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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
- An estimated 371 billion cigarettes were consumed in
the United States in 2006,1 and cigarettes account for approximately
91% of expenditures on all tobacco products in this country.2
Total United States expenditures on tobacco were estimated to be $88.7
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 2006.3 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
- In 2005, consumers in the United States spend $2.61 billion on smokeless tobacco
products,12 and more than $1 billion on cigars each year.11
Economic Costs and Years of Potential
Life Lost Associated with Cigarette Smoking
- During 2000–2004, cigarette smoking was estimated to be responsible for
$193 billion in annual health-related economic losses in the United States ($96 billion in
direct medical costs and approximately $97 billion in lost productivity).13
- The total economic costs (direct medical costs and lost productivity) associated
with cigarette smoking are estimated at $10.47 per pack of cigarettes sold in the United States.14
- Cigarette smoking results in 5.1 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 2007, the average retail price of a pack of cigarettes in the United States
was $4.20, but prices vary widely across states.15
- The federal excise tax is 39 cents per pack of cigarettes.1 The median state cigarette
excise tax rate, as of January 1, 2008, was $1, but varied from 7 cents in South Carolina to $2.58 in
New Jersey.16
- Increases in cigarette prices lead to significant reductions in cigarette smoking.17,18
A 10-percent increase in price has been estimated to reduce overall cigarette consumption among adolescents
and young adults by about 4%.17 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.17
References
- Capehart T. Tobacco Outlook.
Harvest Intentions for 2007-Crop Tobacco Advance 2 Percent.
(PDF–278 KB).
Market and Trade Economics Division, Economic Research Service, U.S.
Department of Agriculture, April 2007, TBS—262 [accessed 2008 Nov 24].
- U.S. Department of Agriculture.
Table 21: Expenditures for Tobacco Products and Disposable Personal Income, 1989–2006
(PDF–7 KB) [accessed 2009 Mar 17].
Compiled from reports of the Department of Commerce, Bureau of Economic Analysis.
- Maxwell JC. The Maxwell Report. Year End & Fourth Quarter 2006 Sales Estimates
for the Cigarette Industry. Richmond, VA: John C. Maxwell, Jr., 2007.
- Hoover's Online.
Cigarettes, Cigars, and Smokeless Tobacco Products
[accessed 2008 Nov 24].
- Federal Trade Commission.
Cigarette Report for 2004 and 2005
(PDF–882 KB).
Washington, DC: Federal Trade Commission; 2007 [accessed 2008 Nov 24].
- U.S. Census Bureau.
2005 American Community Survey [accessed 2008 Nov 24].
- Centers for Disease Control and Prevention.
Tobacco Use Among Adults—United States, 2005.
Morbidity and Mortality Weekly Report 2006;55(42):1145–1148 [accessed 2008 Dec 04].
- U.S. Department of Agriculture.
Briefing Room: Tobacco—Background. Washington, DC: U.S. Department of Agriculture, Economic
Research Service; 2005 [accessed 2008 Nov 24].
- Capehart T.
Trends in U.S. Tobacco Farming.
(PDF–824 KB)
(Outlook Report No. TBS-257-02). Washington, DC: United States Department of Agriculture, Economic Research
Service; 2004 [accessed 2008 Nov 24].
- Maxwell JC. The Maxwell Report: The Smokeless Tobacco Industry in 2005.
Richmond, VA: John C. Maxwell, Jr.; 2006.
- Maxwell JC. The Maxwell Report: Cigar Industry in 2005. Richmond,
VA: John C. Maxwell, Jr.; 2006.
- Federal Trade Commission.
Smokeless Tobacco Report for the Years 2002–2005.
(PDF–619 KB)
Washington, DC: Federal Trade Commission; 2007[accessed 2008 Nov 24].
- Centers for Disease Control and Prevention.
Smoking-Attributable Mortality, Years of Potential Life Lost, and Productivity Losses—United States, 2000–2004.
Morbidity and Mortality Weekly Report. 2008;57(45):1226–1228 [accessed 2008 Nov 24].
- Centers for Disease Control and Prevention.
Sustaining State Programs for Tobacco Control: Data Highlights 2006
(PDF–1363 KB). 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; 2006 [accessed 2008 Nov 24].
- The Tax Burden on Tobacco.
Historical Compilation, Volume 42, 2007. Arlington, VA: Orzechowski and Walker; 2007.
- Federation of Tax Administrators.
State Excise Tax Rates on Cigarettes, January 1, 2007
.
Washington, DC: Federation of Tax Administrators; 2007 [accessed 2008 Nov 24].
- U.S. Department of Health and Human Services.
Reducing Tobacco Use: A Report of the Surgeon General. Atlanta: U.S. Department of Health and Human
Services, Centers for Disease Control and Prevention; 2000 [accessed 2008 Nov 24].
- Task Force on Community Preventive Services.
Tobacco
(PDF–363 KB)
(Chapter 1). In: Zaza S, Briss PA, Harris KW, editors. The Guide to Community Preventive
Services: What Works to Promote Health? New York: Oxford University Press; 2005:3–79 [accessed 2008 Dec 30].
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 04/10/2009
Page last modified 04/10/2009