Industry revenue continues to decline in line with falling smoking rates
London, United Kingdom (PRWEB) July 30, 2012
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.
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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