Setting aside the fatal impacts on human health by the use of tobacco, killing 7 million people every year including passive smokers – the global tobacco industry remains pivotal to many economies of the world.
The livelihoods of millions of farmers, manufacturers, retailers, and workers in the curing and processing of tobacco leaves and tobacco supply chain are linked with the lethal-but-lucrative global tobacco industry.
Cigarette is the most widely used form of tobacco – with 1.1 billion of tobacco smokers and accounting for 87% of total tobacco consumption. Asia Pacific region alone accounts for 64% of the global cigarette market.
There are 85,600 factories that manufacture tobacco products – 84,400 are located in Asia; 588 in Americas; 526 in Europe; 120 in Africa; and 6 in Oceania. Nearly 80% of all the smokers live in low and middle-income countries.
Notwithstanding enforcement of strict laws – plain packaging, smoking ban at public places, display constraints on outlets, and restriction on sales and marketing – the global cigarette market is still coping to withstand.
GLOBAL TOBACCO MARKET
The global tobacco market is currently estimated at breathtaking value of $880 billion – 87% of which or about $766 billion comes from the sale of conventional cigarettes, according to PMI tobacco economics.
In addition to more than 350 smokeless users, there are about 1.1billion tobacco consumers worldwide who smoke roughly 5.6 trillion of cigarette sticks and 40 billion of cigars or cigarillos pieces every year.
Smoking prevalence is highest in Serbia (40%) and Latvia (38%) and lowest in Ethiopia (4%) and Eretria (2%). Average cost of 20-sticks cigarette pack is highest in Australia ($16.6) and lowest in Guinea ($0.23).
The average consumption of cigarette sticks in various countries (from highest to lowest) is: Georgia (21); Greece (19); China, Germany, and Argentina (15); Nigeria (8), and Ecuador (6).
TOBACCO EXPORTS
Exports value of tobacco products is amounted at $28 billion – Cigarettes ($20 billion) being the largest; cigars and cigarillos ($2 billion); other smoking tobacco products ($4 billion); and smokeless tobacco products ($1 billion).
Germany, Poland, Singapore, the United States, and the Republic of Korea are the largest exporters of tobacco products – accounting for 42% of all exports. Japan, Italy, France, Saudi Arabia, and Spain are the leading tobacco importers.
TAXATION ON TOBACCO PRODUCTS YIELDS $401 BILLION
The taxation on tobacco products generates $401 billion in revenues for the governments worldwide. Chile (89.1%) has the highest rate of tolls per cigarette while Afghanistan (2.3%) has the lowest.
ILLICIT TOBACCO TRADE
While many economies are reaping great financial advantages from taxes on tobacco products – abrupt increase in excise rates have forced tobacco consumers to switch over to cheaper brands, ploughing the field for illicit trade.
Every year, an estimated of over 484 billion cigarettes are sold illicitly around the world. This illegal trade of counterfeit, smuggled, and non-duty paid cigarettes robs billions of dollars of national coffers.
LARGEST GLOBAL CIGARETTE MANUFACTURERS
China has the largest number of smokers in the world. Cheap cigarettes are widely available in the country, which has addicted nearly one-third of the Chinese adult population and over half of its men.
Its state-owned enterprise, China National Tobacco Corporation (CNTC)’s brands such as Hongtashan, Baisha, and Double Happiness makes up 98% of all tobacco sales in China – depositing up to 11% of national taxes to China treasury.
The CNTC has the largest share in global retail cigarette market (42.6%). In 2017, the company posted record revenue of $208 billion, selling 2,369 billion cigarettes. Its export market share in global cigarette market is though 1% only.
Headquartered in Switzerland, American publicly traded company, Philip Morris International (PMI), has the biggest export share in cigarette market worldwide, accounting for 14.1% of all cigarette international sales.
Excluding the United States, PMI operates in 180 countries and sells 6 of world’s top-15 brands. Its former parent company, Altria’s Philip Morris USA, sells its brands in the US. PMI was separated from Altria in 2008.
In 2017, PMI generated $78 billion in pre-tax revenues, selling 798 units of tobacco products. Its landmark brand – Marlboro – is the world #1 cigarette brand, which cigarette unit sales equaled 270 billion in 2017.
L&M (#4), Chesterfield (#7), Philip Morris (#10), Parliament (#12), Bond Street (#15), and Lark are some of PMI’s leading international cigarette brands.
British American Tobacco (BAT) is a London-based publicly traded company that rides 11.8% of total global cigarette sales. BAT’s pre-tax revenues were $26 billion in 2017. It sold 686 billion tobacco products in the previous year.
The company’s cigarette market is driven by its five global brands – Dunhill, Kent, Lucky Strike, Pall Mall (#3), and Rothmans (#6). In July 2017, BAT successfully completed the acquisition of Reynolds American Inc. (RAI) for £41.8 billion.
Japan Tobacco (fourth-largest) and Imperial Brands (fifth-largest) are the other two leading international cigarette manufacturing companies in the world with market share of 8.4% and 3.7% respectively.
Winston (#3), Camel (#5), Mevius/Mild Seven (#8), and Benson & Hedges are JP’s top international cigarette brands while Imperial Group’s leading cigarette brands are West, Davidoff, John Player Special, Gauloises Blondes.