Big Tobacco's 'Other' Products Catch Fire
Also on the rise is the 'cool quotient' of mini cigars, which are not subject to the same level of legal scrutiny as cigarettes.
Just because cigarette sales have been steadily falling in recent years doesn't mean the tobacco industry is going up in smoke.
Two years ago, R.J. Reynolds purchased moist snuff manufacturer Conwood. Philip Morris in the past two years has also begun testing snuff and spit-free snus in Dallas and Indianapolis.
Meanwhile, the popularity of mini cigars is exploding among young people, especially in the hip-hop world. In the last eight years, their sales have mushroomed by more than 100 percent, according to the study.
The most popular brand of mini cigar in the hip-hop culture is Black and Mild, a name taken up by several small-time rappers and DJs. In December, Philip Morris purchased the brand from John Viet Middleton Inc.
Researchers attribute the growing demand for the other products partly to the fact that the federal and state governments and the courts don't seem to apply the same level of scrutiny to them as they do cigarettes.
In what the researchers call a "loophole for death," the other products are cheaper due to lower taxes. The federal tax on cigarettes is at least 10 times higher than that for snuff, snus, roll-your-owns and cigars, according to the study.
Also, the leading producer of anti-smoking ads — the American Legacy Foundation — is prohibited by court order from targeting any type of tobacco product other than cigarettes.
The foundation's hands are tied by the terms of a landmark settlement in 1998 between the tobacco industry and 46 states called the Master Settlement Agreement. Part of the $206 billion settlement required the tobacco companies to fund anti-tobacco ads, but the focus was on cigarettes because they were the product being marketed to minors at the time, said Najma Roberts, communications manager for the foundation.
Now, she said, the foundation is stepping up its research of mini cigars to determine whether they should ask the federal government to allow them to train their crosshairs on that tobacco product as well.
"They are big in the urban community, specifically among Hispanics and African Americans," Roberts told Miller-McCune.com. "There's definitely a misconception that they are not as bad as cigarettes."
Meanwhile, Congress is moving ahead on giving the U.S. Food and Drug Administration the power to regulate tobacco products with a bill that in part would outlaw sweet- and spice-flavored cigarettes. Specifically omitted from that ban on "any artificial or natural flavor" is menthol, a flavor especially popular among African-American smokers. The Congressional Black Caucus has protested the exclusion.
In the eight-year Harvard study, which was published in the June 11 edition of the Journal of the American Medical Association, the researchers concluded that the growing demand for the other products has offset by one-third the 18 percent drop in the sale of cigarettes since 2000.
Put another way, even though the sale of cigarettes has fallen by 18 percent in eight years, the sale of all tobacco products in that time has decreased by only 12 percent due to the rising consumption of cigars, snuff, snus and roll-your-owns.
"The apparent magnitude of overall decline in tobacco use in the U.S. may be illusory," the authors of the study said in a statement.
Associate researcher Hillel Alpert, one of the study's two authors, told Miller-McCune.com that he is worried about what seems to be a widespread belief that cigars and the other alternative tobacco products are somehow healthier than cigarettes.
"If somebody were to jump out of a tall building, it doesn't matter whether they jump from the 10th story or the 20th story — it leads to the same result," he said.
In the study — the first of its kind in the U.S. — the researchers attributed the growing demand of the other tobacco products largely to their lower prices. Ever since the 1998 Master Settlement Agreement, the largest civil settlement in American history, cigarettes have been heavily taxed but not the other tobacco products.
The researchers urge the federal and state governments to tax the other products equally.
"Lower federal and state taxes on these non-cigarette products are keeping tobacco addiction affordable and encouraging preventable disease and death," professor Greg Connolly, the study's lead researcher and the director of Harvard's Tobacco Control Research and Training Program, said in a statement. "State campaigns to curb tobacco use should address this loophole for death."
Meanwhile, the American Legacy Foundation isn't the only tobacco watchdog that would like to take aim at mini cigars.
Similarly hamstrung is the National Association of Attorneys General, which, although it is allowed to go after tobacco companies for using inappropriate marketing tactics to sell cigarettes, roll-your-owns and smokeless products, is prohibited from going to court over the portrayal of small cigars such as Black and Mild. The association has argued that the "cigars" are erally just cigarettes in disguise.
Because such products are wrapped in tobacco leaf, rather than paper, they fall under the category of cigar and are thus exempt from many restrictions that apply to cigarettes, according to a study from the Baltimore City Health Department. But the study also says that the mini cigars, unlike regular cigars, tend to be inhaled.
Like the American Legacy Foundation, the Association of Attorneys General is trying to change the rules pertaining to mini cigars. It has requested that the federal government broaden its definition of cigarettes to include them but, so far, to no avail, said an attorney with the association who asked that his name not be used because he is not authorized to speak to the press.
Meanwhile, mini cigars are the fastest-growing tobacco product on the market.
In 2000, Americans bought enough cigars to equal 112 million packs of cigarettes. By 2007, that number had jumped to 242 million.
Cigarettes are still by far the biggest seller. In 2007, Americans purchased 17.4 billion packs. The next most prevalent form of tobacco consumption is moist snuff, which in 2007 sold the equivalent of 2.9 billion packs of cigarettes — a 30 percent increase over the amount sold in 2000. The consumption of roll-your-own cigarettes has also sharply risen, jumping in that time frame from the equivalent of 281 million packs to 537 million.
The amount of money the tobacco industry spends on marketing has also increased in the past decade. Between 1996 and 2005, the amount spent on smokeless tobacco ads more than doubled, from $121 million to $251 million, according to a report from Tobacco Free Kids. The amount spent on cigarette ads rose in tandem, from $5.1 billion to $13.1 billion, according to the organization.
The meteoric ad budget seems a little counterintuitive, given how the 1998 settlement banned cigarette ads on billboards and how cigarette ads seldom make appearances in newspapers or magazines anymore. Now the ads show up in the form of in-store promotions, coupons and direct mail.
Speaking on behalf of Philip Morris, Greg Mathe, spokesman for parent company Altria, made no bones about the fact that the industry is trying to grow and make money. But he said the tobacco company knows better than to try to target minors.
"We have an adult-only focus," he said.
What's more, he said, the company does not try to pitch any of its products as somehow healthier than others.
"There is no such thing as a safe cigarette," said Mathe, who, when asked, said that he does not use tobacco products. "Tobacco products are harmful. They cause serious diseases and they are addictive."
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