Shaping Retail: The Tobacco Industry’s Playbook

Key Points

• US marketing data shows that in 2022 the tobacco industry invested over 97% of its total marketing expenditure on promoting cigarettes and smokeless products in retail stores.¹
• Tobacco companies give price discounts, place advertisements inside and outside of stores, and offer incentives for retailers to encourage them to keep selling their products.²
• Tobacco companies’ advertising and promotional efforts in retail settings contribute to the initiation and progression of tobacco use among young people.³

In the countries that ban tobacco advertising and promotion, retail stores have become a key route for the tobacco industry to reach both current and future consumers.⁴ As a result, tobacco companies have made extensive investments in retail environments in order to normalize the presence of tobacco products in everyday life.³

In the US, retail setting accounts for 97% of the total marketing expenditure of tobacco companies. ¹This spending includes ‘trade promotional expenditure’, which covers retailer incentives and in-store displays¹⁵, as well as efforts to recruit retailers as political allies to oppose tobacco control legislation. ¹⁵⁶⁷⁸

This page provides an overview of the strategies the tobacco industry uses to interfere in the retail environment. The following overview provides links to further pages with more detailed information and examples.

Retailer Incentives

Tobacco companies have strengthened their relationships with retailers and distributors through loyalty programmes, and secretive incentives,⁴ promising better service and support while encouraging retailers to work with company representatives to maximize profits.⁶ In return, cigarette companies demand significant control over product placement and advertising in stores.⁹¹⁰ The more requirements a retailer meets, the higher the payment offered.¹¹

In countries that adopt legislation that mandates the covering of tobacco displays in stores, tobacco sales representatives incentivize retailers to maintain stock levels, verbally promote certain products, and place brands in specific spots to ensure availability and visibility.¹²¹³ Even when products are not fully visible, tobacco companies still incentivise retailers to follow specific display layouts to compete with rival brands.¹² In some cases, retailers reported receiving prizes and financial rewards  in exchange for giving certain brands prominence on the price list or in the tobacco cabinet.⁹¹⁴

The contractual agreement between tobacco representatives and retailers may include:

POS marketing

Companies pay retailers to position their products and branded items, such as signs, inside and outside the store. They also pay them to place displays and shelving in prominent spots near checkout counters (known as ‘slotting allowances’) and other highly visible areas within retail environments. ^1516171819 This exposure to tobacco marketing at POS has been linked to a higher likelihood of smoking initiation among adolescents and increased adult tobacco use.⁶²⁰

Other strategies have been employed by transnational tobacco companies (TTCs) to dominate visually at POS. In some settings where companies were unable to advertise brand names or trademarks, cigarette packs have become the primary medium for display and attracting attention.²¹

Promotional allowance strategies

Retail discounts and promotional allowances are a key marketing tactics.²² Restrictions on tobacco advertising and promotion have led TTCs to increase investment in price promotions within retail settings.²³ These allowances typically include, among other things, price discounts and volume rebates.²⁴ By offering a range of discounts, from quantity discount to “buy one, get one free” deals,²⁵ companies can reduce the impact of taxes and make their products more appealing to price-sensitive customers. ²⁶  See also Tobacco Industry Pricing Strategies.

Another strategy used by the industry is setting a recommended retail price (RRP) to maintain consistent pricing for tobacco products across retailers. This approach enhances the brand’s perceived value and drives sales.²⁷

Awards

In the United Kingdom (UK), retail magazines host major events that award the best-performing convenience stores, offering benefits such wider recognition and networking.²⁸²⁹ Sponsored for many years by wholesalers, food companies, and TTCs like Japan Tobacco International and Imperial Brands,^3031323334 these events have become platforms for launching new tobacco products. For example, in 2020, JTI used the UK Retail Industry Awards event to introduce Sterling Dual Capsules, cigarillos with mentholated tobacco and a peppermint-flavoured capsule filter, ³⁵³⁶ which were marketed to bypass the UK menthol ban.³⁷ These cigarillos also won an award and were described as having “a strong performance.” ³⁵ TTCs often release special edition cigarettes under various pretexts such as brand anniversaries, cultural festivals, and other special events.²¹

To find out about these strategies in more depth, see Shaping Retail: The Role of Incentives

Building Alliances

Recruiting retailers as political allies is a strategy the tobacco companies use to promote their corporate image directly to retailers and encourage them to lobby against tobacco control legislation that could reduce profits.⁵⁷ Therefore, using industry arguments, retailers often exaggerate the impact of tobacco control policies on businesses and jobs.⁷

Highlighting the threat of reduced revenue is a typical strategy used by tobacco companies to mobilise retailers. They argue that tobacco sales are vital for increasing customer footfall in small retailers and driving profits.³⁸³⁹ TTCs supplies retailers with tools and information to lobby policymakers, along with financial support. For example, in the US, between 2020 and 2022, many states and cities proposed bans on flavoured tobacco products. In response, Philip Morris USA (part of Altria) and R.J. Reynolds (owned by British American Tobacco) placed signs in retail outlets encouraging customers to voice their opposition to the proposal across the country.⁷

TTCs have also enlisted convenience stores to push back against tobacco tax increases, despite independent evidence that the retail economy is not negatively affected.⁴⁰

For more information about this topic, see Shaping Retail: Undermining National Regulations

Retail Associations linked to tobacco companies

TTCs has carefully orchestrated strategies designed to enlist retailer associations to oppose policy changes, even if those changes would have minimal impact on retailers’ businesses, in order to weaken tobacco control regulations.⁷ Tobacco companies often provides funding to groups not directly related to tobacco, including general retailer groups, restaurant associations, and the hospitality sector.⁴¹

Below are some examples of retailer associations around the world that have collaborated with or received funding from the TTCs:

• Challenging plain packaging: Alliance of Australian Retailers (AAR) is a tobacco industry front group that represents 3,000 small business retailers and has been supported by major TTCs. The alliance launched the “It Won’t Work, So Why Try It” campaign, arguing that plain packaging lacks credible evidence of effectiveness and harms small businesses. The campaign featured television commercials with shopkeepers describing how the legislation would cause service difficulties and financial losses.⁴²
• Illicit trade and taxes: Retailers Against Smuggling (RAS), an Irish retailers’ lobby group is partially funded by the Irish Tobacco Manufacturers Advisory Committee (Itmac), whose members include BAT, JTI, and Imperial Tobacco. RAS has lobbied against high taxes on cigarettes and maintains connections with other local lobby groups, including Vape Business Ireland, which shares an office with RAS.⁴³
• POS ban: The Federation of Independent Retailers (NFRN), one of Europe’s largest retail trade associations with over 15,000 independent news and convenience retailers in membership throughout the UK and Ireland, received funding from BAT for its campaign against the POS display ban. Other TTCs have contributed to NFRN, with Philip Morris International (PMI) providing media training to the organization and JTI awarding grants to support retailers affected by COVID-19 in the UK.⁴⁴ NFRN has lobbied against many tobacco regulations including POS, plain packaging, and tobacco licensing.
• Ban of single use (disposable) e-cigarettes: The Association of Convenience Stores (ACS), represents UK local stores and includes BAT, JTI, PMI, Imperial Brands in its “Premium Club“. In 2024, ACS urged its members to contact MPs to oppose the ban on single use e-cigarettes.⁴⁵
• Flavoured tobacco ban: In the US, National Association of Tobacco Outlets (NATO), a retail tobacco trade association, includes major TTCs like Altria, R.J. Reynolds (subsidiary of BAT), ITG Brands (subsidiary of Imperial Brands), Swedish Match (owned by PMI), and Swisher International. NATO has spent over US$20 million to oppose public health measures including flavoured tobacco bans, framing their stance as support for local businesses.⁷

Targeting Specific Communities

The tobacco industry heavily markets its products to specific communities, using local stores as their main channels.⁴⁶ Several studies have shown that TTCs have targeted specific groups based on factors such as age, gender identity, race, location, brand loyalty or duration of tobacco use. These communities are often exposed to a higher density of tobacco retailers, more prominent advertising in local stores, and marketing that highlights appealing flavours.¹³ This was especially clear in menthol outlet contracts between R.J. Reynolds and retailers, which specifically targeted predominantly Black neighbourhoods in the US.¹³ See also Flavoured and Menthol Tobacco in the US

In some countries, particularly low and middle-income countries where tobacco control measures are less strong, or not well enforced, the tobacco industry has targeted children and youth around schools and playgrounds by increasing marketing and advertising to promote cigarette sales. ⁴⁷  Placement of tobacco marketing items may also impact young people. Products may be available in appealing flavours or placed on countertops at children’s eye level, or near sweets.⁴⁷⁴⁸

For more details and examples on this topic, see Shaping Retail: Targeting Specific Communities

Relevant links

• truth initiative report: The truth about tobacco industry retail practices
• Campaign for Tobacco-Free Kids report: Deadly Alliance

Tobacco Tactics Resources

• Lobby Groups: Retail Associations
• Flavoured and Menthol Tobacco
• Tobacco Industry Targeting Young People
• Shaping Retail: The Role of Incentives
• Shaping Retail: Targeting Specific Communities
• Shaping Retail: Undermining National Regulations

TCRG Research

• Policies regulating retail environment to reduce tobacco availability: A scoping review, R. Alebshehy, Z. Asif, M. Boeckman, 2023; 11: 975065, Front Public Health, doi: 10.3389/fpubh.2023.975065
• Public perception of policies reducing tobacco availability by regulating the tobacco retail environment: A case study in Egypt, R. Alebshehy, E. Elsebaie, O. Razum, Tobacco Prevention and Cessation, 2025;11(January):6, doi: 10.18332/tpc/197384