WASHINGTON -- Bludgeoned by smoking restrictions and antismoking sentiment, the consumption of cigarettes in the United States is expected to fall a couple of percentage points this year, according to the Economic Research Service of the U.S. Department of Agriculture.
for the last nine years. Reduced retail prices, however, were apparently successful this year in slowing the rate of decline. "The decline stems from a growing number of prohibitions and restrictions on where people can smoke, continuing antismoking activity, such as publicity about relationships between smoking and health, and declining social acceptance of cigarette smoking," the report said. "The decline is being tempered by lower average cigarette retail prices than a year earlier."
Retail prices of tobacco products were about 5.5% lower in July 1994 than a year earlier, the report said, noting impacts from the price reduction initiated two summers ago by Philip Morris. "After reducing price sharply in August 1993, manufacturers raised price a little in November 1993. Manufacturers have not changed their prices so far in 1994," the report said.
The industry's aim to slow down the rapid gains of discount brand cigarettes paid off, according to ERS. Its research showed that the share of discount brand fell to about 33% of the market, during 1993-94, compared with 36% a year earlier.
Low-tar, low-nicotine cigarettes accounted for a slightly higher proportion of consumption than the year before, ERS said.
Seven states and the District of Columbia enacted or imposed tax hikes in 1994, that averaged about 12 cents for a pack of 20. The weighted average state tax on cigarettes was 29.1 cents in April 1994.
The ERS researchers expected consumption of some other tobacco products have taken more positive turns this year. Cigar consumption, for example, is expected to rise from last year's figure of 2.19 billion, reversing a trend that has persisted for three decades. "The average number of cigars smoked by males 18 and over in 1994 probably will be about 2% above a year earlier," the report said.
Smokeless tobacco also had a good year, according to ERS. Chewing tobacco production in 1994 is expected to have increased to 65.2 million pounds, from 64.4 in 1993, spurred by "changing consumer tastes and product advertising."