FTC Cigarette and Smokeless Tobacco Data Collection

OMB Control No. 3084-0134
Expires [date]1
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
COMMISSIONERS:

Maureen K. Ohlhausen, Acting Chairman
Terrell McSweeny
[Commissioner]
[Commissioner]
[Commissioner]

File No. P114508
ORDER TO FILE SPECIAL REPORT
Pursuant to a resolution of the Federal Trade Commission dated [date], entitled
“Resolution Directing Use of Compulsory Process,” a copy of which is enclosed, [company] is
ordered to file a Special Report with the Commission not later than [date], containing the
information specified herein.
The Special Report is required to be subscribed and sworn to by an official of [company]
who has prepared or supervised the preparation of the Special Report from books, records,
correspondence, and other data and material in your possession.
The Special Report should restate each item of this Order with which the corresponding
answer is identified. If any question cannot be answered fully, give such information as is
available to you and explain how and why your answer is incomplete.
Please supply written responses to each of the following requests:
1.

The subscriber to your report is to give his or her full name and business address and
state his or her official capacity.

2.

State the full name of [company], its official address, and its date and state of
incorporation.

3.

State whether [company] is a subsidiary company; and if so, identify the full name and

1

For your information, under the Paperwork Reduction Act, as amended, an agency may
not conduct or sponsor, and a person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number. For this information request, that
number is 3084-0134.
1

official address of its ultimate parent company.2
4.

5.

A.

If [company] is a subsidiary company, identify all other direct and indirect
subsidiary companies of [company]’s ultimate parent company, and for each such
subsidiary company: (1) provide its full name and address; (2) identify its direct
parent company and all of its direct subsidiary companies; and (3) state whether it
has any involvement in the manufacturing, labeling, advertising, promotion,
marketing, development, offering for sale, sale, or distribution of smokeless
tobacco.

B.

If [company] is not a subsidiary company, identify all of [company]’s direct and
indirect subsidiary companies, and for each such subsidiary company: (1)
provide its full name and address; (2) identify its direct parent company and all of
its direct subsidiary companies; and (3) state whether it has any involvement in
the manufacturing, labeling, advertising, promotion, marketing, development,
offering for sale, sale, or distribution of smokeless tobacco.

Report the net (i.e., after accounting for returns) number of pounds of smokeless tobacco
sold in the United States by the Company during calendar year [XXXX].3 This includes

2

For the purposes of this Order, the term “subsidiary company” shall mean a company that
is controlled by another entity; the term “parent company” shall mean an entity that controls
another company; and the term “ultimate parent company” shall mean the highest level parent
company that is not controlled by another entity.
Furthermore, for purposes of this Order, the term “control” (as used in the terms
“control(s)” and “controlled”) shall mean: (a) holding 50 percent or more of the outstanding
voting securities of an issuer; (b) in the case of an entity that has no outstanding voting securities,
having the right to 50 percent or more of the profits of the entity, or having the right in the event
of dissolution to 50 percent or more of the assets of the entity; or (c) being the managing partner
in a partnership, even if such managing partner has a minority ownership interest in the
partnership.
3

For the purposes of this Order, the term “the Company” shall mean: [company]; all
entities identified in response to Questions 3 and 4, above that have any involvement in the
manufacturing, labeling, advertising, promotion, marketing, development, offering for sale, sale,
or distribution of smokeless tobacco; and all other entities related through common ownership or
common governance that have any involvement in the manufacturing, labeling, advertising,
promotion, marketing, development, offering for sale, sale, or distribution of smokeless tobacco.
The term “company” shall not, however, include any entity: (1) whose only involvement in the
manufacturing, labeling, advertising, promotion, marketing, development, offering for sale, sale,
or distribution of smokeless tobacco is as a convenience store, supermarket, gas station,
pharmacy, or other retailer; (2) that sells smokeless tobacco products that are not manufactured
or imported by the company; and (3) for which sales of smokeless tobacco products and
2

smokeless tobacco given for free to retailers for subsequent sale to consumers. Report
sales in whole pounds.
6.

Report the net (i.e., after accounting for returns) number of smokeless tobacco product
units sold in the United States by the Company during calendar year [XXXX] in
individual packages containing:
(a)
(b)
(c)
(d)
(e)
(f)

less than 1 ounce of smokeless tobacco;
from 1 ounce to less than 2 ounces of smokeless tobacco;
from 2 ounces to less than 5 ounces of smokeless tobacco;
from 5 ounces to less than 10 ounces of smokeless tobacco;
from 10 ounces to less than 15 ounces of smokeless tobacco;
15 ounces or more of smokeless tobacco.

This includes units given for free to retailers for subsequent sale to consumers. Each
unit sold should be reported in the smallest size package in which it could have been sold
to consumers. For example, a can roll consisting of ten individual cans each containing
1¼ ounce of moist snuff should be reported as ten units in category 6(b) and not as one
unit in category 6(e).
7.

Report the net (i.e., after accounting for returns) dollar value of smokeless tobacco sold in
the United States by the Company, excluding free samples, during calendar year
[XXXX]. Report dollar sales value in whole dollars.

8.

Report the net (i.e., after accounting for returns) number of smokeless tobacco product
units given away in the United States4 by the Company during calendar year [XXXX] in

smokeless tobacco related merchandise constitute less than 25% of its total retail sales.
Furthermore, for the purposes of this Order, the term “United States,” when used in a
geographical sense, includes the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the United States
territorial possessions (including Guam, the Virgin Islands, American Samoa, Wake Island,
Midway Islands, Kingman Reef, and Johnston Island).
In addition, for the purposes of this Order, the phrase “sold in the United States” shall
include all sales: (a) within the United States; (b) to members of the Armed Forces of the
United States located outside the United States; or (c) for delivery to a vessel or aircraft of the
Armed Forces of the United States, as supplies, for consumption beyond the jurisdiction of the
internal revenue laws of the United States.
4

For the purposes of this Order, the phrase “given away in the United States” shall include
all smokeless tobacco product given away: (a) within the United States; (b) to members of the
Armed Forces of the United States located outside the United States; or (c) for delivery to a
3

individual packages containing:
(a) less than 1 ounce of smokeless tobacco;
(b) from 1 ounce to less than 2 ounces of smokeless tobacco;
(c) from 2 ounces to less than 5 ounces of smokeless tobacco;
(d) from 5 ounces to less than 10 ounces of smokeless tobacco;
(e) from 10 ounces to less than 15 ounces of smokeless tobacco;
(f) 15 ounces or more of smokeless tobacco.
This should include all smokeless tobacco product units distributed for free, whether
through sampling, coupons for free product, “buy two, get one free” type offers, or
otherwise, as long as such smokeless tobacco product units were not reported as sold in
response to Question 6, above. Each unit given away should be reported in the smallest
size package in which it could have been given away to consumers.
9.

Report the dollar amount expended in calendar year [XXXX] by the Company on
smokeless tobacco advertising, merchandising, or promotion in the United States in each
category specified in fields 6-34 of Datafile No. 2.5 This request is in addition to the
request for the electronic Datafile.

10.

A.

State whether the Company or any other persons working for or on behalf of the
Company paid any money or compensation, or made any other contribution
(including, but not limited to, goods or services, including free smokeless
tobacco) in connection with any production or filming of any motion picture(s) or
television show(s) during calendar year [XXXX]. If so, please identify those

vessel or aircraft of the Armed Forces of the United States, as supplies, for consumption beyond
the jurisdiction of the internal revenue laws of the United States.
5

For the purposes of this Order, the term “advertising” refers to all activities relating to
smokeless tobacco that are intended or likely to be seen or heard by members of the public,
regardless of whether they refer or relate to a brand or brands of smokeless tobacco.
The term “smokeless tobacco advertising” does not refer to and should not be construed
to include: (a) company or divisional names, when used as such, other than in an advertisement
relating to smokeless tobacco; (b) signs on factories, plants, warehouses and other facilities
related to the manufacture or storage of smokeless tobacco; (c) corporate or financial reports; (d)
communications to security holders of the Company and to others who customarily receive such
communications; (e) employment advertising; or (f) advertisements directed to youth or their
parents that are intended to reduce youth use of smokeless tobacco products.
Furthermore, for the purposes of this Order, the phrase “advertising, merchandising, or
promotion in the United States” shall include all advertising, merchandising, or promotion: (a)
within the United States; or (b) to members of the Armed Forces of the United States.
4

show(s) or movie(s), and the dollar value of each payment or contribution.

11.

B.

State whether the Company or any other persons working for or on behalf of the
Company paid any money or compensation, or made any other contribution
(including, but not limited to, goods or services, including free smokeless
tobacco) during calendar year [XXXX] to any individual, partnership, or
corporation engaged in the business of product placement in motion pictures or
television shows. If so, please identify: the person who made the contribution;
the recipient of the payment or contribution; the nature and amount of the
payment or contribution; and the name of each and every motion picture or
television show in which any of the Company’s smokeless tobacco products or
smokeless tobacco brand imagery appeared in return for such payment or
contribution.

C.

State whether the Company or any other persons working for or on behalf of the
Company sought or solicited the appearance of any smokeless tobacco product or
any smokeless tobacco brand imagery in any motion picture(s) or television
show(s) during calendar year [XXXX]. If so, please identify those show(s) or
movie(s).

D.

State whether the Company or any other persons working for or on behalf of the
Company granted approval or otherwise gave permission for the appearance of
any smokeless tobacco product or any smokeless tobacco brand imagery in any
motion picture(s) or television show(s) during calendar year [XXXX]. If so,
please state which show(s) or movie(s).

E.

State whether the Company or any other persons working for or on behalf of the
Company sought or solicited the appearance of any smokeless tobacco product or
any smokeless tobacco brand imagery, or granted approval or otherwise gave
permission for the appearance of any smokeless tobacco product or any smokeless
tobacco brand imagery, in any video appearing on the Internet, including, but not
limited to, sites providing user-generated content, during calendar year [XXXX].
If so, please provide the name of the video(s), the name of the site on which the
video(s) appeared, and the Uniform Resource Locator (“URL”) for each video.

F.

State whether the Company or any other persons working for or on behalf of the
Company engaged in social media marketing that promoted any smokeless
tobacco brand or variety, or that used any smokeless tobacco brand imagery, in
calendar year [XXXX]. If so, please identify each type of social media
marketing used, including, but not limited to, social networking sites,
microblogging sites, content-sharing sites, and blogs.

To the extent that such information is possessed by the Company or any other persons
working for or on behalf of the Company, identify each and every televised event that
was aired in calendar year [XXXX] during which the name, logo, or an image of any
5

portion of the package of any brand or variety of smokeless tobacco product sold by the
Company appeared on television through televised coverage of sponsored events, teams,
or individuals.
12.

[State whether the Company or any other persons working for or on behalf of the
Company incurred any expenditures during calendar year [XXXX] in connection with
public entertainment events (including, but not limited to, concerts and sporting events)
bearing or otherwise displaying the name of the Company or any variation thereof but not
bearing or otherwise displaying the name, logo, or an image of any portion of the
package of any of its smokeless tobacco products or otherwise referring or relating to
smokeless tobacco. If so, please report the total amount of such expenditures during
calendar year [XXXX], including all expenditures made by the Company in promoting
and/or sponsoring such events.]

13.

Report the dollar amount expended during calendar year [XXXX] by the Company in the
United States on advertisements directed to youth or their parents that are intended to
reduce youth use of smokeless tobacco.6

For items 5-13, above, if the responsive information exists only within subsidiaries, it is
permissible to submit separate reports from each subsidiary with responsive information
subscribed and sworn to by an official of each such subsidiary, who has prepared or supervised
the preparation of the report from books, records, correspondence, and other data and material in
its possession. In such case, an official of [company] still must submit a report subscribing and
swearing that the subsidiaries’ reports submitted constitute all relevant information for
[company] and its subsidiaries, and that no contrary information exists. The written report or
reports may be submitted either in paper form or as a .pdf file. In either case, the paper
document(s) or the .pdf file(s) must include the signature(s) of the above-referenced official(s)
attesting to the accuracy of the Company’s report.
INSTRUCTIONS FOR COMPLETING THE SMOKELESS TOBACCO REPORT
DATAFILES
The Commission requests that information be produced by the Company in spreadsheet
format (readable by Microsoft Excel).
The Commission is requesting that sales data and data on smokeless tobacco advertising,
merchandising, and promotion be reported in separate datafiles. The instructions below provide
detailed information on how to complete the two datafiles.

6

For purposes of this Order, the terms “youth” and “underage” mean persons younger than
18 years of age.
6

DATAFILE NO. 1
INSTRUCTIONS FOR COMPLETING DATAFILE NO. 1
Sales data and certain other information are to be reported in Datafile No. 1 separately for
each variety of smokeless tobacco produced by the Company.7 For Datafile No. 1, the
Commission is requesting data only at the variety level, rather than at the brand level. There
should not be an “Overall brand” record.8
Information for each brand variety of smokeless tobacco sold in the United States by the
Company during calendar year [XXXX] (including brand varieties sold in a test market or on a
limited market basis) should be entered as a separate entry.
There are 21 separate pieces of information (“fields”) requested on Datafile No. 1 for
each brand variety.
FIELD DEFINITIONS FOR DATAFILE NO. 1:
(1)
YEAR COVERED: Refers to the calendar year for which data or other information is
being reported. Entered as “20XX”.
The next three fields in the record will be used to create a unique identifier for each brand
variety of smokeless tobacco. The Company should enter the Company Code; the Commission
will enter the brand and variety identification codes.
(2)

COMPANY CODE: Enter assigned letter:
Reynolds American
Swisher
North Atlantic

A
B
C

7

For purposes of this Order, the term “brand” means smokeless tobacco products that bear
a common identifying name or make, regardless of whether the products are differentiated by
size or packaging; and the term “variety” refers to characteristics that differentiate products
within a brand family, such as whether the product is snuff or chewing tobacco, or is regular or
flavored.
In the case of generic and private label smokeless tobacco products, “brand variety”
refers to all indistinguishable products produced by a single manufacturer or its affiliates or
imported by a single importer or its affiliates.
8

Thus, a brand with one variety will have one record specific to that one variety; a brand
with 20 varieties will have 20 records.
7

Swedish Match
Altria
(3)

F
G

BRAND NUMBER: FTC will assign these numbers.

(4)

VARIETY CODE: FTC will assign these numbers.
The next three fields include the brand name and characteristics that make the variety
unique. These are:
(5)
BRAND NAME: Refers to the brand identified on the packaging or in advertising. If
the product is generic or private label, indicate “GENERIC” and complete a separate record for
each distinct variety.
(6)
PRODUCT TYPE: Refers to the type of product, that is, moist or scotch snuff,
looseleaf, or plug chewing tobacco, etc. The Commission has assigned a code letter for various
product types. Enter the appropriate letter:
Looseleaf
Chewing Tobacco
Plug
Twist
Scotch Snuff
Dry Snuff
Moist Snuff
Snus
Dissolvable
Other

A
B
C
D
E
F
G
H
I
J

(7)
VARIETY DESCRIPTION: Refers to any additional description as identified on the
packaging or in advertising. The description typically includes characteristics such as grade of
tobacco, flavor, and other advertised characteristics of the product.
The next 14 fields are used to record the net pounds sold, the net dollar value of those
sales, the net number of units sold of each size category, the net number of units given away of
each size category, and any starting or ending dates. Each unit sold should be reported in just
one size category and should be reported in the smallest size category in which the unit could
have been sold to consumers.
(8)
POUNDS SOLD: Report one figure for total pounds of the brand variety sold in the
United States during calendar year [XXXX], net of the number of pounds of this variety that
were returned. Include smokeless tobacco given for free to retailers for subsequent sale to
consumers. Please round to the nearest whole pound.
(9)
DOLLAR SALES: Report one figure for the dollar value of this variety’s sales in the
United States during calendar year [XXXX], net of the value of this variety’s returns. Please
8

report in actual dollars, not in thousands or millions.
(10) UNITS SOLD-A: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing less than one ounce of
smokeless tobacco, net of the number of units that were returned. This includes units given for
free to retailers for subsequent sale to consumers.
(11) UNITS SOLD-B: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing at least one ounce and less
than two ounces of smokeless tobacco, net of the number of units that were returned. This
includes units given for free to retailers for subsequent sale to consumers.
(12) UNITS SOLD-C: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing at least two ounces and less
than five ounces of smokeless tobacco, net of the number of units that were returned. This
includes units given for free to retailers for subsequent sale to consumers.
(13) UNITS SOLD-D: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing at least five ounces and less
than ten ounces of smokeless tobacco, net of the number of units that were returned. This
includes units given for free to retailers for subsequent sale to consumers.
(14) UNITS SOLD-E: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing at least ten ounces and less
than fifteen ounces of smokeless tobacco, net of the number of units that were returned. This
includes units given for free to retailers for subsequent sale to consumers.
(15) UNITS SOLD-F: Report the number of individual units of the brand variety sold in the
United States during calendar year [XXXX] in packages containing fifteen ounces or more of
smokeless tobacco, net of the number of units that were returned. This includes units given for
free to retailers for subsequent sale to consumers.
(16) UNITS GIVEN-A: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing less than one
ounce of smokeless tobacco, net of the number of units that were returned.
(17) UNITS GIVEN-B: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing at least one
ounce and less than two ounces of smokeless tobacco, net of the number of units that were
returned.
(18) UNITS GIVEN-C: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing at least two
ounces and less than five ounces of smokeless tobacco, net of the number of units that were
returned.
9

(19) UNITS GIVEN-D: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing at least five
ounces and less than ten ounces of smokeless tobacco, net of the number of units that were
returned.
(20) UNITS GIVEN-E: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing at least ten
ounces and less than fifteen ounces of smokeless tobacco, net of the number of units that were
returned.
(21) UNITS GIVEN-F: Report the number of individual units of the brand variety given
away in the United States during calendar year [XXXX] in packages containing fifteen ounces or
more of smokeless tobacco, net of the number of units that were returned.
DATAFILE NO. 2
INSTRUCTIONS FOR COMPLETING DATAFILE NO. 2:
The next 34 fields are used to record “Reportable Expenditures,” that is, smokeless
tobacco advertising, merchandising, and promotional expenditures in the United States for the
specific categories requested by the FTC, as well as the total and sporting events totals. Please
provide information for items 6-34 in thousands of dollars. Expenditures may be rounded to the
nearest thousand dollars. For example, $1,234,567 should be reported as either 1234.567 or
1235, not as 1234567.
The Commission is requesting that expenditures on smokeless tobacco advertising,
merchandising, or promotion in the United States be reported only at the brand level, rather than
at the variety level.
The Commission is also requesting that expenditures on smokeless tobacco advertising,
merchandising, or promotion in the United States that are not attributable to or in connection
with any specific brand be reported in a “Non-brand specific” record. Examples of such
expenditures might include, among others, Category A expenses advertising or promoting all
smokeless tobacco generally or all of the Company’s smokeless tobacco products but not any
specific brand of smokeless tobacco and Category W expenses.
To the extent practicable, third-party agency fees relating to smokeless tobacco
advertising, merchandising, or promotion should be reported in the categories of advertising or
promotion to which those fees relate. For example, agency fees related to magazine advertising
should be reported in Category B, agency fees related to point-of-sale advertising should be
reported in Category F, and agency fees related advertising on any Company’s web site should
be reported in Category W. To the extent that third-party agency fees relating to smokeless
tobacco advertising, merchandising, or promotion cannot be divided based on the materials to
which they relate, they should be reported in Category AA.

10

FIELD DEFINITIONS FOR DATAFILE NO. 2:
(1)
YEAR COVERED: Refers to the calendar year for which data or other information is
being reported. Entered as “20XX”.
The next two fields in the record will be used to create a unique identifier for each brand
of smokeless tobacco. The Company should enter the Company Code; the Commission will
enter the brand identification code.
(2)

COMPANY CODE: Enter assigned letter:
Reynolds American
Swisher
North Atlantic
Swedish Match
Altria

A
B
C
F
G

(3)
BRAND NUMBER: FTC will assign these numbers. For the “Non-brand specific”
record, enter the value 99.
(4)
BRAND NAME: Refers to the brand identified on the packaging or in advertising. If
the product is generic or private label, indicate “GENERIC.”
(5)
PRODUCT TYPE: Refers to the brand’s product type, that is, moist or scotch snuff,
looseleaf, or plug chewing tobacco, etc. The Commission has assigned a code letter for various
product types. If a brand has varieties of more than one product type, but the varieties of any
one product type represent 95 percent or more of the brand’s dollar sales, report that product
type; otherwise, report “M” for “Multiple” product types. Enter the appropriate letter:
Looseleaf
Chewing Tobacco
Plug
Twist
Scotch Snuff
Dry Snuff
Moist Snuff
Snus
Dissolvable
Other
Multiple

A
B
C
D
E
F
G
H
I
J
M

(6)
CAT-A-EXP (Category-A Expenses): Newspaper advertising but excluding, if
practicable, those expenditures covered by Categories L through V, which should be reported in
those categories.

11

(7)
CAT-B-EXP (Category-B Expenses): Magazine advertising but excluding, if
practicable, those expenditures covered by Categories L through V, which should be reported in
those categories.
(8)
CAT-C-EXP (Category-C Expenses): Outdoor advertising but excluding, if practicable,
those expenditures covered by Categories L through V, which should be reported in those
categories. “Outdoor advertising” means (1) billboards, (2) signs and placards in arenas,
stadiums, and shopping malls, whether any of the foregoing are open-air or enclosed, and (3) any
other advertisements placed outdoors regardless of their size, including those on smokeless
tobacco product retailer property.
(9)
CAT-D-EXP (Category-D Expenses): All expenditures for audio-visual or video
advertising on any medium of electronic communication not subject to the jurisdiction of the
Federal Communications Commission. This category includes, but is not limited to,
advertisements on: screens at motion picture theaters, television screens or monitors in
residential dwellings, as in certain televised programs and through video cassette or DVD
entertainment products; and television screens or monitors in commercial establishments, such as
video arcades. This category does not include expenditures for advertising on the Internet,
which should be reported in Categories W or X below.
(10) CAT-E-EXP (Category-E Expenses): Direct mail advertising but excluding, if
practicable, those expenditures covered by Categories L through V or Category X, which should
be reported in those categories.
(11) CAT-F-EXP (Category-F Expenses): Point-of-sale advertising, that is materials
displayed or distributed at a retail location, but excluding, if practicable, those expenditures
covered by Category C or Categories L through V, which should be reported in those categories.
(12) CAT-G-EXP (Category-G Expenses): Price discounts paid to smokeless tobacco
product retailers in order to reduce the price of smokeless tobacco products to consumers,
including off-invoice discounts, buy downs, voluntary price reductions, and trade programs, but
excluding retail value added expenditures for promotions involving free smokeless tobacco
products (e.g., buy two, get one free) covered by Category U and expenditures involving
coupons covered by Category T, which should be reported in those categories.
(13) CAT-H-EXP (Category-H Expenses): Price discounts paid to smokeless tobacco
product wholesalers in order to reduce the price of smokeless tobacco products to consumers,
including off-invoice discounts, buy downs, voluntary price reductions, and trade programs, but
excluding retail value added expenditures for promotions involving free smokeless tobacco
products (e.g., buy two, get one free) covered by Category U and expenditures involving
coupons covered by Category T, which should be reported in those categories.
(14) CAT-I-EXP (Category-I Expenses): Promotional allowances paid to smokeless tobacco
product retailers in order to facilitate the sale or placement of any smokeless tobacco product,
including payments for stocking, shelving, displaying and merchandising brands, volume
12

rebates, incentive payments, and the cost of smokeless tobacco product given for free to retailers
for subsequent sale to consumers but excluding, if practicable, those expenditures covered by
Categories A through H, which should be reported in those categories.
(15) CAT-J-EXP (Category-J Expenses): Promotional allowances paid to smokeless tobacco
product wholesalers in order to facilitate the sale or placement of any smokeless tobacco product,
including payments for volume rebates, incentive payments, value added services, promotional
execution and satisfaction of reporting requirements but excluding, if practicable, those
expenditures covered by Categories A through I, which should be reported in those categories.
(16) CAT-K-EXP (Category-K Expenses): Promotional allowances paid to any persons other
than retailers, wholesalers, and full-time company employees who are involved in the smokeless
tobacco product distribution and sales process in order to facilitate the sale or placement of any
smokeless tobacco product but excluding, if practicable, those expenditures covered by
Categories A through J, which should be reported in those categories.
(17) CAT-L-EXP (Category-L Expenses): Sampling of smokeless tobacco products,
including the costs of the smokeless tobacco products themselves, all associated excise taxes,
and the costs of organizing, promoting, and conducting sampling. Sampling includes the
distribution of smokeless tobacco products for consumer testing or evaluation when consumers
are able to use the smokeless tobacco products outside of a facility owned or operated by the
Company or its agents, but the cost of actual clinical testing or market research associated with
such smokeless tobacco product distributions should not be reported. Coupons distributed for
free smokeless tobacco product, with no purchase or payment required to obtain the coupons or
smokeless tobacco product, should be reported in this category. When reporting expenses
associated with such coupons for free smokeless tobacco product, the value reported should
include: (a) the total redemption expense (including expenses for payments to retailers or
vendors for processing) for such coupons in the calendar year, as determined under Generally
Accepted Accounting Principles; and (b) all other costs associated with such coupons incurred in
the calendar year, including but not limited to costs associated with advertising, promotion,
design, printing, and distribution.
(18) CAT-M-EXP (Category-M Expenses): All costs of consumer engagement at smokeless
tobacco product retail locations open to underage individuals, including any third-party agency
fees, but excluding the cost of coupons or samples distributed in the course of consumer
engagement activities. Whenever such activities are combined with the distribution of coupons
for the reduction of the retail cost of smokeless tobacco products, the expenditures associated
with those coupons should be reported solely in Category T.
(19) CAT-N-EXP (Category-N Expenses): All costs of distributing any items (other than
smokeless tobacco products, items the sole function of which is to advertise or promote
smokeless tobacco products, or written or electronic publications), whether distributed by sale,
redemption of coupons, or otherwise, that do not bear the name, logo, or an image of any portion
of the package of any brand or variety of smokeless tobacco product sold by the Company. The
expenditures reported in this category should be the net cost to the Company, i.e., payments
13

received from consumers for such items should be deducted. Whenever such activities are
combined with smokeless tobacco product sampling, the expenditures connected therewith
should be reported solely in Category L. When such activities are combined with the sale of
smokeless tobacco products, such as when a non-smokeless tobacco product item is
blister-packed to a package or packages of smokeless tobacco products, the expenditures
connected therewith should be reported solely in Category V.
(20) CAT-O-EXP (Category-O Expenses): Public entertainment events bearing or otherwise
displaying the name or logo or an image of any portion of the package of any of the Company’s
smokeless tobacco products or otherwise referring or relating to smokeless tobacco, that take
place in an adult-only facility. Such events must include entertainment, as opposed to simply
consumer engagement. For the purposes of this Order, the term “adult-only facility” means a
facility or restricted area (whether open-air or enclosed) where the operator ensures or has a
reasonable basis to believe that no underage person is present. A facility or restricted area need
not be permanently restricted to adults in order to constitute an adult-only facility, provided that
the operator ensures or has a reasonable basis to believe that no underage person is present
during the event or time period in question. This item includes all expenditures made by the
Company in promoting and/or sponsoring such events. Whenever such activities are combined
with the consumer engagement in adult only facilities, the expenditures connected with
consumer engagement should be reported solely in Category Q.
(21) CAT-P-EXP (Category-P Expenses): Public entertainment events (including, but not
limited to, concerts and sporting events) bearing or otherwise displaying the name, logo, or an
image of any portion of the package of any of the Company’s smokeless tobacco products or
otherwise referring or relating to smokeless tobacco, that do not take place in an adult-only
facility. Such events must include entertainment, as opposed to simply consumer engagement.
This item includes all expenditures made by the Company in promoting and/or sponsoring such
events.
(22) CAT-Q-EXP (Category-Q Expenses): All costs of consumer engagement of smokeless
tobacco users in adult-only facilities, including any third-party agency fees, but excluding the
cost of coupons distributed. Whenever such activities are combined with smokeless tobacco
product sampling (including the distribution of coupons for free smokeless tobacco), the
expenditures associated with the sampling should be reported solely in Category L. Whenever
such activities are combined with the distribution of coupons for the reduction of the retail cost
of smokeless tobacco products, the expenditures connected with those coupons should be
reported solely in Category T.
(23) CAT-R-EXP (Category-R Expenses): Endorsements, testimonials, and product
placement. This item includes, but is not limited to, all expenditures made to procure smokeless
tobacco use, or the mention of a smokeless tobacco product or company name, or the appearance
of a smokeless tobacco product or name, logo, or package, in any situation (e.g., motion picture,
television show or program, stage show, public appearance by a celebrity) where such use,
mention, or appearance may come to the attention of the public.

14

(24) CAT-S-EXP (Category-S Expenses): Sponsorship of sports teams or individual athletes
but excluding, if practicable, those expenditures covered by Category R, which should be
reported in that category. “Sports teams or individual athletes” includes, but is not limited to,
competitors in football, basketball, baseball, hockey, tennis, wrestling, karate, judo, weight
lifting, volleyball, skiing, skating, sailing, boating, equestrian, rodeo, automobile, race car, funny
car, motorcycle, bicycle, truck, monster truck, tractor-pull, fishing, and hunting events,
competitions, tournaments, and races.
(25) CAT-T-EXP (Category-T Expenses): All expenditures and costs associated with
coupons for the reduction of the retail cost of smokeless tobacco products (whether distributed in
person, by mail, online, or otherwise and whether redeemed at the point of sale, by mail, online,
or otherwise), including: (a) the total redemption expense (including expenses for payments to
retailers or vendors for processing) for such coupons in the calendar year, as determined under
Generally Accepted Accounting Principles; and (b) all other costs associated with such coupons
incurred in the calendar year, including but not limited to costs associated with advertising,
promotion, design, printing, and distribution. Coupons distributed for free smokeless tobacco
products, with no purchase or payment required to obtain the coupons or smokeless tobacco
products, should be reported in Category L. Redemption costs should include any payments to
retailers above the face value of the coupons.
(26) CAT-U-EXP (Category-U Expenses): Retail value added expenditures for promotions
involving free smokeless tobacco (e.g., buy two, get one free), whether or not the free smokeless
tobacco is physically bundled together with the purchased smokeless tobacco, including all
expenditures and costs associated with the value added to the purchase of smokeless tobacco
(e.g., all associated excise taxes paid on the free smokeless tobacco).
(27) CAT-V-EXP (Category-V Expenses): Retail value added expenditures for promotions
involving free non-smokeless tobacco product (e.g., buy two, get a key chain or buy two, save 20
cents per gallon of gasoline) including all expenditures and costs associated with the value added
to the purchase of smokeless tobacco.
(28) CAT-W-EXP (Category-W Expenses): All expenditures for advertising on any
Company Internet web site that can be accessed by computers located in the United States,
regardless of where the site is located or the Internet address of the site or page. This category
includes, but is not limited to, expenditures on smokeless tobacco brand web sites.
(29) CAT-X-EXP (Category-X Expenses): All expenditures for advertising on the Internet,
other than on the Company’s own Internet web sites, including, but not limited to, the World
Wide Web, commercial online services, and electronic mail messages, but excluding, if
practicable, those expenditures covered by Category Z, which should be reported in that
category. This category includes, but is not limited to: spending on all Internet sites and pages,
hyperlinks and banners on third-party sites, newsgroups, and online advertisements that can be
accessed by computers located in the United States, regardless of where the site is located or the
Internet address of the site or page; all direct mail advertising using electronic mail messages;
and all sites and pages, hyperlinks and banners on third-party sites, newsgroups, or electronic
15

mail messages that include the name, logo, symbol, motto, or selling message of a brand of
smokeless tobacco products, or are referred to in any other smokeless tobacco advertisement,
regardless of whether the site, page, hyperlink, banner, or electronic mail message is promoting
the sale of smokeless tobacco. Expenditures include but are not limited to the cost of
developing, creating, maintaining, monitoring, and updating the site, page, banner, or other form
of online advertising, whether located on systems maintained by the Company or by third-party
advertisers, commercial online services, or Internet World Wide Web host providers.
(30) CAT-Y-EXP (Category-Y Expenses): All expenditures for telephone advertising. This
category includes, but is not limited to, costs associated with the placement of telemarketing calls
or the maintenance or operation of incoming telephone lines that allow consumers to participate
in any promotion or hear pre-recorded product messages, but excludes costs associated with
having customer service representatives available for responding to consumer complaints or
questions.
(31) CAT-Z-EXP (Category-Z Expenses): All expenditures for social media marketing on
web sites or other online services or communities, including, but not limited to, social
networking sites, microblogging sites, content-sharing sites, and blogs.
(32) CAT-AA-EXP (Category-AA Expenses): Any advertising or promotional expenditures
not covered by another reporting category. Specify the total amount on the written report and
briefly describe the specific subject matter of each such expenditure.
(33) TOT-ADV-EXP (Total Reportable Expenditures): Refers to reportable expenditures for
the brand as defined in the appropriate explanatory notes. The figure provided for total
reportable expenditures should equal the sum of the expenses listed in Categories A through AA
for the brand.
(34) SPORTS-EXP (Sports and Sporting Events): Report all advertising and promotional
expenditures connected with or related to sports or sporting events, including but not limited to:
(i) the sponsoring, advertising, or promotion of sports or sporting events, including any racing or
automotive events, support of an individual, group, sports, or racing team, and purchase of or
support for sports or racing equipment, uniforms, sports or racing facilities and or training
facilities; (ii) all expenditures for advertising including, but not limited to, print, television, radio,
billboards, banners, etc. in the name of the Company or any of its smokeless tobacco product
brands in a sports or racing facility, on a scoreboard or in conjunction with the reporting of sports
or racing results; (iii) all expenditures connected with the production, offer, sale, or provision
without fee of all functional promotional items at or in connection with a sporting or racing
event, including, but not limited to, clothing, hats, bags, posters, sporting or racing goods, and
equipment; and (iv) all expenditures associated with smokeless tobacco product sampling or
consumer engagement in connection with a sporting event, including sampling or consumer
engagement in an adult-only facility in the grounds or parking lot of a sports facility.
The expenditures reported in this category are intended to be duplicative of expenditures listed
above on lines 6-32 and totaled on line 33. Do not report any expenditures on this line that have
16

not also been reported on lines 6-32. For example, sponsorship of a sporting event that is
reported on line 21 would also be reported on line 34; and a miscellaneous expenditure for
sponsoring a sports or racing team would be reported on lines 24 and 34. “Sports and sporting
events” includes, but is not limited to, football, basketball, baseball, hockey, tennis, wrestling,
karate, judo, weight lifting, volleyball, skiing, skating, sailing, boating, equestrian, rodeo,
automobile, race car, funny car, motorcycle, bicycle, truck, monster truck, tractor-pull, fishing,
and hunting events, competitions, tournaments, and races.
OTHER EXPLANATORY NOTES FOR DATAFILE NO. 2
Reportable expenditures, that is, expenditures on lines 6-32, should be included in only
one category, except for any amounts also reported on line 34 (sports). Expenditures on lines
6-32 should equal the total on line 33, and should reflect the cost to the Company of
administering the activity involved, including commissions and other payments made to separate
organizations such as advertising agencies. In addition, expenditures reported on lines 6-34
should include all expenditures for advertising and promotion relating to smokeless tobacco
regardless of whether the advertising or promotion would constitute “commercial speech” or
would be protected from law enforcement action by the First Amendment. However, such
expenditures should not include the compensation of full-time employees of the Company or any
overhead expenses attributable to the activities of company employees.
The financial accounting procedure to be used in assigning an expenditure to a particular
calendar year should be the accrual rather than the cash basis of accounting.
You are advised that penalties may be imposed under applicable provisions of federal law
for failure to file special reports or for filing false reports.

17

The Special Report called for in this Order is to be filed on or before [date].
By direction of the Commission.

__________________________________
Maureen K. Ohlhausen, Acting Chairman
SEAL

Date of Order: [date]
The Report required by this Order, or any inquiry concerning it, should be addressed to:
Michael Ostheimer
Federal Trade Commission
Division of Advertising Practices
600 Pennsylvania Avenue, N.W., Mailstop CC-10528
Washington, D.C. 20580
mostheimer@ftc.gov

18