Trends in tobacco product prices and price-promotions at the market-area and state levels

Background. The price of tobacco products has an inverse impact on tobacco use initiation and consumption. A primary tobacco control strategy, therefore, is to raise tobacco prices through excise tax increases. Tobacco companies, however, can use price promotions to blunt the impact of excise tax increases, and to reach selected consumers in targeted geographies. Price-reducing practices now account for the vast majority of tobacco industry marketing expenditures. To create effective policies for addressing these practices, it is essential that tobacco control programs have an understanding of current tobacco pricing and price-promotional trends. Methods. Quarterly tobacco retail price and price-promotional data were calculated for 1994-2011 using commercially available retail scanner databases covering more than 50 U.S. designated market areas (DMAs). Tobacco price and price-promotional data were also obtained from periodic statewide retail observational studies conducting in New York (2004-10), Florida (2009-10), and California (2005-08). Trend and correlational analyses were conducted on DMA- and state-level data obtained through both price measurement methods. Results. Tobacco price and price-promotions vary considerably over time, across DMAs and states, and even among DMAs within a given state where higher consistency would be expected given a common state excise tax rate. Estimates derived from scanner and observational measures are systematically different but highly correlated. Conclusions.These results demonstrate the need for ongoing surveillance of tobacco price and price-promotions that can be used to monitor industry actions, inform tobacco control policy development, and evaluate the impact of local, state, and national policy approaches to address tobacco industry pricing practices.