Objective: To assess the impact of promotions on cigarette sales in Taiwan after the cigarette market opened to foreign companies, and to assess whether young smokers were targeted by these companies.
Methods: Trends in cigarette sales, advertising expenditure, brand preference, and cigarette consumption were examined for the period following the 1987 opening of the cigarette market. Tobacco industry internal documents from Legacy Tobacco Documents Library of the University of California, San Francisco, were searched for corporate strategies on promoting youth consumption in Taiwan.
Results: Between 1995 and 2000, the inflation adjusted advertising expenditures by all foreign firms increased fourfold. Much of the expenditure was spent on brand stretching the Mild Seven (Japan) and Davidoff (Germany) brands in television advertising. By 2000, the market share of foreign cigarettes exceeded domestics by three to one among young smokers and the leading brand preferred by this segment shifted from the most popular domestic brand (Long Life) to a foreign brand (Mild Seven). Furthermore, there was a sudden increase of 16.4% in smoking rates among young adults (from 36.1% to 42.0%) during the first five years after the market opened. This was also accompanied by increased per capita cigarette consumption and decreased age of smoking initiation. Industry documents confirmed the use of strategies targeted at the young. In particular, establishing new point of sale (POS) retail stores or promotional activities at POS were found to be more effective than advertising in magazines.
Conclusions: This study provides evidence that advertising increased with increased competition following the market opening, which, in turn, spurred cigarette sales and consumption. Foreign tobacco companies have deliberately targeted youth in Taiwan and succeeded in gaining three quarters of their cigarette purchases within a decade. Expanding youth consumption will incur excessive future health care costs borne by society. Foreign tobacco companies should be obligated to reimburse these expenses through higher tariffs on cigarettes.