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Centers for Disease Control and Prevention
National Center for Chronic Disease Prevention and Health Promotion
Office on Smoking and Health
Tel: 1-800-CDC-INFO
(1-800-232-4636)
TTY: 1-888-232-6348
E-mail: tobaccoinfo@cdc.gov
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Fact Sheet
Economic Facts about U.S. Tobacco Use and Tobacco Production
(updated July 2007)
- An estimated 371 billion cigarettes were consumed in
the United States in 2006,1 and cigarettes account for more
than 90 percent of expenditures on all tobacco products in this country.2
Total United States expenditures on tobacco were estimated to be $88.8
billion in 2005,2 of which $82 billion were spent on cigarettes.2
- Five cigarette companies accounted for more than 90%
of all sales in the United States in 2005.3 They were Altria
Group Inc. [Philip Morris USA] (49.2%), Reynolds American Inc. (27.8%),
Lorillard (9.7%), Commonwealth Brands (3.7%), and Liggett (2.4%).3
- Total reported company revenue for the five largest
cigarette companies were as follows: Altria Group Inc. (parent company
of Philip Morris USA), $10.4 billion [2005]; Reynolds American Inc.,
$1.2 billion [2006]; Loews Corporation (parent company of Carolina Group
which owns Lorillard), $2.49 billion [2006]; Houchens Industries (parent
company of Commonwealth Brands), $2.36 billion [2005]; and Vector Group
Ltd. (parent company of Liggett), $52.4 million [2005].4
Altria Group Inc. was ranked 20th, Loews 145th, and Reynolds American
Inc. 280th, on the Fortune 500 list of the largest corporations in the
United States in 2006.4
- In 2005, cigarette companies spent $13.11 billion on
advertising and promotion, down from $15.12 billion in 2003,5
but nearly double what was spent in 1998.5 This amounted
to more than $36 million per day,5 more than $45 for every
person in the United States,5,6 and more than $290 for each
U.S. adult smoker.5, 7
- Tobacco is grown in 21 states.8 The largest
tobacco producing states are Kentucky and North Carolina, accounting
for two-thirds of tobacco grown in the United States.8 The
number of tobacco-growing farms declined from 512,000 in 1954 to approximately
57,000 in 2002.9
- United States Tobacco, Conwood, and Swedish Match are
the largest smokeless tobacco companies in the United States, accounting
for nearly 90% of total sales.10 Altadis USA and Swisher
International Inc. are the largest cigar companies, accounting for about
60% of total United States sales of large cigars, cigarillos, and little
cigars.11
- Consumers in the United States spend about $2.61billion
on smokeless tobacco products12 and more than $1 billion
on cigars each year.11
Economic Costs and Years of Potential
Life Lost Associated with Cigarette Smoking
- For 1997–2001, cigarette smoking was estimated to be responsible for $167 billion in annual health-related economic losses in the United States ($75 billion in direct medical costs, and $92 billion in lost productivity),13 or about $3,561 per adult smoker.14,15,16
- The total economic costs associated with cigarette
smoking are estimated at $7.18 per pack of cigarettes sold in the United
States.17
- Cigarette smoking results in 5.5 million years of potential
life lost in the United States annually.13
Cigarette Pricing, Excise Taxes, and
the Effect of Increased Cigarette Prices
- As of 2006, the average retail price of a pack of cigarettes
in the United States was $4.26, but ranges widely across states.18
- The federal excise tax is 39 cents per pack of cigarettes.1
The median state cigarette excise tax rate, as of January 1, 2007, was
80 cents, but varied from 7 cents in South Carolina to $2.58 in New
Jersey.19
- Increases in cigarette prices lead to significant reductions
in cigarette smoking.20 A 10 percent increase in price has
been estimated to reduce overall cigarette consumption by about 3 to
5 percent.20 Increases in cigarette prices can lead to significant
reductions in smoking prevalence by increasing cessation among smokers
and reducing smoking initiation among potential young smokers.20
References
- Tobacco Outlook.
Harvest Intentions for 2007-Crop Tobacco Advance 2 Percent..(PDF–278KB)
Market and Trade Economics Division, Economic Research Service, U.S.
Department of Agriculture, April 2007, TBS—262 [cited 2007 Apr 26].
Available from: http://usda.mannlib.cornell.edu/usda/ers/TBS//2000s/2007/TBS-04-24-2007.pdf.
- Capehart, Tom.
Expenditures for Tobacco Products and
Disposable Personal Income, 1989–2005.
Compiled from reports of the Department of Commerce, Bureau of Economic
Analysis. [cited 2007 Mar 13]. Available from: http://www.ers.usda.gov/Briefing/Archive/Tobacco/.
- Maxwell JC.
The Maxwell Report. Year End & Fourth Quarter
2006 Sales Estimates for the Cigarette Industry. Richmond, VA:
John C. Maxwell, Jr., 2007 [cited 2007 Mar 13].
- Hoover's Online. Cigarettes,
Cigars, and Smokeless Tobacco Products. [cited 2007 Mar 13].
Available from: http://www.hoovers.com/cigarettes,-cigars,-&-smokeless-tobacco-products/--HICID__1204--/free-ind-factsheet.xhtml.
- Federal Trade Commission.
Cigarette Report for 2004 and 2005.(PDF–880KB)
Washington, DC: Federal Trade Commission; 2005 [cited 2007 Apr 26].
Available from: http://www.ftc.gov/reports/tobacco/2007cigarette2004-2005.pdf.
- U.S. Census Bureau.
2005 American Community Survey. [cited 2007 Mar 13]. Available
from: http://factfinder.census.gov/servlet/ADPTable?_bm=y&-geo_id=01000US&-ds_name=ACS_2005_EST_G00_&-_lang=en&-_caller=geoselect&-format=.
- Centers for Disease Control and Prevention.
Tobacco
Use Among Adults—United States, 2005.
Morbidity and Mortality Weekly Report [serial
online]. 2006;55(42):1145–1148 [cited 2007 Mar 13]. Available
from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5542a1.htm.
- United States Department of Agriculture.
Briefing
Room: Tobacco—Background. Washington, DC: United States Department
of Agriculture, Economic Research Service; 2005 [cited 2007 Mar 13].
Available from: http://www.ers.usda.gov/Briefing/Archive/Tobacco/.
- Capehart T.
Trends in U.S. Tobacco Farming. (PDF–825KB)(Outlook
Report No. TBS25702). Washington, DC: United States Department of Agriculture,
Economic Research Service; 2004 [cited 2007 Mar 13]. Available from:
http://www.ers.usda.gov/publications/tbs/nov04/tbs25702/tbs25702.pdf.
- Maxwell JC.
The Maxwell Report: The Smokeless Tobacco Industry
in 2005. Richmond, VA: John C. Maxwell, Jr.; 2006 [cited 2007
Mar 13].
- Maxwell JC.
The Maxwell Report: Cigar Industry in 2005.
Richmond, VA: John C. Maxwell, Jr.; 2006 [cited 2007 Mar 13].
- Federal Trade Commission.
Smokeless Tobacco Report for the Years 2002 and 2005.(PDF–619KB)
Washington, DC: Federal Trade Commission; 2007 [cited 2007 Apr 26].
Available from: http://www.ftc.gov/reports/tobacco/02-05smokeless0623105.pdf.
- Centers for Disease Control and Prevention.
Annual
Smoking-Attributable Mortality, Years of Potential Life Lost, and Productivity
Losses—United States, 1997–2001. Morbidity
and Mortality Weekly Report [serial online]. 2005;54:625-628
[cited 2007 Mar 13]. Available from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5425a1.htm.
- Centers for Disease Control and Prevention.
Cigarette Smoking Among Adults—United States, 1998. Morbidity and Mortality Weekly Report [serial online]. 2000; 49(39);882-4 [cited 2007 Jul 6]. Available from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm4939a1.htm.
- Centers for Disease Control and Prevention.
Number of Adults Who Were Current, Former, or Never Smokers,
Overall and by Sex, Race, Hispanic origin, Age, and Education: National Health Interview Surveys—United
States, 1965–2006 [chart online]. Atlanta, GA: Centers for Disease Control and Prevention, Office on Smoking and Health; [updated 2007 Feb 28; cited 2007 Jul 6]. Available from: http://www.cdc.gov/tobacco/data_statistics/tables/adult/table_3.htm.
- Centers for Disease Control and Prevention.
Cigarette Smoking Among Adults—United States, 2000. Morbidity and Mortality Weekly Report [serial online]. 2003; 51(29);642-645 [cited 2007 Jul 6]. Available from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5129a3.htm.
- Centers for Disease Control and Prevention.
Annual Smoking–Attributable Mortality, Years of Potential Life Lost, and Economic Costs—United States, 1995–1999. Morbidity and Mortality Weekly Report [serial online]. 2002;51:300–303 [cited 2007 Mar 13]. Available from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5114a2.htm.
- The Tax Burden on Tobacco. Historical Compilation, Volume 39, 2004. Arlington, VA: Orzechowski and Walker; 2004 [cited 2007 Mar 13].
- Federation of Tax Administrators.
State Excise Tax Rates on Cigarettes, January 1, 2007. Washington, DC: Federation of Tax Administrators; 2007 [cited 2007 Mar 13]. Available from: http://www.taxadmin.org/fta/rate/cigarett.html.
- Centers for Disease Control and Prevention.
Reducing
Tobacco Use: A Report of the Surgeon General. Atlanta, GA:
Centers for Disease Control and Prevention; 2000 [cited 2007 Mar 13]. Available from: http://www.cdc.gov/tobacco/data_statistics/sgr/sgr_2000/index.htm.
Note: Economic data are based on publicly available
data. Web addresses for all references were valid as of July 2007.
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.
Page last reviewed 07/09/2007
Page last modified 07/09/2007