Sources of Cigarette Price and Sales Data in the United States

Presented byBrett R. Loomis

RTI International

Presented atNational Conference on Tobacco or Health

October 24 – 26, 2007Minneapolis, MN

RTI International is a trade name of Research Triangle Institute

3040 Cornwallis Road ■ P.O. Box 12194 ■ Research Triangle Park, NC 27709Phone 919-485-2737 E-mail loomis@rti.orgFax 919-541-6683

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Why are Cigarette Prices Important?

Higher prices are associated with…Lower per capita consumptionLower prevalence of adult smokingLower rates of youth progression to established

smoking

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Common Sources of Cigarette Price Data

Tax Burden on Tobacco

Scanner data from ACNielsen or IRI

Self reported data from surveysNSDUHState ATS

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The Tax Burden on Tobacco

Annual, state-level data beginning in 1954 for most states

Weighted average price with and without “generic” brands included in the computation

Methods not published, but we do know… Price data collected from retailers via mail survey Includes grocery stores, convenience stores, mass 10-15 percent response rate; supplemented with telephone

interviews Over sample in states that historically have low response

rates Weighted according to market share of channel

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TBOT Cigarette Prices

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004

Year

Avera

ge R

eal

Pri

ce P

er

Pack (

$ 2

006)

US CA KY NY NC

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Advantages and Disadvantages of TBOT Data

Advantages Free State level data Long time history for most states Most commonly cited source for cigarette prices

Disadvantages Unknown methodology Low resolution Could be discontinued or restricted at any time Funded by cigarette manufacturers (Lorillard, Philip Morris,

RJ Reynolds)

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ACNielsen ScanTrack

Price, quantity, and promotions at the UPC, brand, and category levels

UPC level data offers greatest detail Brand name Sub-brand or type Filter Menthol Length in mm Packaging (box, soft pack) Pack count and promotion Cigarette count UPC

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ScanTrack Example:Supermarkets, Total US, 2006

UPC Level MB 1 ME F LT 85 BX 3P 2/1 20CT 2,296,469 units, average price of $8.23, total sales of

$18,888,794 (0.3 share) Brand Level

Marlboro 332,227,884 units, average price of $6.17, total sales of

$2,050,261,177 (42.8 share) Category Level

Cigarettes 775,427,767 units, average price of $6.31, total sales of

$4,898,942,581 (100 share)

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ACNielsen ScanTrack Channels and Categories

Channels: Supermarkets Mass Merchandisers (ex. WalMart) Drug Convenience

Categories Cigarettes Smokeless Tobacco Anti-Smoking (NRT) Cigar Smoking Tobacco (pipe tobacco, roll-your-own)

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ScanTrack Geographic Coverage

52 Market areas defined by ACNielsen, cover 74% of the US population

Markets are collections of counties centered on a metropolitan area

Do not correspond to MSA or any other convenient demarcation

Mean number of counties/market = 30 (1 – 79)

Mean number of people/market = 4.2m (1.0m – 19.4m)

33/52 markets cross state borders

Mean percent of market population in 1 state = 82.5%

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ACNielsen Markets – US

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Comparison of National Prices

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Pri

ce

pe

r P

ac

k

ACNielsen Tax Burden on Tobacco

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ACNielsen Markets - California

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Average Cigarette Prices - CA

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

1994 1996 1998 2000 2002 2004 2006

Year

TBOT - CA ACN - Total US ACN - LA

ACN - SAC ACN - SD ACN - SF

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Promoted Cigarette Sales in California

0%

1%

2%

3%

4%

5%

6%

7%

1994 1996 1998 2000 2002 2004 2006

Year

Los Angeles Sacramento San Diego

San Francisco Total US

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Market Share of Premium Cigarettes in California

60%

65%

70%

75%

80%

85%

90%

95%

100%

1994 1996 1998 2000 2002 2004 2006

Year

Los Angeles Sacramento

San Diego San Francisco

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Market Share of Full-Flavor Cigarettes in California

30%

35%

40%

45%

50%

55%

60%

1994 1996 1998 2000 2002 2004 2006

Year

Los Angeles Sacramento

San Diego San Francisco

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Advantages and Disadvantages of Scanner Data

Advantages A high level of detail Timely ACNielsen and IRI are flexible and will work with you

Disadvantages Expensive Difficult to work with Geographic coverage not good for many states/Channels At most 5 years of back data

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Conclusions

There is no perfect measure of cigarette prices

Choose the measure that meets your needsState overview – TBOT and/or SurveyDetailed sales characteristics – ScannerMatched to individual smokers – Survey