Cigarette sales fall to 55-year low in U.S.

U.S. cigarette sales fell to a 55-year low last year after tobacco companies agreed to restrict advertising in a 1998 health-care settlement, a group of U.S. attorneys general, including Utah's Mark Shurtleff, announced Wednesday.

Cigarette sales have declined by more than 21 percent since the agreement with producers including Philip Morris USA, Iowa Attorney General Tom Miller said at a press conference in Washington with Shurtleff and the top legal officials for California and Idaho, Bill Lockyear and Lawrence Wasden.

The drop accelerated after cigarette makers stopped billboard and sporting-event advertising, Wasden said. A reduction in youth smoking contributed to last year's drop to 378 billion cigarettes sold, he said. The settlement also called for companies to pay states an estimated $206 billion over 25 years.

"We have made enormous progress in dealing with tobacco use in America," Miller said. "There's obviously a lot to go."

The accord was signed by companies including R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co. and called for them to make payments to 46 states in perpetuity. Mississippi, Florida, Minnesota and Texas had already settled their claims for about $40 billion.

The tobacco makers agreed to restrict advertising and marketing, including a ban on billboards, buses, taxicabs and merchandise logos. They're also paying for anti-tobacco ads by the American Legacy Foundation, which runs programs to reduce teen smoking.

Cigarette price increases by major producers including Philip Morris USA, the maker of top-selling Marlboro, to cover the settlement costs contributed to declining consumption, Matthew Myers, president of Washington-based Campaign for Tobacco-Free Kids, said Wednesday in a statement.

Higher taxes by state and local governments including New York City also pushed up cigarette prices, Myers said. The average retail price of Marlboro was $3.36 a pack in January, 31 cents higher than in January 2003, according to Prudential Equity Group LLC analyst Robert Campagnino in New York.

Smoking restrictions in the workplace, restaurants and bars have reduced cigarette consumption that, on a per-capita basis, was the lowest last year since the late 1930s, the attorneys general said.

About 21 percent of U.S. adults smoke, higher than the U.S. government's goal of reducing consumption to 12 percent in 2010, American Legacy Chief Executive Officer Cheryl Healton said at the press conference.