Revenue continues to decline with increasing regulations and health concerns
London, United Kingdom (PRWEB) December 04, 2012
The Tobacco Product Manufacturing industry is under fire. Since the 1960s, smoking rates in the United Kingdom have fallen from over 50% to 20% in 2010 as people became aware of the link between smoking and diseases such as cancer. Although the price of tobacco products is relatively static, there have been some rises, which have also contributed towards the decline in smoking rates. The 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. According to IBISWorld industry analyst Steven Connell, “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 at a compound annual rate of 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, as smokers die off or kick the habit, while less young people take up smoking to replace them. Connell adds, “cigarette consumption is expected to continue its downward trend, while regulation and taxes on tobacco increase”. Plain packaging of cigarette packets is expected to be introduced during the next five years, further constraining industry revenue and profitability. Smokers are also expected to continue trading down from expensive cigarettes to cheaper cigarettes and hand-rolled varieties.
The market share concentration in the Tobacco Product Manufacturing industry is very high with the top three players accounting for over 90%. Major companies include Imperial Tobacco Group, 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
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.