Sources of Cigarette Price and Sales Data in the United States Presented by Brett R. Loomis RTI International Presented at National Conference on Tobacco or Health October 24 – 26, 2007 Minneapolis, MN RTI International is a trade name of Research Triangle Institute 3040 Cornwallis Road ■ P.O. Box ■ Research Triangle Park, NC Phone

2 Why are Cigarette Prices Important? Higher prices are associated with… Lower per capita consumption Lower prevalence of adult smoking Lower rates of youth progression to established smoking

3 Common Sources of Cigarette Price Data Tax Burden on Tobacco Scanner data from ACNielsen or IRI Self reported data from surveys NSDUH State ATS

4 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 percent response rate; supplemented with telephone interviews Over sample in states that historically have low response rates Weighted according to market share of channel

5 TBOT Cigarette Prices

6 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)

7 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

8 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)

9 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)

10 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%

11 ACNielsen Markets – US

12 Comparison of National Prices

13 ACNielsen Markets - California

14 Average Cigarette Prices - CA

15 Promoted Cigarette Sales in California

16 Market Share of Premium Cigarettes in California

17 Market Share of Full-Flavor Cigarettes in California

18 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

19 Conclusions There is no perfect measure of cigarette prices Choose the measure that meets your needs State overview – TBOT and/or Survey Detailed sales characteristics – Scanner Matched to individual smokers – Survey