The five biggest tobacco companies spent US$ 15.2 billion on US advertising and promotion of cigarettes in 2003, an increase of more than 20 per cent from a year earlier and the highest figure ever reported to the Federal Trade Commission (FTC).

A report issued by the Washington regulator said the five tobacco groups nevertheless sold 19.8 billion fewer cigarettes in 2003 – a 5 per cent decline in sales – in spite of the advertising and marketing push. Cigarette manufacturers in 2003 spent US$ 72.9 million on advertising intended to reduce smoking directed at the young or their parents, a decline of 1.8 per cent from the previous year. Tobacco companies dramatically cut back advertising spending in newspapers, to US$ 8.3 million in 2003 from US$ 25.5 million in 2002. Most spending was devoted to magazines, which received US$ 156.4 million in 2003 – a 46 per cent increase from the year before. The annual report also shows tobacco companies have more than doubled their marketing campaigns since 1998, the year the industry reached a landmark US$ 206 billion settlement with US states. The report is based on information released to the FTC by Altria, the parent of Philip Morris, Reynolds American, Houchens Industries, parent of Commonwealth Brands, and other companies The FTC said discounts paid to retailers and wholesalers to cut the price of cigarettes represented the biggest expenditure, accounting for nearly US$ 11 billion in spending in 2003. The next largest spending categories were promotions involving free cigarettes and coupons. (ft)