The Cigarette Industry Is One of the Most Profitable and Deadly Industries in the World.
Cigarette consumption in day-by-day increasing in low and middle income countries, whereby decreasing in high- income countries. And the major reason behind decline is, the restriction on smoking by government policies.
Around 5.7 trillion cigarette were smoked worldwide in 2016. “Between” 2005-2018, sales of cigarette has increased in Asia Pacific, Middle East and Africa while all other regions have experienced a huge decline in sales. The cigarette consumption is predicted to increase in the coming decades. For instance, the number of tobacco smokers is set to increase by 24 million in Indonesia and nearly by 7 million in Nigeria from 2015 to 2025.
Cigarette sales are expanding to new markets and these new markets are controlled by few international companies. In 2001, more than 43% of market was under the five leading transnational tobacco companies. And these leading companies are none other than: China National Tobacco Corporation, Philip Morris International, British American Tobacco, Japan Tobacco Inc. And Imperial Tobacco.
Largest Cigarette Markets:
The five largest consuming countries are: China, Indonesia, Russia, U.S. and Japan.
- China is the largest producer and consumer of cigarette in the world. In 2014, China produced and consumed more than 30% of the cigarette. Although cigarette use in China has begun to decline, half of Chinese adult males continue to smoke cigarette. Development of country and increase in population leads to increase in cigarette market.
- Indonesia generally sales kretek, a kind of cigarette with a blend of tobacco and cloves. In 2017, approx 322 billion cigarettes were consumed only in Indonesia. According to survey in 2019, curiosity was the major reason why Indonesian tried smoking. And these smokers mainly include 16 to 18 years of adults, who tried smoking for the first time. West Java province has the largest market size for tobacco.
- In Russia, around 39% of men and 25% of youth smoke cigarettes. Among all European countries, Russia has the highest smoking rates. The consumption has been increased during the economic transition following the collapse of Soviet Union in 1931. The current rates of smoking is over 60%.
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- In S., the market value of tobacco manufacturing industries has remained relatively stable for long. Philip Morris International has the largest share of U.S. market. Marlboro is the most popular brand in U.S. The market size of Cigarette manufacturing has increased than the economy overall. On the basis of market size, it stands 21st rank.
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- In Japan, Japan Tobacco Inc.(JT) is the most profitable traded tobacco company. It is 50% owned by the Japanese government in 2013 and now it has reduced to 33% share. It’s net profit for March 2009- March 2010 were 138 billion Yen, while in 2020 , it is expected to decline by 7%. JT is the only company allowed to produce cigarette in Japan.
Cigarette Market in India:
India is the third largest producer of tobacco in the world. Among all the cigarette producers, ITC ltd. is on the top, with the market share of ~84.27% and the other minor producers are Kothari Products Ltd., Godfrey Philips India Ltd., and others. Gold Flake Kings is the best indigenous cigarette brand, which is popularly known as Khandani. The Indian government banned foreign direct investment in tobacco sector in 2010.
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