Tobacco Product Manufacturing in the UK Industry Market Research Report Now Updated by IBISWorld

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Tobacco Product Manufacturing industry revenue declined in each of the past five years. There has been a long-term decline in smoking rates over the past few decades, mainly due to health concerns. Now only 21% of the population smokes. Government measures designed to reduce smoking rates have added to the negative press surrounding health-related smoking risks and contributed to declining smoking rates. Industry revenue is expected to fall 3.3% per annum over the five years through 2012-13 to reach £8.8 billion. This figure includes excise tax, which accounts for approximately 74% of industry revenue. Industry revenue is expected to decline 5.2% in 2012-13. IBISWorld expects the industry will continue to decline over the next five years, with the number of companies operating in the industry expected to fall to just 10 in 2017-18. Cigarette consumption is expected to continue its downward trend, while regulation and taxes on tobacco increase. Employment is expected to decline an annualised 3.9%. Consequently industry revenue is expected to decline over the next five years to 2017-18. For these reasons, industry research firm IBISWorld has updated its report on the Tobacco Product Manufacturing industry.

IBISWorld Market Research

IBISWorld Market Research

Industry revenue continues to decline in line with falling smoking rates

Tobacco Product Manufacturing industry revenue declined in each of the past five years. There has been a long-term decline in smoking rates over the past few decades, mainly due to health concerns. Now only 21% of the population smokes. Although the price of tobacco products is relatively static, there have been some rises, which have also contributed towards the decline in smoking rates. According to IBISWorld industry analyst Steven Connell, “price rises have also led to a shift away from premium brands towards economy brands”. For instance, demand for roll-your-own cigarettes has increased at the expense of filter cigarettes.
Government measures designed to reduce smoking rates have added to the negative press surrounding health-related smoking risks and contributed to declining smoking rates. Examples of regulations introduced over the past five years include an increase of the minimum age of purchase from 16 to 18 and the inclusion of pictorial health warnings on tobacco packages. Industry revenue is expected to fall 3.3% per annum over the five years through 2012-13 to reach £8.8 billion. This figure includes excise tax, which accounts for approximately 74% of industry revenue. Industry revenue is expected to decline 5.2% in 2012-13. IBISWorld expects the industry will continue to decline over the next five years, with the number of companies operating in the industry expected to fall to just 10 in 2017-18. Connell adds, “cigarette consumption is expected to continue its downward trend, while regulation and taxes on tobacco increase”. Employment is expected to decline an annualised 3.9%. Consequently industry revenue is expected to decline over the next five years to 2017-18.
The market share concentration in the Tobacco Product Manufacturing industry is very high with the top 4 manufacturers accounting for approximately 97% of the market in 2008. Major companies include Imperial Tobacco, Japan Tobacco and British American Tobacco.
For more information on the Tobacco Product Manufacturing 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

This industry includes companies that manufacture cigarettes, fine-cut tobacco, cigars and pipe tobacco. The industry also includes companies that are involved in the stemming and re-drying of tobacco leaf.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.

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Gavin Smith
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