By: Azhar Azam
Pounding all the harmful and fatal consequences of tobacco; tobacco industry yet pivots substantial economic contributions to many countries around the world. The livelihoods of millions of people are associated with this toxic industry including farmers, retailers, and the employments in the tobacco supply chain.
Albeit nearly all the countries have enforced strict laws – such as plain packaging, product specific regulation, smoking ban at public placed, constraints on outlets to display tobacco products and restrictions on manufacturing, sale, and marketing of tobacco products – to prevent people from smoking; the value of global cigarette market continues to grow despite decline in global industry cigarette volume.
Global Cigarette Market
The global tobacco market is estimated at an eye-watering value of $770 billion a year; nearly 91% or $700 billion is derived from cigarettes consumption worldwide. And there are about one billion adult smokers consume 5,600 billion cigarettes a year.
There are many types of tobacco products available in the bazaar worldwide; however, cigarettes remain the pick of the tobacco products for the global tobacco consumers. Fine-cut, cigars, pipe tobacco, snuff, chewing tobacco, and water-pipe tobacco are some of the other products which continue to temp the consumers.
In addition, Next Generation Products (NGP) – alternative tobacco and nicotine products uttered to reducing the risks associated with smoking conventional cigarettes – are making their footprints in the global tobacco market.
e-Vapor or e-Cigarettes is one of the fastest growing next generation emerging products that contain no tobacco and deliver nicotine to consumers in the form of vapor. Many scientists believe them to be 95% less-harmful than smoking the conventional cigarettes.
There are Tobacco Heating Products in the marketplace as well which heat tobacco to release the nicotine (not at a temperature to burn it) to drastically lowering the levels of toxicants. The market value of these NGPs is estimated at over $18.0 billion by 2020.
Where many countries are benefiting economically from tobacco industry; excessive regulations such as abrupt increase in excise rates have forced tobacco consumers to switch over to cheaper brands and also plugging illegal trafficked products. This illegal market of tobacco products is estimated at about 460 billion cigarettes; over 8.2% of the total market.
Largest Tobacco Markets in World
CNTC primarily targets domestic market that consumes nearly 99% of its tobacco production. Headquartered in Beijing, it employees 510,000 people. The Chinese market basically comprises of low-priced cigarettes as up to 75% of China’s population resides in rural farming areas and cannot afford to buy high or even mid-priced cigarettes, according to a study conducted by KEN Research.
By the end of 2015, China’s national tobacco industry’s operating income increase by $18.4 billion (4.2%) and prodigious revenue of $183.8 billion. If CNTC is in Fortune 500; it will be ranked 6th much higher than the likes of Amazon, General Electric, J.P. Morgan Chase, Alphabet (Google), Microsoft, Johnsons and Johnsons, and many other world’s largest companies.
China’s State Tobacco Monopoly Bureau (STMB) says that the country sold 4.7 billion cigarettes (excluding cigars) in 2016; 5.6% less than the previous year. It also stated that the country revenue also fell 3.6% to 1,370.6 billion yuan.
Top Market Players (Excluding China)
Leading Cigarette Brands in World
“Marlboro is complimented in the premium-price category by the Parliament and Virginia S.” Furthermore, according to an estimate by PMI, over 2.9 million consumers have switched to IQOS, company’s first Heat-Not-Burn product.
PMI produced net revenue of $75.0 billion and net earnings of $7.3 billion in FY2016. The company shipped a total of 813.0 billion units in FY2016 out of global estimation of 5.3 trillion cigarettes in 2016; Marlboro (281.7bn), L&M (96.8bn), Parliament (45.7bn), Bond Street (44.6bn), Chesterfield (46.3bn), Philip Morris (36.0bn), Lark (27.6bn), and others (234.4bn). PMI also have a number of local cigarette brands in various countries. It staffs 79,500 employees as of FY2016.
JTI posted revenue of $14.8 billion and operating profit of $4.5 billion in FY2016. Launched in 1954, Winston became the second largest selling brand worldwide in 2007 and is sold in 120 countries. Its volume grew 5.5% to 139.3 billion units in 2016.
Camel (52.2bn), LD (47.6bn), Mevius (17.9bn), and Benson and Hedges are some of other JTI’s Global Flagship Brands (GFB) major brands besides Mild Seven, Silk Cut, Sobraine, Glamour, and Natural American Spirit. In 2016, JTI acquired Reynolds American’s Natural American Spirit business outside of the United States.
Pall Mall (3rd), Kent (8th), and Dunhill (9th) are the top selling brands of British American Tobacco (BAT). In FY2016, BAT’s Dunhill market share remained flat whereas its shipment volume fell from 59bn to 57bn year-over-year, driven mainly by industry declines in Malaysia and Brazil.
The volume of Pall Mall, third biggest international brand, and Kent also remained flat at 92bn and 66bn respectively for the year. Lucky Star (36bn) and Rothmans (73bn) however recorded growth of 13.5% and 36.9%. In FY 2016, BAT reported revenue of $10.9 billion and profit from operations of $3.4 billion.
Pakistan Cigarette Market
Pakistan Tobacco Company (PTC), a subsidiary of British American Tobacco (BAT) is the largest cigarette manufacturer in Pakistan. In 2016, although the company cigarette volume dropped 15.6% to 36.1 billion sticks but net turnover and profit from operations rose 4.6% to PKR44.9 billion and 45.1% to PKR10.4 billion respectively.
The largest tobacco company in Pakistan referred retail audit data indicating the size of illicit sector increased from 30.6% to 40.6% of the total Pakistan cigarette market. In the premier segment, John Player Gold Leaf (JPGL) delivered sustainable growth and rebounded to recapture a market share of 15% in Pakistan. Dunhill, Benson and Hedges, Capstan by Pall Mall, Gold Flake and Embassy are its other eminent brands.
Philips Morris (Pakistan) Limited is the other cigarette manufacturing company which posted revenue of PKR40.3 billion and net profit of 545 million in 2016. The company, in collaboration with Philip Morris International (PMI), produced a total of 12.3 million cigarettes in Pakistan. Morven by Chesterfield, Marlboro, Diplomat, Philip Morris, and Red & White are its main brands.
Pounding all the harmful and fatal consequences of tobacco; tobacco industry yet pivots substantial economic contributions to many countries around the world. The livelihoods of millions of people are associated with this toxic industry including farmers, retailers, and the employments in the tobacco supply chain.
Albeit nearly all the countries have enforced strict laws – such as plain packaging, product specific regulation, smoking ban at public placed, constraints on outlets to display tobacco products and restrictions on manufacturing, sale, and marketing of tobacco products – to prevent people from smoking; the value of global cigarette market continues to grow despite decline in global industry cigarette volume.
Global Cigarette Market
The global tobacco market is estimated at an eye-watering value of $770 billion a year; nearly 91% or $700 billion is derived from cigarettes consumption worldwide. And there are about one billion adult smokers consume 5,600 billion cigarettes a year.
There are many types of tobacco products available in the bazaar worldwide; however, cigarettes remain the pick of the tobacco products for the global tobacco consumers. Fine-cut, cigars, pipe tobacco, snuff, chewing tobacco, and water-pipe tobacco are some of the other products which continue to temp the consumers.
In addition, Next Generation Products (NGP) – alternative tobacco and nicotine products uttered to reducing the risks associated with smoking conventional cigarettes – are making their footprints in the global tobacco market.
e-Vapor or e-Cigarettes is one of the fastest growing next generation emerging products that contain no tobacco and deliver nicotine to consumers in the form of vapor. Many scientists believe them to be 95% less-harmful than smoking the conventional cigarettes.
There are Tobacco Heating Products in the marketplace as well which heat tobacco to release the nicotine (not at a temperature to burn it) to drastically lowering the levels of toxicants. The market value of these NGPs is estimated at over $18.0 billion by 2020.
Where many countries are benefiting economically from tobacco industry; excessive regulations such as abrupt increase in excise rates have forced tobacco consumers to switch over to cheaper brands and also plugging illegal trafficked products. This illegal market of tobacco products is estimated at about 460 billion cigarettes; over 8.2% of the total market.
Largest Tobacco Markets in World
China is the largest cigarette market that makes up nearly 44.5% of global tobacco consumption, according to JTI estimate; nevertheless, Chinese cigarette market is monopolized by its state-owned institution – China National Tobacco Corporation (CNTC). Russia (5.3%), United States (4.8%), Indonesia (4.4%), and Japan (3.3) are the next four countries with the largest global market share.
China is also the largest producer of the tobacco and nearly 48% of the men in China smoke cigarettes. China National Tobacco Corporation (CNTC) produced a total of 2,490 billion sticks in 2015 – about two-times of its international competitors, Philip Morris International and British American Tobacco.
CNTC primarily targets domestic market that consumes nearly 99% of its tobacco production. Headquartered in Beijing, it employees 510,000 people. The Chinese market basically comprises of low-priced cigarettes as up to 75% of China’s population resides in rural farming areas and cannot afford to buy high or even mid-priced cigarettes, according to a study conducted by KEN Research.
By the end of 2015, China’s national tobacco industry’s operating income increase by $18.4 billion (4.2%) and prodigious revenue of $183.8 billion. If CNTC is in Fortune 500; it will be ranked 6th much higher than the likes of Amazon, General Electric, J.P. Morgan Chase, Alphabet (Google), Microsoft, Johnsons and Johnsons, and many other world’s largest companies.
China’s State Tobacco Monopoly Bureau (STMB) says that the country sold 4.7 billion cigarettes (excluding cigars) in 2016; 5.6% less than the previous year. It also stated that the country revenue also fell 3.6% to 1,370.6 billion yuan.
Top Market Players (Excluding China)
Excluding China, two-third of the global industry cigarette volume is produced by just four tobacco companies – Philip Morris International (26.2%), British American Tobacco (19.1%), Japan Tobacco Inc. (15.8%) and Imperial Brands, earlier Imperial Tobacco Group (8.9%). The global ranking of these major competitors in world cigarette market has remained unchanged for the past few years so as the market share with a slight variation.
Leading Cigarette Brands in World
Marlboro, a brand of Philip Morris International (PMI) that was separated from Altria Group in 2008, is by far the leading international cigarette brand in the world – producing 392.5 billion units in 2015, according to JTI estimate. L&M, another PMI brand, is ranked 4th in the estimate; with production of 108.3 billion units in 2015.
“Marlboro is complimented in the premium-price category by the Parliament and Virginia S.” Furthermore, according to an estimate by PMI, over 2.9 million consumers have switched to IQOS, company’s first Heat-Not-Burn product.
PMI produced net revenue of $75.0 billion and net earnings of $7.3 billion in FY2016. The company shipped a total of 813.0 billion units in FY2016 out of global estimation of 5.3 trillion cigarettes in 2016; Marlboro (281.7bn), L&M (96.8bn), Parliament (45.7bn), Bond Street (44.6bn), Chesterfield (46.3bn), Philip Morris (36.0bn), Lark (27.6bn), and others (234.4bn). PMI also have a number of local cigarette brands in various countries. It staffs 79,500 employees as of FY2016.
JTI posted revenue of $14.8 billion and operating profit of $4.5 billion in FY2016. Launched in 1954, Winston became the second largest selling brand worldwide in 2007 and is sold in 120 countries. Its volume grew 5.5% to 139.3 billion units in 2016.
Camel (52.2bn), LD (47.6bn), Mevius (17.9bn), and Benson and Hedges are some of other JTI’s Global Flagship Brands (GFB) major brands besides Mild Seven, Silk Cut, Sobraine, Glamour, and Natural American Spirit. In 2016, JTI acquired Reynolds American’s Natural American Spirit business outside of the United States.
Pall Mall (3rd), Kent (8th), and Dunhill (9th) are the top selling brands of British American Tobacco (BAT). In FY2016, BAT’s Dunhill market share remained flat whereas its shipment volume fell from 59bn to 57bn year-over-year, driven mainly by industry declines in Malaysia and Brazil.
The volume of Pall Mall, third biggest international brand, and Kent also remained flat at 92bn and 66bn respectively for the year. Lucky Star (36bn) and Rothmans (73bn) however recorded growth of 13.5% and 36.9%. In FY 2016, BAT reported revenue of $10.9 billion and profit from operations of $3.4 billion.
Pakistan Cigarette Market
Pakistan Tobacco Company (PTC), a subsidiary of British American Tobacco (BAT) is the largest cigarette manufacturer in Pakistan. In 2016, although the company cigarette volume dropped 15.6% to 36.1 billion sticks but net turnover and profit from operations rose 4.6% to PKR44.9 billion and 45.1% to PKR10.4 billion respectively.
The largest tobacco company in Pakistan referred retail audit data indicating the size of illicit sector increased from 30.6% to 40.6% of the total Pakistan cigarette market. In the premier segment, John Player Gold Leaf (JPGL) delivered sustainable growth and rebounded to recapture a market share of 15% in Pakistan. Dunhill, Benson and Hedges, Capstan by Pall Mall, Gold Flake and Embassy are its other eminent brands.
Philips Morris (Pakistan) Limited is the other cigarette manufacturing company which posted revenue of PKR40.3 billion and net profit of 545 million in 2016. The company, in collaboration with Philip Morris International (PMI), produced a total of 12.3 million cigarettes in Pakistan. Morven by Chesterfield, Marlboro, Diplomat, Philip Morris, and Red & White are its main brands.