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INTRODUCTION

In February 1998, in response to information showing a resurgence of cigar use in the United States, the Federal Trade Commission issued Special Orders to the five leading domestic cigar manufacturers requiring them to report detailed information to the Commission on their cigar sales and advertising and promotional expenditures for calendar years 1996 and 1997. ^[1]   The findings of that inquiry are set forth in Part I of this Report, which provides the first in-depth analysis of the domestic cigar industry=s sales and advertising and promotional expenditures.  Part II provides a brief overview of the recent increase in cigar smoking prevalence and of the health risks associated with cigar smoking.  Finally, Part III contains the Commission=s recom­mendation that Congress enact legislation to regulate cigars in a manner consistent with the current federal regulation of cigarettes and smokeless tobacco, including a requirement of health warnings on cigar labeling and advertising, and a prohibition against advertising cigars on any electronic media regulated by the Federal Communications Commission.

I.  THE FTC DATA ON CIGAR SALES AND ADVERTISING AND PROMOTIONAL EXPENDITURES    

A. Overview

  The Commission=s decision to require the cigar manufacturers to produce their sales and marketing data was based upon two factors.  First, survey reports show a dramatic upswing in U.S. cigar consumption since 1993 among both adults and adolescents.  Second, the National Cancer Institute in early1998 issued a report on the health effects of cigar smoking (here­inafter ANCI Cigar Monograph@) updating the Surgeon General=s prior findings on the health risks of cigars, and concluding that cigar smoking poses serious disease risks, including cancers of the mouth, esophagus, pharynx, larynx, and lung. ^[2]

           Prior to the issuance of the Commission=s Special Orders, the limited information available on the cigar industry=s advertising efforts pertained primarily to expenditures in conventional media such as magazines, newspapers, television, and radio.  No information was available on other types of advertising and promotional efforts.  The Commission=s Orders required each of the cigar companies to produce a report of the total number of cigars sold, the total dollar volume of cigar sales, and the total dollar amounts expended on cigar advertising, merchandising, and promotion in 1996 and 1997. ^[3]   The Orders also required a breakdown of sixteen different categories of advertising and marketing expenses for each cigar brand marketed, including celebrity endorsements and product placements in movies and television. ^[4]

The data reported herein confirm that the cigar industry experienced a dramatic increase in cigar unit sales and revenue from 1996 to 1997.  Although the total advertising and promotional expenditures for cigars are modest, equaling approximately $30.9 million in 1996 and $41 million in 1997, the data also show that such expenditures increased by thirty-two percent over a two year period, with substantial increases reported in almost every expenditure category. ^[5]   For example, expenditures on conventional advertising increased over fifty-one percent from 1996 to 1997, with magazine advertising growing by forty-nine percent and newspaper advertising growing by 254%.  More importantly, the Commission data indicate that over seventy-five per­cent of the industry=s 1996 and 1997 advertising and promotional dollars were spent on forms of advertising and promotion about which information was previously unavailable.  The total expenditures in these categories increased approximately twenty-seven percent from 1996 to 1997, with large spending increases on point of sale advertising and public entertainment events.   

The aggregate data presented in more detail below will serve as a baseline to assist interested parties in monitoring trends in cigar advertising and promotion, cigar smoking prevalence, and consumers= cigar preferences.  The Commission intends to furnish Congress with updated cigar reports periodically.

B.  The Increase In Cigar Sales

From 1996 to 1997, the major cigar companies greatly expanded their product lines and experienced substantial increases in sales volume and revenues. ^[6]   The number of cigar brands marketed increased by fifty-four percent from a total of 207 brands in 1996 to 319 brands in 1997.  In addition, the number of cigar varieties increased by almost forty-one percent from 1,437 varieties in 1996 to 2,025 varieties in 1997. ^[7]   

Table 1 shows that aggregate unit sales of the five largest manufacturers increased fifteen percent from 1996 to 1997, from approximately 3.8 billion cigars to 4.4 billion cigars. ^[8]   The aggregate dollar sales of cigars, based upon wholesale price, increased forty-three percent from 1996 to 1997 -- from $613 million to $876 million. 

The sales data also provide information about the market shares held by cigars of different sizes, and their respective contributions to industry revenues.  

Table 2 shows that the percentages of the market held by little, medium, and large cigars remained generally consistent from 1996 to 1997. ^[9]   While little cigars comprised twenty-seven to twenty-eight percent of cigars sold in 1996 and 1997, they made up less than six percent of total cigar revenues for those years.  In contrast, large cigars comprised approximately thirty-eight percent of all cigars sold during such time, but accounted for sixty-five percent of total cigar revenues in 1996 and sixty-eight percent in 1997.  Medium size cigars made up approximately thirty-four to thirty-five percent of unit sales, and twenty-seven percent of sales revenues in 1996 and thirty percent in 1997.

            C.  The Increase In Advertising And Promotional Expenditures

The dramatic increase in cigar use in America has occurred in tandem with the increase in promotional activities surrounding cigar smoking.  In the early 1990s, cigar enthusiasts began promoting fancy cigar dinners and smoker=s evenings in expensive restaurants and hotels.  Such cigar events at restaurants, bars, and private clubs are now common.  In addition, Cigar Aficionado and Smoke, two magazines devoted almost entirely to cigar smoking, have been introduced since 1992 and have rapidly gained popularity.  These magazines have featured on their covers and in profile articles numerous cigar smoking actors and actresses, sports figures, and celebrity models.  Also in recent years, cigars have appeared as props and in the plot lines of numerous movies and television shows.  The data reported herein provide specific information on the types of advertising and promotional activities conducted by the leading cigar manufacturers in calendar years 1996 and 1997.

Table 3 reports the cigar manufacturers= total advertising and promotional expenditures for 1996 and 1997, together with a breakdown of those expenditures into sixteen advertising and promotional categories.  The cigar manufacturers= total expenditures on advertising and promo­tion increased thirty-two percent from 1996 to 1997, from $30.9 million to $41 million.  More­over, there was a significant increase in the amount spent in almost every category of advertising and promotional expenditure.

By far, the industry=s largest expenditures in 1996 and 1997 were on promotional allow­ances -- that is, discounts and other incentives given to retailers to encourage cigar sales.  In both years, these expenses comprised approximately forty percent of the total amount expended for advertising and promotion.  The dollar amount spent on promotional allowances increased over thirty-one percent, from approximately $12.4 million in 1996 to $16.3 million in 1997.

Magazine advertising was the manufacturers= second largest advertising expense in both years, comprising over twenty-one percent of total expenditures in 1996 and twenty-four percent in 1997.  Actual expenditures for magazine advertising increased forty-nine percent from 1996 to 1997, from $6.6 million to almost $10 million.  Point of sale advertising, the next largest expenditure category, increased almost thirty-seven percent, from $3.8 million in 1996 to $5.2 million in 1997.

The companies also reported significant spending increases between 1996 and 1997 in the following categories: public entertainment; promotional items; newspaper advertisements; celebrity endorsements and paid product placements; and Internet advertising.  Expenditures for public entertainment events, such as cigar dinners and cigar tastings, rose forty-six percent, from $692,000 in 1996 to just over $1 million in 1997.  Spending on promotional items other than cigars increased by 116%, from approximately $306,000 to $660,000.  The greatest percentage increase in spending was on newspaper advertising, which rose 254% from approximately $189,000 to $671,000.

Expenditures on celebrity endorsements and appearances, and payments for product placements in movies and television, more than doubled between 1996 and 1997, from approxi­mately $143,500 to approximately $339,000. ^[10]    The manufacturers= reports indicate that in 1996 and 1997 certain companies paid endorsement fees to sports personalities, and made pay­ments to movie studios and third party promoters for the appearance of their cigars in movies and a number of popular television shows.  Demographic information obtained for a sampling of these television shows indicates that, while a majority of each show=s viewers are adults, viewers under age eighteen comprise eleven to thirty-eight percent of the audiences for such shows. ^[11

Internet advertising rose almost 180% from 1996 to 1997, from over $78,000 to over $218,000.  Moreover, it is likely that the cigar industry=s presence on the Internet is substantially greater than what is reflected in their actual advertising expenditures because there may not be costs associated with certain types of indirect promotion.  For example, Cigar Aficionado maga­zine places ratings for nearly 1,300 cigars on its Internet site.  Similarly, Smoke magazine=s website features an online shopping guide with information on more than thirty cigar brands.  In addition, several cybersmoker organizations offer chat rooms, and some also provide hyperlinks to the websites of cigar manufacturers.  Finally, a number of Internet cigar shopping sites advertise savings on premium brands of cigars.

Coupons and Retail Value Added was the only category to show a significant decline in expenditures between 1996 and 1997.  Expenditures for television and radio advertising also declined slightly -- from approximately $327,000 to $325,000.  Even these relatively small expenditures for television and radio advertising are noteworthy given that cigarettes, smokeless tobacco, and little cigars are banned from such media. ^[12]    Moreover, these expenditures reflect only the broadcast advertising paid for by the leading manufacturers, and not broadcast advertising run independently by tobacco retailers.

Finally, the Commission Orders required the cigar manufacturers to report the total dollar amount spent in the above advertising and promotional categories in connection with: sponsoring or promoting any sporting event, sports team or individual; advertising at sporting events; or expenses for sports-related equipment or paraphernalia.  In both 1996 and 1997, sports-related expenditures comprised only approximately one percent of the total advertising and promotional expenditures.  

D.  Physical Characteristics Of The Cigar Varieties

Cigars come in a great range of weights, sizes, and styles.  As a result, cigars can vary significantly in the amounts of nicotine and other deleterious substances that they deliver, the smokers to whom they appeal, and the manner in which they are smoked.  The Commission Orders required the manufacturers to report several physical characteristics of each cigar variety, including size, style, individual cigar weight, tobacco type, method of curing, and whether any flavorings were added to the cigar.  These baseline data provide preliminary information on the physical characteristics of cigars and possible interrelations between cigar styles and consumer preferences.

Table 4 reports the percentages of little, medium, and large cigars that have a non-tobacco tip and the percentages that are untipped.  In both 1996 and 1997, virtually all of the little cigars were tipped.  In addition, roughly sixty percent of the medium size cigars were tipped, while almost none of the large cigars were tipped.

Table 5 reports the percentages of little, medium, and large cigars that contained added flavorings.  The flavorings reported included, but were not limited to, cherry, fruit, menthol, nutty, sweet, vanilla, and aromatic.  Some cigar varieties contained more than one flavor.  The data indicate that flavored cigars were available in each size category.  However, over eighty-three percent of little cigars contained flavoring, compared to just thirty-one percent of large cigars in 1996 and sixteen percent in 1997.  The table also indicates that flavored large cigars contributed proportionally less sales revenue than unflavored large cigars.

Table 6 reports the average weight of an individual cigar within each of the three weight categories (little, medium, and large), and the range of cigar weights within each size category.  The average weights reported are sales weighted -- that is, the number of cigars sold at a given weight is factored into the average weight.  The average weights ranged from just over one gram for a single little cigar to approximately eight grams for a single large cigar.  Data on individual cigar weights are significant because a cigar=s weight affects the amount of nicotine and other deleterious substances emitted in its smoke

Table 7 reports the percentages of little, medium, and large cigars containing any reconstituted tobacco (in any part of the cigar) and the percentages of cigars containing no reconstituted tobacco.  In 1996 and 1997, virtually all little and medium cigars contained reconstituted tobacco, and the cigars containing reconstituted tobacco accounted for almost all sales revenues in these size categories.  In the large cigar category, the cigars made without reconstituted tobacco, i.e., the premium cigars, comprised only seven to ten percent of all units sold, but approximately thirty-six to forty-seven percent of all dollar sales in 1996 and 1997, respectively. 

Table 8 reports the percentages of little, medium, and large cigars consisting entirely of air cured tobacco and the percentages consisting in part of heat cured tobacco (in any part of the cigar). ^[13]    The data indicate that a substantial percentage of medium size cigars contain heat cured tobacco -- approximately twenty-seven and thirty-four percent of the units sold in 1996 and 1997, respectively.  Almost no little cigars and only a small percentage of large cigars contain heat cured tobacco.  Differences in the curing, aging, and fermentation of tobacco may affect its pH and palatability, and may also affect its chemical content, including the levels of nicotine and nitrosamines found in the tobacco.

II. CURRENT PATTERNS OF CIGAR SMOKING PREVALENCE

The above reported increases in cigar sales and advertising and promotional expenditures come at a time when health authorities are expressing increasing concern about cigar usage.  This section discusses the findings of the NCI Cigar Monograph and other newly released survey data regarding the  recent increases in cigar smoking prevalence rates.

A. Cigar Smoking Among Adults

After a twenty-year decline, cigar consumption in the United States has increased significantly between 1993 and the present.  According to USDA estimates, Americans consumed slightly more than five billion cigars in 1998, a fifty-seven percent increase over the 3.4 billion cigars consumed in 1993. ^[14]    While consumption of all types of cigars has increased since 1993, the most dramatic growth has been in the sales of premium cigars,  i.e., hand-rolled cigars made entirely of long filler tobacco that retail for more than one dollar apiece.  Unit sales of premium cigars increased over 150% between 1993 and 1998. ^[15]

Cigar smoking rates among the population also have increased markedly in the 1990s, although it is difficult to pinpoint the rate of increase due to the varying definitions of cigar use employed in the relevant surveys.  The only prevalence series spanning the recent rise in cigar popularity is the California Adult Tobacco Use Survey, which shows that current cigar use among California men almost doubled between 1990 and 1996, from 4.8% to 8.8% of the population.  Current cigar use among California women increased five-fold during this period, from .2% to 1.1%. ^[16]   Nationwide, the 1997 National Household Survey on Drug Abuse (NHSDA) indicates that 10.5% of men and 1.9% of women surveyed in 1997 reported smoking cigars in the previous month. ^[17]      

The greatest increase in cigar smoking prevalence has occurred among young adult men.  The California surveys show that cigar smoking among men eighteen to twenty-four years old increased from four percent in 1990 to almost 12.5% in 1996.  The NHSDA data show that nationally 17.5% of men eighteen to twenty-five years old, and thirteen percent of men twenty-six to thirty-four years old, reported smoking a cigar in the past month.  Similarly, the NHSDA data indicate that cigar smoking rates are higher among young women, eighteen to twenty-five years old, than among women in any other age group.  These patterns represent a significant change from earlier surveys, which showed the greatest concentration of cigar smoking among older men.

With regard to frequency of use, recent surveys indicate that most adult cigar users smoke on an occasional, rather than on a daily, basis.  The 1997 NHSDA survey reports that approximately eighty-nine percent of adult cigar smokers smoke less than daily. ^[18]   In addition, survey evidence suggests that much of the recent increase in cigar smoking prevalence is due to an increased number of occasional smokers.  The rise in occasional cigar use is observed most clearly in the California surveys where daily cigar smoking rates remained constant between 1990 and 1996, while the percentage of persons who reported smoking cigars on a less frequent basis almost doubled. ^[19]

B. Cigar Smoking Among Youth 

 While there is no data on teen cigar use prior to 1996, several recently conducted national surveys on youth cigar use show that substantial numbers of adolescents are trying cigars. ^[20]   A 1996 in-school survey conducted nationally by the Robert Wood Johnson Foundation, and published by the Centers for Disease Control, showed that approximately twenty-seven percent of fourteen to nineteen year olds had smoked at least one cigar in the preceding year. ^[21]   Moreover, nearly three percent of the adolescents surveyed in the Robert Wood Johnson study reported smoking fifty or more cigars in the previous year.  The percentage of teenagers in this survey who reported using more than fifty cigars in the previous year is greater than the percentage of young adults who in a 1991 survey had reported smoking more than fifty cigars in a lifetime. ^[22]   

The 1997 National Youth Risk Behavior Study (ANYRB@), conducted by the Centers for Disease Control in high schools nationwide, indicated that twenty-two percent of high school students (grades 9-12)  had smoked cigars within the previous thirty days.  Another recent national survey of adolescents reports lower but still significant cigar smoking rates.  The 1997 National Household Survey on Drug Abuse (ANHSDA@), conducted at-home through a self-administered questionnaire, indicates that five percent of twelve to seventeen year olds reported smoking a cigar in the previous thirty days. 

Thus, while the various surveys of teenagers measured different markers, they all indicate a substantial incidence of cigar use.  The youth prevalence data also indicate that a substantial percentage of adolescent cigar smokers currently use cigarettes or other tobacco products. ^[23]       

In February 1999, the Department of Health and Human Services (AHHS@) issued a report on focus groups conducted nationwide to explore teenagers= cigar use patterns and their perceptions of cigar-related health risks. ^[24]  The focus groups, although only exploratory in nature, suggest that adolescent cigar use is widespread, that teens believe cigar smoking is more socially acceptable than smoking cigarettes or using spit tobacco, and that teens can easily purchase cigars.  In addition, teens report widespread use of cigars as Ablunts@ for smoking marijuana.  When blunting, the user opens the cigar and replaces all or most of the filler tobacco with marijuana or other substances.  The focus groups revealed that many teens smoke both ordinary cigars and blunts, and that teen references to cigar smoking and/or blunting are often hard to differentiate.  Thus, the practice of blunting likely contributes to the relatively high cigar smoking prevalence rates reported by other youth surveys.

III. THE HEALTH RISKS OF CIGAR SMOKING

The NCI Cigar Monograph concludes from the available evidence that regular cigar smoking, like the use of other tobacco products, can cause several forms of cancer.  The Monograph states that although the risks of these cancers are proportionate to the amount a person smokes, cigar smoke contains the same toxic and carcinogenic constituents found in cigarette smoke.  Cigar smoking can cause oral, esophageal, laryngeal and lung cancers.  Regular cigar smokers who inhale, particularly those who smoke several cigars per day, have an increased risk of coronary heart disease and chronic obstructive pulmonary disease.  Regular cigar smokers have risks of oral and esophageal cancers similar to those of cigarette smokers, but they have lower risks of lung and laryngeal cancer, coronary heart disease, and chronic obstructive pulmonary disease than cigarette smokers. ^[25]   In addition, cigar smoke generates high levels of indoor pollutants.  Thus, the NCI Cigar Monograph cautions that cigars are not a safe alternative to cigarettes.

Although the recent prevalence data suggest that most cigar users smoke only occasionally, the studies evaluated in the NCI Cigar Monograph all involved subjects who were daily cigar smokers (one or more cigars a day). ^[26]   The Monograph notes that the risks to occasional cigar smokers are difficult to measure because of the wide variability in the frequency of smoking among occasional smokers and in the amounts of tobacco contained in different cigars.  The Monograph concludes, however, that it is reasonable to assume that the risks for occasional cigar smokers lie somewhere between those for individuals whose only exposure to tobacco smoke is environmental tobacco smoke and those of regular cigar smokers.  As occasional cigar smokers smoke more frequently or inhale more deeply, their exposure to tobacco smoke increases, and with that increased exposure comes a proportionate increase in disease risks. ^[27]

There currently is no direct evidence on the form of the dose response relationship for occasional cigar smokers.  The most relevant information concerning the likely risks to occasional cigar smokers is the NCI=s analysis of the risk profile for the least intensive daily smokers, those persons who smoked one to two cigars daily.  The NCI analysis estimates that these cigar smokers may be subject to significantly elevated risk for oral, esophageal, and laryngeal cancers. ^[28]

Finally, like other tobacco products, cigars contain substantial quantities of nicotine.  Cigar smoke may be inhaled, producing the same virtually instantaneous effects of nicotine delivery produced by cigarettes, or it may be held in the nose and mouth, providing a somewhat slower rate of nicotine absorption as occurs with smokeless tobacco products.  Both routes of nicotine delivery are well-documented to lead to dependence with other forms of tobacco use.

While there are no published studies on the frequency of cigar addiction, the available survey data indicate that a substantial majority of adult cigar smokers smoke only occasionally. ^[29]   According to the NCI Monograph, patterns of tobacco usage are an important indicator of addiction.  Thus, although it is likely that heavy regular smokers may develop nicotine tolerance and a physical dependence on cigars, there would be little basis to expect that people who rarely smoke cigars on two or more consecutive days would become physically dependent upon cigars. ^[30]  The Monograph cautions, however, that addiction to nicotine is a process that typically begins during adolescence and young adulthood, and therefore the low rate of addiction among adult cigar smokers may not apply to cigar use begun in adolescence. ^[31]

  IV.     CONSUMER PERCEPTIONS OF THE RISKS OF CIGAR SMOKING

The limited information available on consumers= perceptions of cigar-related risks suggests that consumers generally are aware that cigar smoking poses health risks, although they lack information about the specific risks involved.

In 1996, the American Cancer Society conducted a survey of adults indicating that a majority of both cigar users and non-users believe cigar smoking can pose health risks. ^[32]   Similarly, the recent HHS focus group study on youth cigar use indicates that, when specifically probed about the health risks of cigars, most teens say they believe that cigars are dangerous and addictive. ^[33]   According to the HHS report, it appears that most teens have received little information about the health effects of cigar use, but that they draw general conclusions about possible cigar-related health risks based upon their knowledge of the dangers of cigarettes or other tobacco products.  Several teens indicated that, given the known harms of tobacco, they believe cigars must be somewhat dangerous, but that they do not know specifically how dangerous. ^[34]  

Finally, the results of a 1998 Canadian focus group study similarly suggest that consumers recognize that cigar smoking is harmful, but that they lack knowledge of the specific risks involved. ^[35]   The Canadian focus groups, conducted on behalf of Health Canada=s Office of Tobacco Control, probed several groups of adult and adolescent cigar smokers about their awareness of the health risks associated with cigar smoking.  The focus group report concludes that the majority of cigar smokers interviewed know that cigar smoking poses health risks, yet they have only a vague awareness of the specific risks involved.  Like the HHS focus group participants, the Canadian cigar smokers also expressed the belief that, given the health hazards of cigarettes, cigars must pose health risks.  In addition, the cigar smokers generally expressed an interest in getting more specific information about the consequences of cigar smoking.  However, the focus group report also indicates that many participants believe cigar tobacco is Acleaner@ and Amore natural@ than cigarette tobacco, and therefore less dangerous.

All of the above research has limitations.  First, the results of these studies cannot necessarily be projected to the overall population.  Second, there are inherent limitations in using survey research to discern attitudes and beliefs about the riskiness of products.   In this regard, it is difficult to assess the extent to which cigar smokers personalize their expressed beliefs about the risks of cigar smoking generally. 

Each of the above studies, for example, points to the possibility that cigar smokers possess an Aoptimism bias@ about their own cigar-related risks.  In other words, these cigar smokers may tend to minimize their personal risk or to believe that they are at less risk than other cigar smokers.   Optimism bias or Aunrealistic optimism@ is a well-documented phenomenon among both adult and adolescent cigarette smokers.  Studies consistently demonstrate that cigarette smokers perceive their own risks from smoking to be lower than the risk to other smokers, and therefore may tend to underestimate the extent to which smoking-related risks apply to themselves. ^[36]

V. RECOMMENDATION

The NCI Cigar Monograph concludes that cigar smoking can pose serious health risks.  The Commission believes that, as is already the case for cigarettes and smokeless tobacco, consumers should be advised of these risks.  This is especially true in light of current cigar advertising, which portrays cigar smoking as part of a glamorous and affluent lifestyle.  

While consumers may be aware generally that cigar smoking poses risks, warnings highlighting the specific health risks of cigar smoking may further educate consumers or reinforce their existing beliefs.  Moreover, given the public=s extensive exposure to health warnings for cigarettes and smokeless tobacco, the current absence of clear and conspicuous federal health warnings for cigars may send a misleading signal that cigars are not harmful to one=s health, or that cigars are a safe alternative to cigarettes. ^[37]   Similar effects may result from the presence of cigar advertising on television and other electronic media.  Thus, the Commission believes that con­sistent tobacco regulation is desirable.

A. Rotational Health Warnings

Presently, both cigarette and smokeless tobacco manufacturers are required by federal statute to display rotational health warnings on all labeling and advertising for their products.  See Federal Cigarette Labeling and Advertising Act, 15 U.S.C. '1331; Comprehensive Smokeless Tobacco Health Education Act of 1986, 15 U.S.C. '1441.  Similarly, the Commission believes that cigar health warnings should be mandated by federal legislation.  In the alternative, Congress may wish to direct the Commission to use its existing authority to require health warnings on cigars. ^[38]

  The Commission recommends that cigar manufacturers and marketers be required to comply with a system of multiple rotating warnings, similar to the rotational plans in place for cigarettes and smokeless tobacco.  The advantage of rotational warnings, as compared to a single health warning, is that the multiple warnings can provide a broad range of health risk information, while also increasing the likelihood that consumers pay attention to the individual messages over an extended period of time.  However, the Commission recognizes that the rotational plan for cigar warnings should be appropriately tailored to accommodate the relatively small sales volume of many cigar brands and the broad diversity of cigar packaging. ^[39]  

Health warnings should be displayed clearly and conspicuously on all labeling and advertising for cigars.  Currently, the large majority of cigars are sold in prepackaged containers, and the health warnings should be displayed clearly and conspicuously on all such cigar packages. ^[40]   Although a small percentage of cigars are sold singly, without packaging, there are a number of ways in which health warnings could be displayed on these cigars.  For example, the warnings could be displayed on the boxes or other containers from which individual cigars are sold, or could be posted in retail establishments that sell cigars individually.  The Commission would be pleased to participate in any discussions between Congress, the cigar industry, and other interested parties on these and other options regarding the placement of warnings on advertising and labeling.

The conclusions stated in the NCI Cigar Monograph suggest several possible health warning messages.  Such messages should advise consumers of the risks associated with cigar smoking in a factual, yet clear and easily understandable manner.  In adopting any final warnings, of course, care must be taken to ensure that the warnings communicate the intended messages to consumers.  The Commission also would be pleased to assist Congress in this effort. 

As a starting point, the Commission recommends that Congress consider the following three warnings, which address the Monograph=s conclusions as to the major adverse health consequences of cigar smoking: ^[41]

WARNING: Regular cigar smoking can cause cancers of the mouth and throat, even if you do not inhale.

The NCI Cigar Monograph found that regular cigar smokers are at a similar risk of can­cers of the oral cavity, pharynx, and esophagus as are cigarette smokers.  Moreover, the mouth and throat are exposed to toxins in the cigar smoke even if the cigar smoker does not inhale.

Inclusion of the qualifier Aregular@ in the proposed warning accurately reflects the existing scientific evidence on cigar-related health risks, which is limited to the experiences of those who smoke on a daily basis.  While the NCI Cigar Monograph also expresses concern that occasional cigar smokers are likely to be at some level of risk, the magnitude cannot be quantified at present because of the wide divergence in cigar smoking behavior and the lack of epidemiological evidence.  Nevertheless, the potential for risk from occasional smoking suggests the possibility that warnings limited to Aregular@ cigar use might give the misleading impression that casual use is completely free of risk.

WARNING: Inhaling cigar smoke can cause lung cancer.  The more deeply you inhale, the greater your risk.

The NCI Cigar Monograph concludes that cigar smokers who inhale, particularly those who inhale deeply and smoke several cigars a day, are at increased risk of lung cancer.  This message is especially important to current and former cigarette smokers since they are the cigar smokers most likely to inhale.  It is also an important message to convey to adolescents who may be experimenting with cigars and cigarettes interchangeably.    

WARNING: Cigars are not a safe alternative to cigarettes. 

The NCI Cigar Monograph concluded that cigars are not a safe alternative to cigarettes.  This conclusion may be obscured, however, by the recent popularity of cigars, their high visibility in the media, and numerous celebrity endorsements of the products.  According to the Monograph, the risks of tobacco smoke exposure are similar for all sources of tobacco smoke, although the magnitude of a cigar smoker=s risk is proportionate to the frequency and intensity with which one smokes.  Regular cigar smokers have risks of oral and esophageal cancers similar to those of cigarette smokers, but are at lower risk for heart and lung disease than cigarette smokers because they generally smoke less frequently and inhale less deeply than cigarette smokers.

Persons considering switching from cigarettes to cigars are advised that the only way to eliminate the serious harm that can result from cigarette smoking is to quit using tobacco entirely.  While some studies indicate that cigarette smokers can reduce their risk by switching to cigars, this reduction in risk is far smaller than what they could achieve by eliminating all tobacco use.  The Monograph attributes the switchers= reduction in risk to their lower inhalation and total tobacco consumption, as compared to cigarette smokers.  However, the greater likelihood that former cigarette smokers will inhale cigar smoke means that they are at greater risk than cigar smokers who have never smoked cigarettes.

B. Prohibition on Electronic Advertising

Advertising on electronic media, i.e., radio and broadcast and cable television, is the type of advertising most likely to be passively received by minors.  Presently, cigarettes, smokeless tobacco, and little cigars are prohibited from advertising on any medium of electronic com­mu­nication subject to the jurisdiction of the Federal Communications Commission. ^[42]   There is no similar prohibition on advertising other cigars through the electronic media.  This disparate treatment of cigars could have the effect of  increasing cigar sales and consumption.  In 1971, for example, shortly after implementation of the prohibition on the electronic advertising of ciga­rettes, several tobacco manufacturers began advertising little cigars on television.  In response, little cigar sales increased 254% between 1971 and 1972.   Sales dropped steadily after Congress amended the Cigarette Act in 1973 to extend the prohibition on broadcast advertising to little cigars. ^[43]  

This Report shows that the cigar companies spent about $325,000 on television, radio, and audiovisual advertising in both 1996 and 1997.  In addition, some portion of the $339,000 reported as expenditures for endorsements and product placements was money spent to place cigars on television shows.  Moreover, the extent of cigar advertising on television and radio is greater than simply the major manufacturers= expenditures reported herein.  For instance, it has come to the Commission=s attention that individual cigar retailers in several parts of the country have run cigar advertisements recently on local television and radio stations.

In keeping with the Commission=s belief that cigars and other tobacco products should be regulated in a consistent manner, we recommend that Congress enact legislation prohibiting the advertisement of cigars on television, radio, or any other electronic media regulated by the Federal Communications Commission.

C. Ensuring Consistency in Regulating Youth Access to Tobacco Products

In order to reduce youth access to tobacco products, local and municipal governments increasingly are enacting ordinances that prohibit the sale of cigarettes and smokeless tobacco from self-service displays, requiring that they be placed in locations less accessible to minors.  Additionally, in 1996 the Food and Drug Administration (AFDA@) adopted regulations restricting the sale of cigarettes and smokeless tobacco to protect children and adolescents, in part by eliminating self-service displays. ^[44]   Although the FDA regulations have not yet been implemented, several large grocery and pharmacy chains across the country have voluntarily moved cigarettes and smokeless tobacco products behind the counter.  As cigarettes and smokeless tobacco become less readily accessible to underage smokers, it will be important also to restrict youth access to cigars to prevent them from becoming the tobacco product of choice for minors. ^[45]          

Thus, the Commission recommends that Congress also consider measures to reduce youth access to cigar products, including restrictions on the use of self-service cigar displays.  Such  legislation could be tied to the implementation of federal restrictions on the sale of cigarettes and smokeless tobacco products. ^[46]   The Commission recognizes that, because of their small size and sales volume, cigar manufacturers may be unable to compete effectively with cigarette manufacturers for restricted shelf space.  The legislation therefore should provide flexibility for alternative cigar shelving arrangements that provide reasonably equivalent barriers to youth access.  The Commission also recommends that tobacco specialty stores be exempted from such regulations, provided that they take reasonable steps to restrict unaccompanied access by minors

VI. CONCLUSION  

The Commission is pleased to provide Congress with this report of the sales and adver­tising practices of the domestic cigar industry.  Commission staff will continue to monitor cigar advertising and will send reports to Congress periodically on cigar sales and advertising expenditures.