Article Analysis name University of Phoenix
ECO 365
December 2, 2012
John Bayer

Article Analysis
The article in the USA Today News, Tobacco companies profit from loophole, market small cigars by Liz Szabo, identifies a new trend in cigarette consumption: “Smokers who switch from high-priced cigarettes to cheaper, but equally dangerous, small cigars (Szabo, 2012 ), when in fact, it was originally assumed by public health officials that signs indicated progress was being seen towards the goals of preventing smoke related illness and death (Szabo, 2012 ). While analyzing the basis for the trends in consumption patterns as discussed in the article there appears to be two factors. First, it appears that although there is a definite decline in cigarette usage, other kinds of tobacco use is growing. According to the new report from the Centers for Disease Control and Prevention, “cigarette consumption declined 33% from 2000 to 2011, use of other kinds of tobacco grew by 123%, as smokers sought lower-cost alternatives to cigarettes, whose prices have risen sharply as a growing number of states raise taxes on them” (Szabo, 2012 ). They also report that “smoke tobacco consumption only decreased by with less than a 1% decrease in use from 2010 to 2011” (Szabo, 2012 ).
The second factor appears to be the tax "loopholes". Little cigars which are similar to cigarettes except for their brown wrapping are taxed at lower rates than cigarettes. These little cigars are cheaper than a pack of cigarettes for the consumer (Szabo, 2012 ), therefore more affordable. Terry Pechacek the co-author of the Centers for Disease Control and Prevention report says, “these loopholes appear to be driving the shift in smoking habits” (Szabo, 2012 ). * Considering the utility derived from the by products (secondary products produced by the tobacco manufacturers) mentioned in this article, we find that tobacco users (customer's with nicotine dependencies) are still being manipulated into purchasing tobacco products. According to the article, Thomas Glynn, the director of international cancer control at the American Cancer Society says, "This report demonstrates that the tobacco industry is as resourceful, and as predatory, as ever," (Szabo, 2012 ). The tobacco manufactures will continue to find secondary products to replace the loss of cigarette sales. * More and more individuals are being “outted” for their smoking habits. Researchers are coming out and making statements that smoking can cause cancer, and more and more facilities are now turning to smoke free environments (no smoking on the grounds). In my opinion smokers are being pressured to quit. Those that cannot are turning to secondary products like cigars and snuff to still be able to get the nicotine fix. These individuals may not be purchasing cigarettes but they are replacing that with substitutes. The costs of cigarettes and taxes is also a factor in the decrease of cigarette sales as tobacco users in this economy are being forced, due to their own resources to find alternate resources (Szabo, 2012 ). * As the sales of cigarettes decline, tobacco manufacturers are resourceful in finding new secondary products to introduce into the markets that are more tax friendly and still meet the needs of the tobacco user