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Little Cigar Consumption on the Rise, While Cigarette Use Declines
Date:2/4/2009

SCHIP Law Will Tax Little Cigars at Cigarette Equivalent for First Time

WASHINGTON, Feb. 4 /PRNewswire-USNewswire/ -- New data from the Maxwell Report indicates a dramatic increase in the use of cigarillos and little cigars over the past decade, a troubling trend given the popularity of these products with young adults (ages 18-25) and the African American community. According to the data, over a 10-year period from 1997-2007, little cigar consumption increased 240 percent, while cigarillos increased by almost 150 percent. Meanwhile, cigarette consumption has declined by about 25 percent over the same 10 year period.

"These numbers are extremely concerning. Little cigars and cigarillos are obviously a serious public health threat and there is evidence that they are popular among young adults and minorities," said Dr. Cheryl G. Healton, President and CEO of American Legacy Foundation. "While much effort has been focused over the past decade on increasing awareness about cigarettes and the dangers of smoking, cigar products have emerged as a profitable product while remaining taxed at a much lower rate and consumers are taking the bait," she added. Low prices, candy flavors, marketing promoting affluence and hip hop culture as well as the fact that these products can be sold individually as "loosies" may be factors that make little cigars so popular among youth and young adults. Healton points out that today's announcement of a federal tax increase on these emerging products may help to curb the consumption.

Under the newly signed State Children's Health Insurance Plan law (SCHIP) signed by President Obama [today], taxes will increase not only on cigarettes - a major victory for public health advocates - but on cigar products as well. Little cigars will now be taxed at $1.01 per pack, and cigarillos and large cigars will have an increase from $.05 to $.40.

"For years there has been an established correlation between increased taxes on tobacco and a decrease in consumption rates. This is especially true among price-sensitive youth and young adults," Healton said. "The signing of SCHIP into law is indeed a momentous victory for the public health community on several fronts."

Little Cigars

Little cigars - which look like cigarettes but are wrapped in tobacco leaf - were once an almost invisible product and have grown exponentially in popularity.

In May of 2006, attorneys general around the country filed a petition with the U.S. Department of Treasury's Alcohol Tobacco Tax and Trade Bureau (TTB) to ask the federal agency to close a loophole allowing tobacco manufacturers to pass off their cigarettes in brown wrappers as "little cigars." Under these rules, the tobacco companies were able to classify their own products in a way that defeats public health and marketing restrictions that would otherwise apply to cigarettes. Some suggest that with the current economic crisis, even the most loyal traditional cigarette smoker may begin to use little cigars or cigarillos to save money.

Cigarillos

Cigarillos are longer, slimmer versions of a large cigar and are currently available in a variety of flavors, including apple, cream and wine, which may be more appealing to youth. While sold in packs they are individually wrapped and often sold individually at a much lower cost than a pack. Additionally, many state and local laws do not have minimum pack size requirements for cigars - unlike cigarettes. Research shows cigar products' popularity and sales are rising, particularly with young adults and in urban communities of color.

Respectively, the two major manufacturers of these products are Philip Morris and RJ Reynolds, which have both acquired the best-selling companies, Middleton's "Black & Mild" and "Swisher Sweets." Black & Mild is among the most popular cigar brand for young adults today.

This issue holds great significance in the U.S. as Black History Month is observed throughout the month of February and the contributions of the nation's African American leaders is celebrated.

The American Legacy Foundation, the national non-profit organization dedicated to building a world where young people reject tobacco and anyone can quit, and that created the truth youth smoking prevention campaign, has been working with the National Association of Attorneys General and John Hopkins University to monitor and bring attention to the rising health risks associated with little cigar consumption.

The American Legacy Foundation(R) is dedicated to building a world where young people reject tobacco and anyone can quit. Located in Washington, D.C., the foundation develops programs that address the health effects of tobacco use, especially among vulnerable populations disproportionately affected by the toll of tobacco, through grants, technical assistance and training, partnerships, youth activism, and counter-marketing and grassroots marketing campaigns. The foundation's programs include truth(R), a national youth smoking prevention campaign that has been cited as contributing to significant declines in youth smoking; EX(R), an innovative public health program designed to speak to smokers in their own language and change the way they approach quitting; research initiatives exploring the causes, consequences and approaches to reducing tobacco use; and a nationally-renowned program of outreach to priority populations. The American Legacy Foundation was created as a result of the November 1998 Master Settlement Agreement (MSA) reached between attorneys general from 46 states, five U.S. territories and the tobacco industry. Visit www.americanlegacy.org.


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SOURCE American Legacy Foundation
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