Cigarette Nicotine Limits Economic Impact Study

A study commissioned by NATO and compiled by Chmura Economics and Analytics shows the significant negative economic impact of the proposed FDA rule limiting nicotine content of cigarettes and other combusted tobacco products. The study measures the economic impact on retail sales (tobacco products and ancillary sales), federal excise tax, state and local excise tax and sales tax revenue, jobs, and Master Settlement Agreement payments to the states. The report also details how every single state will be negatively impacted by the proposed FDA rule.

Chmura estimates that the proposed new FDA rule limiting the nicotine content of cigarettes will negatively affect the national tobacco retail industry and the broader economy. Using 2023 data, it is projected that tobacco retailers in the United States will lose $13.9 billion of revenue per year, as well as 95,511 jobs in those retail establishments. Other industries related to retail will also be affected. Adding indirect and induced impacts, the national economy could lose $30.6 billion in economic output per year, with an estimated 154,478 jobs being lost. Federal, state and local governments will also be negatively impacted. Chmura estimates that federal exercise tax on tobacco products will decline by $8.0 billion. In addition, tax revenue for state and local governments will decline by $16.0 billion per year. Moreover, payments to states via the Tobacco Master Settlement Agreement (MSA) and payments to the other four states pursuant to separate settlements will decline by $5.6 billion, with a total revenue loss for state and local governments reaching $21.6 billion per year.

Economic Impact from the Proposed FDA Rule limiting nicotine content in cigarettes

Economic Impact Report: Report

Full Economic Impact Report with Appendix: Report

Appendix to Economic Impact Report: Report