,000
Total 2,264,277 2,281,972 2,164,421 1.60 1.82 1.80 3,632,872 4,148,030 3,905,882
Middle East:
Cyprus 80 80 80 4.88 4.88 4.88 390 390 390
Iran 20,000 20,000 20,000 1.17 1.17 1.17 23,333 23,333 23,333
Iraq 2,400 2,400 2,400 1.04 1.04 1.04 2,500 2,500 2,500
Jordan 2,900 2,900 2,900 0.78 0.78 0.78 2,255 2,255 2,255
Lebanon 9,700 9,700 9,700 1.55 1.55 1.55 15,000 15,000 15,000
Oman 270 270 270 5.35 5.35 5.35 1,444 1,444 1,444
Syria 15,000 15,000 15,000 1.15 1.15 1.15 17,200 17,200 17,200
Turkey 237,318 206,817 210,398 0.87 0.78 0.81 207,261 161,266 171,314
United Arab.
Emirates 50 50 50 13.52 13.52 13.52 676 676 676
Yemen 5,347 5,347 5,347 2.41 2.41 2.41 12,903 12,903 12,903
Total 293,065 262,564 265,875 0.97 0.90 0.92 282,962 236,967 245,571
Oceania:
Australia 3,185 3,185 3,185 2.44 2.44 2.44 7,762 7,762 7,762
New Zealand 600 600 600 2.58 2.58 2.58 1,550 1,550 1,550
Solomon Islands 100 100 100 0.95 0.95 0.95 95 95 95
Total 3,885 3,885 3,885 2.42 2.42 2.42 9,407 9,407 9,407
World total 3,931,728 3,965,821 3,610,291 1.64 1.76 1.82 6,453,277 6,976,690 6,572,689
aPreliminary.
bProduction data in metric tons, on farm-sales-weight basis, which is about 10 percent above dry-weight data normally reported in trade statistics.
cFSU-12 includes the 12 newly independent states of the former USSR.

in 1999. Their report Alcohol Marketing and Advertising: A Report to Congress also investigated whether flavored malt beverages (FMBs or "alcopops" such as "hard lemonade") and advertising for them were targeted to an underage audience. The FTC found that in 99% of cases the self-imposed guideline of reaching a 50% adult audience had been followed. It also found that the alcohol industry was doing a better job of external review and that FMBs were not targeted specifically at underage consumers and advertising for them was following the guidelines set. The industry also promised to improve the self-imposed guidelines by reaching a 70% adult audience in the future. The FTC recommended that the industry be more careful about content that could be seen as appealing to underage drinkers.

In spite of the high marks given to alcohol industry advertising by the FTC, a survey commissioned by the CSPI, conducted by the Global Strategy Group and released on July 16, 2002, determined that teens are getting substantial exposure to advertisements for alcopops. These drinks carry the brand names of hard liquors, such as Bacardi and Smirnoff. The CSPI study found that 77% of teens watch television after 9 p.m. on school nights, which is a time during which the liquor industry advertises. Public-health advocates suggest that advertising these sweet drinks on television is a "back-door" method by which liquor companies can promote their names to adolescent audiences on network television. In addition, they see alcopops as a way in which the alcohol industry encourages young FIGURE 7.1
Public opinion on a law banning all advertisement of hard liquor on television, 2001
SOURCE: Eileen M. Harwood, Alexander C. Wagenaar, and Debra H. Bernat, "Figure 9.5. Favor Banning Hard Liquor Ads on TV," in Youth Access to Alcohol Survey: Charts and Appendices, University of Minnesota, Alcohol Epidemiology Program, December 2002, http://www.epi.umn.edu/alcohol/pdf/Charts_Appendices.pdf (accessed March 7, 2005)
people who are unaccustomed to the taste of hard liquor to drink.

PUBLIC SUPPORT FOR RESTRICTIONS ON ALCOHOL ADVERTISING.

In neither the 1999 nor the 2003 report (the most recent at this writing) did the FTC recommend government regulation of alcohol advertising. Proponents of alcohol advertising restrictions, however, believe that industry self-regulation has failed and should be replaced by stricter government regulations. Critics state that even reaching a 30 to 50% underage audience is detrimental to children and teens.

The Youth Access to Alcohol Survey (Alcohol Epidemiology Program, University of Minnesota, December 2002; the most recent at this writing), released by the Robert Wood Johnson Foundation, found that Americans are very concerned about underage drinking and support restrictions on alcohol advertising. More than two-thirds (67.2%) either strongly or somewhat favored a ban on hard liquor advertising on television in 2001. (See Figure 7.1.) A smaller percentage of those surveyed (58.9%) either strongly or somewhat supported bans on beer and wine advertising on television. (See Figure 7.2.) Sixty-two percent favored bans on the use of sports teams and athletes as symbols in advertising and promotions of alcoholic beverages. (See Figure 7.3.)

IS THERE A LINK?

It is unclear whether exposure to alcohol advertising will predispose young people to drink. Both the Federal Trade Commission and the Department of Health and Human Services have released statements claiming there is no research suggesting a significant relationship between alcohol consumption and advertising. Recent studies (Casswell and Zhang 1998; Grube and Wallack 1994; Wylliet et al. 1998) are careful to state that alcohol advertisements may influence the decisions made about drinking by young men and women.

FIGURE 7.2
Public opinion on a law banning all advertisement of beer and wine on television, 2001
SOURCE: Eileen M. Harwood, Alexander C. Wagenaar, and Debra H. Bernat, "Figure 9.6. Favor Banning Beer and Wine Ads on TV," in Youth Access to Alcohol Survey: Charts and Appendices, University of Minnesota, Alcohol Epidemiology Program, December 2002, http://www.epi.umn.edu/alcohol/pdf/Charts_Appendices.pdf (accessed March 7, 2005)

Using advertising industry databases and methods, the Center on Alcohol Marketing and Youth (CAMY) at Georgetown University has documented that young people (ages twelve to twenty) were exposed to more alcohol advertisements in magazines than adults from 2001 to 2003: 52% more for beer and ale and 33% more for distilled spirits in 2001; 57% more for beer and ale and 23% more for distilled spirits in 2002; and 49% more for beer and ale and 20% more for distilled spirits in 2003. They were also sixty times more likely to see a commercial for alcohol than an advertisement for responsible drinking.

According to the CSPI, children frequently exposed to television beer ads can usually match brand names and beer slogans. The Budweiser frogs were part of a popular ad campaign launched in 1995, prompting Mothers against Drunk Driving president Karolyn Nunnallee to remark that "Alcohol marketers are bombarding our children with characters that look like they belong on Saturday morning cartoons, and it's absurd to think these don't affect our young people."

Children were nearly as familiar with the "Bud-weis-er" slogan as they were with Bugs Bunny's famous "What's Up Doc?" greeting. In 1996 the Budweiser ads were among children's favorite advertisements. (Children, Health and Advertising, Issue Briefs, Studio City, CA: Mediascope Press, 2000). The Budweiser ads were initially launched during the Super Bowl, home to more than a few liquor advertisements. Often these ads receive more attention than the game, leading CAMY's executive director to refer to them as the "Ad Bowl" of the "Super Bowl" ("Alcohol Commercials Bowl Over Responsibility Ads," US Newswire, February 3, 2003).

The Centers for Disease Control and Prevention (CDC) has expressed concern that alcohol ads placed in convenience stores, small groceries, and gas stations could increase underage drinking. These ads are often FIGURE 7.3
Public opinion on a law banning the use of sports teams and athletes as symbols in advertising and promotions of alcoholic beverages, 2001
SOURCE: Eileen M. Harwood, Alexander C. Wagenaar, and Debra H. Bernat, "Figure 9.4. Favor a Ban on Sports Ads and Promotions," in Youth Access to Alcohol Survey: Charts and Appendices, University of Minnesota, Alcohol Epidemiology Program, December 2002, http://www.epi.umn.edu/alcohol/pdf/Charts_Appendices.pdf (accessed March 7, 2005)
of "high intensity" and placed at a child's eye level. Particularly troubling is that CDC officials report that 75% of teenagers shop at convenience stores or gas stations weekly.

Tobacco Advertising

According to the FTC's Cigarette Report for 2002, which was issued in 2004, cigarette sales fell 5.5% over the previous year, to 376.4 billion cigarettes. Advertising expenditures in 2002 increased 11% from 2001, to approximately $12.5 billion, the most ever reported to the Federal Trade Commission. As expenditures increased, however, per capita cigarette consumption continued to drop. (See Figure 7.4).

The tobacco industry is forbidden by law to advertise on radio and television. Where do the industry's advertising dollars go? The largest share (about $7.9 billion) of the approximately $12.5 billion spent in 2002 was used for price discounts, which are paid to cigarette retailers or wholesalers to discount the price of the cigarettes to the consumer. Another approximate $2.5 billion was spent on sampling distribution—giving free cigarettes to the public. Slightly more than $1 billion was spent on giving bonus cigarettes with purchases, and about $1.3 billion was used for retailer promotional allowances, which pays them for stocking, shelving, and displaying cigarettes.

In 2001 the FTC required for the first time that cigarette makers report how much they spent on advertisements intended to reduce smoking among teenagers and adults. Cigarette makers spent $79.4 million on such advertisements in 2001 and $74.2 million in 2002 (which was not part of the $12.5 billion in advertising spending).

In the past, cigarette advertisements in magazines were usually full-page and full-color productions showing FIGURE 7.4
Cigarette consumption and marketing expenditures, 1975-2001
SOURCE: Adapted from Federal Trade Commission Cigarette Report for 2001, Federal Trade Commission, 2003 http://www.ftc.gov/os/2003/06/2001cigreport.pdf (accessed March 7, 2005)
glamorous, sophisticated people or rugged, outdoor types, depending on the market toward which the advertisement was targeted. New Food and Drug Administration (FDA) rules that were to become effective in August 1996 would have permitted just black and white, text-only advertising. However, lawsuits were filed against the FDA, contending, among other challenges, that these advertising restrictions violated the First Amendment protection of free commercial speech.

In March 2000 the Supreme Court ruled that federal health authorities, such as the FDA, have no power to regulate the manufacture and sale of cigarettes. A few days after the ruling was announced, President Bill Clinton urged Congress to give the FDA the authority to regulate tobacco advertising and tighten legislation regarding tobacco purchases by children under eighteen. In 2001 a bipartisan coalition renewed the effort to grant the Food and Drug Administration authority to regulate tobacco, reintroducing a bill that would let the FDA restrict tobacco advertising that targets children. The proposed legislation is called the Kids Deserve Freedom from Tobacco Act of 2001 (KIDS Act). The bill was referred to the Senate Committee on Health, Education, Labor, and Pensions, where it remained. On March 22, 2005, Senators Olympia Snowe, Michael DeWine, and Edward Kennedy introduced a refashioned bill: the Family Smoking Prevention and Public Health Protection Act, which would give the FDA the authority to regulate the marketing and manufacture of tobacco products in an effort to curb youth smoking.

ADVERTISING TARGETED AT WOMEN.

Women did not generally smoke—at least not in public—before World War I (1914-18). Just after the war, Lorillard began using images of women to advertise its Murad and Helman brands. During the 1920s Marlboro advertised in fashion magazines, and Lucky Strike encouraged women to "Reach for a Lucky Instead of a Sweet," implying that they could stay slim by smoking. Other ads focused on women's struggle to gain voting rights, encouraging women to express their desire for liberation by smoking.

In the late 1960s Philip Morris introduced its successful Virginia Slims brand. Its "You've Come a Long Way, Baby" campaign implied that smoking cigarettes was as much a part of women's rights as equal pay. John P. Pierce et al., in "Smoking Initiation by Adolescent Girls, 1944 through 1988" (Journal of the American Medical Association, February 23, 1994), found that "In girls younger than eighteen years, smoking initiation increased abruptly around 1967, when tobacco advertising aimed at selling specific brands to women was introduced. This increase was particularly marked in those females who never attended college. Initiation rates for females younger than eighteen years peaked around 1973, at about the same time sales of these brands peaked."

The controversial Virginia Slims campaigns continued. In 1991 the company launched the "Find Your Voice" campaign, showing beautiful women from around the world. The campaign, according to many critics, was about linking smoking to being attractive and empowered. A 2000 study by the Harvard School of Public Health noted that women in lead or supporting roles in films were more likely than their male counterparts to be depicted smoking. In 2001 cigarette ads appeared that targeted African-American women and implied that smoking makes women attractive, sexy, and the center of attention.

ADVERTISING TARGETED AT TEENAGERS.

Critics of tobacco advertising have frequently cited the cartoon character Joe Camel, which RJ Reynolds used to advertise its Camel brand of cigarettes, as an example of advertising targeted to children and teenagers. Results of a study reported in 1991 in the Journal of the American Medical Association noted that young people had been strongly influenced by the Joe Camel campaign. Among children, Joe Camel was as easily recognized as Mickey Mouse. Between 1987, when the campaign began, and 1993, the percentage of Camel smokers under the age of eighteen increased from 3% to 16%.

The RJ Reynolds Tobacco Company responded with a November 1993 survey indicating that Joe Camel was no more recognizable to teenagers than any other advertising character. Furthermore, the survey showed that recognition of Joe Camel did not necessarily influence teenagers to start smoking. The tobacco industry maintains that it has no desire to see teenagers smoking. According to the industry, peer pressure, not advertising, is the major factor that leads young people to smoke. The tobacco industry claims that its advertising is designed to attract the 60% of smokers who change their brand of cigarettes at some time during their lifetime.

Nevertheless, the Federal Trade Commission (FTC) officially issued an administrative complaint in May 1997. The FTC charged that the Joe Camel advertising campaign violated federal fair trade laws by promoting a lethal and addictive product to children and adolescents who could not legally purchase or use it. In 1997 the RJ Reynolds Tobacco Company agreed to eliminate Joe Camel and other cartoon characters from its advertisements and packaging.

THE PRISON MARKET.

The prison population has long represented a large and lucrative population for cigarette manufacturers. Many wardens passed out free cigarettes to prisoners. According to a Wall Street Journal article (Vanessa O'Connell, "Bans on Smoking in Prison Shrink a Coveted Market," August 27, 2003), inmates in the Menard Correctional Center in Illinois produced inexpensive cigarettes from the 1940s through the 1990s. The cigarettes were sold to the prisoners; the funds were then used to support prison programs. The Lorillard Tobacco Co. sponsored programs such as "Play Ball with Newport." Under this program, prison officials bundled together empty Newport pack wrappers to trade in for sports equipment or board games. They also offered the "Great Newport Sneaker Deal," in which three hundred to four hundred empty packs could be traded in for hightop sneakers.

Prisons have been a successful market for cigarette firms. As Mark Smith, a spokesman for Brown & Williamson, said in the Wall Street Journal article, "when smokers are either bored or under stress they might use more tobacco."

According to the article, roughly 70 to 80% of the prison population is thought to smoke regularly. A store in a large prison may generate $500,000 annually in cigarette sales (cigarettes can have markups as high as 60%, representing significant profits for a prison store).

BILLBOARD ADVERTISING.

On April 23, 1999, all tobacco billboards in the United States had to come down as part of the settlement between the tobacco industry and state attorneys general in forty-six states. The tobacco companies accepted the FDA's authority to regulate tobacco products and restrict their advertising. However, the outdoor advertising ban applied only to signs larger than fourteen square feet. Retailers put up smaller cigarette signs in front of their stores, "right at the kids' eye level," noted William Godshall, executive director of Smokefree Pennsylvania.

In 1998 a federal judge struck down New York City's Youth Protection against Tobacco Advertising and Promotion Act. This law prohibited tobacco advertisements on doors and awnings and in windows. The judge ruled that only the federal government (via the enactment of laws by Congress) could address public health concerns by imposing restrictions on tobacco advertising. Additionally, other court decisions in 1997, 1998, and 2000 ruled that the FDA did not have the authority to regulate tobacco products, which invalidated all of the FDA's 1996 regulations.

A number of cities and states then implemented restrictions on alcohol and tobacco billboard advertising. For example, the Los Angeles city council and the state of Massachusetts voted to ban tobacco and alcohol billboards and other outdoor advertising from locations within one thousand feet of parks, schools, and residential areas. The tobacco industry challenged the Massachusetts ban based on the right to free speech. In January 2001 the U.S. Supreme Court agreed to hear this case, and in June 2001 ruled that efforts to ban tobacco advertising near playgrounds and schools violate federal law and free speech rights. The Court added that cities and states may not add restrictions to the federal law that bans cigarette advertising on television and requires warning labels on packages. Only Congress has the power to amend federal law.

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or

Share
Popular Pages