London, United Kingdom (PRWEB) June 25, 2012
The Tobacco Product Wholesaling industry has fallen victim to the wave of anti-smoking sentiment that has wafted through much of the Western world. Wholesalers have also been faced with an increasing incidence of being bypassed by large retailers, particularly supermarkets and multinational producers that have sought efficiencies through internalising their wholesaling functions. According to IBISWorld industry analyst Naren Sivasailam, “government legislation such as the introduction of the smoking ban, banning advertising of tobacco products and increasing taxes and duties on the sale of cigarettes has contributed to a decline in overall smoking rates across the United Kingdom”. In 2010, around 21% of people aged 16 and over identified themselves as smokers, down from 39% in 1980, highlighting the impact of health awareness programs combined with a marked fall in tobacco marketing and availability. The economic woes of the European Union have seen a strong fall in discretionary spending that has hindered the sale of cigarettes in the United Kingdom, which has some of the highest prices in the European Union. In the five years leading up to 2012-13, industry revenue is estimated to decline by an annualised 3.3% to total £9.76 billion. In 2012-13, revenue is forecast to decline 4.6%.
The industry is expected to face similar headwinds over the next five years, as fewer take up smoking while more people quit. Sivasailam adds, “legislation affecting the sale and marketing of tobacco products is also expected to become more stringent in the future, driven by initiatives such as plain packaging, banning vending machine sales and increasing anti-smoking communication around the country”. The UK and EU economic situation will also pose a significant impediment to the industry's future, as the debt saga engulfing the continent threatens its unity and economic prospects. Wholesalers will also continue to be bypassed by larger players or global producers that seek vertically integrated structures. In the five years leading up to 2017-18, industry revenue is forecast to continue to decrease.
IBISWorld estimates that the Tobacco Product Wholesaling industry has a medium level of market share concentration, with the top four industry players accounting for approximately 40% of industry revenue. This includes wholesalers who sell other products in addition to tobacco (such as food and beverages), and the large multinational tobacco manufacturers. Companies include Palmer & Harvey-McLane, Booker Group, Philip Morris International and British American Tobacco.
For more information on the Tobacco Product Wholesaling industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry distribute tobacco products, including specialist tobacco wholesalers; tobacco manufacturers that distribute their own products directly to retailers; and wholesalers that distribute a range of products including tobacco. Tobacco products include cigarettes, loose tobacco and cigars.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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