Point-of-Sale Tobacco Advertising and
Promotion
National Summit on Smokeless and Spit Tobacco
Madison, WI ● September 21, 2009
Agenda
1. Point-of-sale tobacco advertising and
promotion: definition and types
2. Regulation
3. Contracts
4. Promotion $$$
5. Why we care
6. Research findings
7. Policy
Point-of-Sale Advertising and
Promotion
• Point-of-sale tobacco advertising and
promotion (POS) has increasingly become
a key strategy for the tobacco industry
What is POS?
• Signage at the point-of-sale
What is POS?
• Price promotions:
– Value-added (buy-one-get-one free,
etc.)
– “Buy-downs”
Retailers sell products at discounted rate,
tobacco company cuts a check for the
amount “lost” by retailer at the end of buydown period
What is POS?
• Promotional allowances paid to retailers
– Allowances given to retailers to facilitate sales
•
•
•
•
Shelving
Stocking
Displaying merchandise
Volume rebates
Regulation
• POS is largely unregulated by the:
– Master Settlement Agreement (1998)
– Smokeless Master Settlement Agreement (1998)
• These settlements are legal agreements
between the largest tobacco companies and
Attorneys General across the country; they
restrict the type of marketing that these
companies can participate in.
Contracting
• Usually (but not always) POS is set-up
and enforced through contracts with
retailers
– Makes it difficult to work with retailers on
voluntary POS reduction policies
– Often negotiated at highest corporate level
Contracting
• In the past, POS contracts have focused
primarily on cigarette marketing.
However, higher taxes and increasing
smoke-free laws have forced the industry
to begin focusing on “OTP”- Other
Tobacco Products
Cigarette Companies Enter Smokeless Market
• RJ Reynolds acquired Conwood (Kodiak,
Grizzly)- 2006
• Altria acquired UST (Skoal, Copenhagen)2009
POS:
How much money are we
talking about?
Cigarette Promotion
• From 1998 to 2006, the U.S. cigarette advertising and
promotions budgets nearly doubled growing from $6.7
billion to $12.5 billion
– In 2006, approximately 84%, or $10.5 billion, of this
was spent advertising and promoting cigarettes at the
point-of-sale
Source: Federal Trade Commission. Federal Trade Commission Cigarette
Report for 2006. Washington, DC; 2009.
Smokeless Promotion
• From 1998 to 2006, the U.S. smokeless tobacco
advertising and promotions budgets more than doubled
growing from $145.5 million to $354.1 million
– In 2006, approximately 65%, or $230 million, of this
was spent advertising and promoting smokeless
tobacco at the point-of-sale
Source: Federal Trade Commission. Federal Trade Commission Smokeless
Tobacco Report for 2006. Washington, DC; 2009
Smokeless Promotion
Dollars Spent Advertising and Promoting Smokeless Tobacco
$400
$354
$350
Millions
$300
$251
$250
$203.7
2005
$200
2006
$150
$99.7
$100
$50
$16 $12.7
$13.7 $13.4
Promotional
allowances
Retail valueadded
$0
Total
Price discounts
paid to retailers
Why is POS Important?
• Past research has shown that POS has
been more prevalent in stores where
adolescents shop frequently
• Exposure to higher levels of POS
increases the likelihood that adolescents
will start smoking
Henriksen L, et al. Tobacco Control 2004;13(3):315-8.
Slater SJ, , et al. Archive of Pediatric Adolescent Medicine 2007;161(5):440-5.
Why is POS Important?
• Communities with disadvantaged
socioeconomic profiles tend to have the
most tobacco advertising
• Smokers of mentholated brands (typically
youth & minorities) are more likely to take
advantage of promotional offers
Laws MB, et al. Tobacco Control. 2002;11 Suppl 2:ii71-3.
Barbeau EM, et al. Preventive Medicine. 2005;40(1):16-22.
White VM, et al. American Journal of Preventive Med. 2006;30(3):225-31.
Ramsey Tobacco Coalition (RTC) Research
• Summer 2007- attempted to collect POS
data from all licensed tobacco vendors in
Ramsey County, W. St. Paul, and S. St.
Paul
– 652 licensed vendors total
– Gathered complete (interior and exterior) POS
data on 491 vendors; gathered data on just
exterior POS on 52 vendors
2007 Research Findings
• Mean number of ads per store: 14
• Median number of ads per store: 8
• Range of ads found in an individual store:
0-81
Percent of Total Ads Found by Vendor Type (n=543)
5%
4%
4%
14%
2%
0%
6%
65%
Gas/ convenience
Supermarket
Restaurants/ bars
Misc
Small grocery/ market
Tobacco shop
Liquor shop
Drug store
Smokeless Tobacco Findings
• Interior advertisements for smokeless
tobacco were found in 20% of stores
• Chain stores were more likely than nonchain stores to display ads for smokeless
tobacco
(35% vs. 8%)
Findings from 2009
ar
lb
or
o
200
192
167
70
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nh
Sw
ag
ish
en
er
Sw
ee
ts
207
Sk
oa
l
400
Do
ra
l
m
ok
el
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s
Ko
di
ak
600
O
th
er
S
641
on
800
W
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st
1017
Ba
sic
1200
Ko
ol
1400
Ca
O
th
m
er
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Total Number of Ads by Brand (n=543)
1332
1000
1012
604
116
67
60
37
0
Most Advertised Brands in Study Area
• Marlboro, Camel, Newport
• These three brands are also the most
commonly preferred brands among youth
aged 12-17; 81% of smokers in this age
group report preferring one of these
brands
Source: Centers for Disease Control, 2009
Stores in block groups with a larger
proportion of the population that was
African American or living below the
poverty line were more likely to have more
tobacco ads (p< 0.01).
Research to Action
Policy Options
• How other states are taking action
– Reduce Remove (CA): Voluntary removal of tobacco advertisements
– Media literacy (NY): Educate public about POS effect on young people
– Petition for legislature to pass a resolution to reduce tobacco ads in
stores (NY)
– Tobacco ad teardown: Youth ask stores to remover advertising in
exchange for youth clean up store/grounds (WY)
– Legislature banning advertisements in pharmacies (San Francisco and
Boston)
Before
After
Policy Options
•
•
•
•
•
Enforcement of sign code
Enforcement of vending machine laws
Imitation tobacco ordinance
Prohibit sale of “loosies”
License fees
Policy Based
Youth Programming
Ramsey Tobacco Coalition work on imitation
tobacco products ordinance
– Grew out of POS assessment
Policy Example


Youth met with key decision makers in St. Paul, shared findings
and asked for change
Introduction and passage of a St. Paul ordinance banning
imitation tobacco products aimed at kids, recommended by
World Health Organization.
Policy Options
• http://link.brightcove.com/services/player/b
cpid1870915446?bctid=18332839001
FDA Regulation
• FDA Regulation of advertising– wait and
see what happens here
– Starting in Sept 2012, regulates
point-of-sale tobacco advertising
(tombstone)
– Allows states and local governments to
regulate promotional activities (coupons,
value-added, buy-downs, etc.)
FDA Regulation Highlights
• Requires larger more visible, and more informative health warning
labels, including color graphics
• Local and Federal government can restricts the advertising at the local
level as long as it is related to TIME,PLACE and MANNER
• Bans outdoor advertising 1,000 feet from schools and playgrounds
• Limits ads to black and white visuals
• Bans brand sponsorship of sports and entertainment events
• “Light”, “ Low” and “Mild” descriptors removed
Cigarette pack now
Cigarette pack under
FDA Regulation
Front
WARNING
LABEL
Front
WARNING
LABEL
Back
Back
…Educate…Advocate
Start Noticing
• Betsy Brock, MPH
Director of Research
bb@ansrmn.org or 651.646.3005
• Katie Engman, CHES
Tobacco Programs Manager
tobaccoke@yahoo.com or 651.646.3005