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Can You Refuse These Discounts? an Evaluation of the Use and Price Discount Impact of Price-Related Promotions Among US Adult Smokers by Cigarette Manufacturers

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Can You Refuse These Discounts? an Evaluation of the Use and Price Discount Impact of Price-Related Promotions Among US Adult Smokers by Cigarette Manufacturers Open Access Research Can you refuse these discounts? An evaluation of the use and price discount impact of price-related promotions among US adult smokers by cigarette manufacturers Ralph S Caraballo, Xu Wang, Xin Xu To cite: Caraballo RS, ABSTRACT Strengths and limitations of this study Wang X, Xu X. Can you Objectives: The raising unit price of cigarette has refuse these discounts? An been shown to be one of the most effective ways of ▪ evaluation of the use and Research has shown that increasing the unit reducing cigarette consumption and increasing rates of price discount impact of price of cigarettes is among the most effective price-related promotions successful quitting. However, researchers have shown public health interventions to reduce cigarette among US adult smokers by that price-sensitive smokers have used a variety of consumption, prevent smoking initiation and cigarette manufacturers. BMJ strategies to mitigate the effect of the rising price of increase rates of successful quitting. This is the Open 2014;4:e004685. cigarettes on their smoking habits. In particular, first national study in the USA to evaluate the doi:10.1136/bmjopen-2013- 23–34% of adult smokers in the US use cheaper uses and effects of price-related discounts 004685 brands, and 18–55% use coupons or promotions. (coupons, rebates, buy-one-get-one-free, Little is known about the discount use by type of two-for-1 or any other special promotions for ▸ Prepublication history for brands. As such, the main purpose of this analysis is the last pack of cigarettes purchased) by US cig- this paper is available online. to evaluate the uses and price discount effects of these arette manufacturers and specific cigarette To view these files please price-related discounts by manufacturers and major brands. visit the journal online brands. ▪ The US national study consisted of an analysis (http://dx.doi.org/10.1136/ Setting: An analysis based on the cross-sectional of telephone and cell phone cross-sectional data bmjopen-2013-004685). 2009–2010 National Adult Tobacco Survey (NATS). (2009–2010) of 11 766 current cigarette Received 13 December 2013 Participants: 11 766 current smokers aged 18 or smokers aged 18 or above. Revised 5 May 2014 above in the USA. ▪ The price paid for last pack of cigarettes during Accepted 6 May 2014 Primary outcome measures: Price-related the past 30 days was collected. As the purchases discount was defined as smokers who used coupons, were made recently (last pack bought in past rebates, buy-one-get-one-free, two-for-one or any 30 days and most smokers are daily smokers), other special promotions for their last cigarettes recall bias should not be a major problem in this purchase. study. Results: The use of price-related discounts and ▪ The study design is cross-sectional. Therefore, associated price impact vary widely by cigarette the study findings may be specific only to the manufacturer and brand. Approximately one of three period October 2009–June 2010. Camel, one of four Marlboro and one of eight ▪ The 2009–2010 NATS does not collect informa- Newport smokers used price-related discounts on tion for all price minimisation strategies, includ- their latest cigarette purchases. The average price ing cigarette purchases from states with lower reductions of discounts offered by Philip Morris (PM) price. or R.J. Reynolds (RJR) were around 29 cents per pack ▪ Smokers’ self-reported use of coupon or other National Center for Chronic while that of Lorillard (Newport only) was 24 cents per types of price-related discounts in the 2009– Disease Prevention and pack. Cigarette brands that provided significant per 2010 NATS only reflects direct-to-consumer dis- Health Promotion, Office on pack price reductions include: PM Marlboro (28 cents), counts from the industry. As a result, the dis- Smoking and Health, Centers RJR brand Camel (41 cents), Doral (50 cents), Kool count measure in the analysis does not include for Disease Control and tobacco industry’s promotional allowances dir- Prevention, Atlanta, Georgia, (73 cents) and Salem (80 cents), and Lorillard ectly paid to cigarette retailers or wholesalers, as USA Newport (24 cents). Conclusions: Policies that decrease price- these disaggregated promotional allowances by Correspondence to minimisation strategies will benefit public health. cigarette manufacturers or by brands have not Dr Ralph S Caraballo; been disclosed to consumers or to the public. [email protected] Caraballo RS, Wang X, Xu X. BMJ Open 2014;4:e004685. doi:10.1136/bmjopen-2013-004685 1 Open Access INTRODUCTION health stakeholders to further understand the promo- Cigarette use is the most preventable cause of death and tion strategies of leading US cigarette companies. disease in the USA and presents a significant public health burden.1 Research has shown that increasing the unit price of cigarettes is among the most effective METHODS public health interventions to reduce cigarette consump- Data source tion, prevent smoking initiation and increase rates of The 2009–2010 NATS is a stratified, national, landline 2–7 successful quitting. In addition, recent evidence shows and a cell phone survey conducted during October that the 2009 federal tobacco excise tax increases have 2009–June 2010. The survey population is a representa- been one of the strategies that have substantially tive sample of non-institutionalised adults aged 18 years reduced the number of cigarette and smokeless tobacco or older at state and national levels. The survey was users among US middle school and high school developed by the Office on Smoking and Health at the 8 students. Centers for Disease Control and Prevention and was Internal documents from cigarette companies have designed primarily to assess the prevalence of tobacco shown that they are aware of the potential impacts that use and the factors related to tobacco use among US fi price increases have on their sales and pro ts. Cigarette adults. The survey has 130 questions that provide infor- companies have developed a variety of price-reduction mation about demographics, health status, cigarette marketing efforts to promote cigarette sales, such as smoking behaviours, price minimisation behaviours, cig- 9 multipack discounts, rebates and coupons. According arette brands preference, the use of other tobacco pro- to the most recent cigarette report from the Federal ducts and attempts at quitting smoking. The 2009–2010 Trade Commission, in addition to giving away 50 million NATS completed a total of 118 581 interviews, including cigarettes for free in 2010, the major cigarette manufac- 110 634 by landline and 7947 by cell phone. As samples turers spent approximately $8.05 billion marketing their used for this analysis contain only de-identified observa- products. More than 80% of the marketing expenditures tions, this research did not involve human subjects, as (6.49 billion) went to price-related discounts and promo- defined by Title 45 Code of Federal Regulations, Part tional allowances used to reduce the retail price of 46, and institutional review board (IRB) approval was 10 cigarettes. not required. ’ These cigarette companies price-related discounts This analysis is restricted to current smokers who fi may diminish the public health bene t associated with reported the cigarette brand name that they smoked increased cigarette prices among some smokers even most often during the past 30 days (n=16 015). Current after federal law has raised the unit price of cigarettes. smokers were defined as those who reported smoking at Several recent studies have shown that a large portion of least 100 cigarettes in their lifetime and currently – US adult smokers (18 55%) have taken advantage of smoked every day or on some days (n=16 542). Among these price-related discounts offered by some cigarette them, respondents who failed to report a brand name 11–16 companies. In addition, evidence from other studies were excluded (n=523). Owing to the concern of small has shown that smokers who used these price-related dis- sample size (n=4), respondents who smoked Forsyth, counts were less likely to make quit attempts or to suc- which is a private brand label, were also excluded from 17–20 cessfully quit in the future. Although studies have the analysis. previously investigated demographics and socio- In addition, respondents who failed to provide infor- economic characteristics of smokers who used price mation on price paid for their latest purchase (n=978), minimisation strategies, including using coupons or the use of price-minimisation strategies (n=2794), demo- 11–15 other types of discounts from cigarette companies, graphic characteristics (age, race/ethnicity, gender, edu- little is known about how these price-related discounts cation, marital status or employment status; n=477) or affect the average price paid per cigarette when factor- time to first cigarette since waking up, were also fi ing in discounts offered by speci c cigarette companies excluded. The final sample size is 11 766. or when looking at specific cigarette brands. Cigarette companies may be directly influencing the prices of their products by using these types of marketing Measures of brands and companies strategies. In the survey, respondents were asked about the cigar- Using unique data from the 2009 to 2010 National ette brand that they used most often during the past Adult Tobacco Survey (NATS) about cigarette brands 30 days. A total of 17 brand choices were listed. Except and price-related discounts used by adult smokers, we Forsyth and the choice of other brands (n=3299), the evaluated the uses and price discount effects of these remaining 15 brand names are categorised as premium price-minimisation strategies by the cigarette manufac- brands or generic brands. Premium brand names turers and major brands. To the best of our knowledge, include Camel, Kool, Marlboro, Newport, Pall Mall, this is the first study to provide these estimates from a Parliament, Salem, Virginia Slims and Winston, and national representative sample of US adult smokers.
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