For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: March 8, 2006

Cigarette Sales In The U.S. Reach Historic 55-Year Low

(Washington, D.C.) - Attorney General Lawrence Wasden announced today a historic drop in the number of cigarettes sold in the United States last year. According to figures compiled by the Tobacco Tax Bureau of the United States Department of the Treasury, cigarette sales in 2005 declined by 4.2% from 2004 levels, marking the largest one-year percentage decrease in cigarette sales since 1999.

Wasden, co-chair of the National Association of Attorneys General Tobacco Committee, made the announcement at a news conference this morning in Washington, D.C.

The 2005 sales figures continue the unprecedented long-term decline in cigarette smoking that began with the settlement of lawsuits brought by state attorneys general against the major tobacco companies. Cigarette sales in the United States have fallen by more than 21% since the state attorneys general negotiated the landmark 1998 tobacco Master Settlement Agreement (MSA), which imposed public health restrictions on the advertising, promotion and marketing of cigarettes by tobacco companies.

The 378 billion cigarettes sold in the United States in 2005 represented the lowest number of cigarettes sold in the United States since 1951. This decline is even more impressive because the United States population has more than doubled since that time.

“The continuing long-term decline shows that the MSA and the other tobacco state settlement agreements have made a difference,” Attorney General Wasden said. “The decline in 2005 was one of the largest single-year declines in history and is evidence that the long-term downward trend is continuing. In the years immediately prior to the states’ settlement agreement, cigarette sales in the United States had reached a plateau. By contrast, the eight-year, 21% decline in cigarette sales since the MSA is unprecedented.”

The MSA created a broad array of restrictions on the advertising, marketing and promotion of cigarettes. It prohibited targeting youth with cigarette advertising. It also prohibited outdoor advertising of cigarettes and advertising cigarettes in public transit facilities, the use of cigarette brand names on merchandise and a host of other restrictions. The payment provisions of the MSA were designed to compensate the states, in part, for the billions of dollars in health care costs associated with treating tobacco-related diseases under state Medicaid programs.

“The work of the attorneys general in negotiating the tobacco MSA focused attention on the conduct of the tobacco companies and the dangers of cigarette smoking,” said Iowa Attorney General Tom Miller, co-chair of the National Association of Attorneys General Tobacco Committee. “The continued enforcement efforts of the MSA’s provisions by attorneys general, along with other health advocates, have made a marked difference in the number of smokers across the country, particularly among youth.”

“The states have been accused of becoming addicted to tobacco settlement money and wanting to keep cigarette sales high in order to maximize their revenues,” Miller said, “but nothing could be farther from the truth. In fact, the costs imposed on the states to treat cigarette-related diseases far exceed the revenues the states get from the settlement proceeds and taxes. The states applaud the decline in cigarette sales and have worked hard and effectively to bring this result about.”

Attorneys general have also directly addressed the issue of youth tobacco use by aggressively enforcing the settlement agreements against violations by the tobacco companies – such as Brown & Williamson’s “Kool Mixx” marketing campaign that sought to use hip-hop culture to promote cigarettes; pursuing agreements with major retailers to ensure that they do not sell tobacco products to underage persons; and suing Internet tobacco vendors who sell tobacco products without verifying the age of their purchasers. Recently, the State of Vermont sued Reynolds American Tobacco Company, alleging that advertising of its Eclipse brand was making health claims that could not be substantiated. That suit is pending.

“In addition, through the combined efforts of our public health community and the work of the American Legacy Foundation and its truth campaign, we’re seeing increased public awareness through vigorous anti-smoking campaign advertising and educational outreach,” said Idaho Attorney General Lawrence Wasden, co-chair of the NAAG Tobacco Committee and Treasurer of the American Legacy Foundation. The MSA created the American Legacy Foundation, funded by payments from the tobacco companies, to promote awareness of the health effects of tobacco.

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