Cigarettes & Tobacco Market Report 2010

The UK cigarettes and tobacco market grew by 4% to £16.28bn in 2009 and increased by 5.8% over the 5-year review period. This growth was largely due to an increase in spending on tobacco products within the UK, as the cross-border shopping sector declined in the face of a weak pound and a drop in the number of tourists. The continued growth of the hand-rolling tobacco (HRT) sector also helped to drive overall sales, with a large number of consumers switching to HRT in order to cut costs. Cigars and pipe tobacco remain in long-term decline, with values of £296m and £45m registered in 2009, respectively.

The four largest tobacco companies in the world, excluding sales in the People’s Republic of China (PRC), are Philip Morris International, British American Tobacco (BAT) Japan Tobacco International (JTI) and Imperial Tobacco. Two of the world’s largest tobacco companies, BAT and Imperial Tobacco, are UK-based. Imperial Tobacco and JTI dominate sales in the UK, accounting for around 84% of sales in the year to November 2009, according to ASH. Philip Morris International accounted for 7.3%, and BAT 6.4%. Interestingly, despite the ban on advertising, private-label brands took just 1% of the market.

In its Annual Report, 2009, BAT said that despite ‘the challenges ahead and economic uncertainty around the world’, it expects profitability in the tobacco industry to increase. It believes that most of the profit growth will come from emerging markets, where, as living standards rise, consumers are more likely to trade up to premium priced brands. BAT adds that the number of adults in the world over the age of 20 is forecast to grow over the next 10 years and, consequently, it believes that the tobacco industry’s global annual sales will be broadly unchanged in a decade’s time.

Volume consumption is likely to grow at a very small pace over the next 5 years, as the Government’s austerity measures begin to bite. Cutbacks in public spending will have an impact on unemployment and consumers sentiment over the next 5 years. The authors expect the pound to gain strength over the next 5 years as the economy recovers. Interest rates will rise, making sterling more attractive to foreign investors and pushing up the value of the currency. As a result, purchasing cigarettes and tobacco abroad may once again become attractive to UK consumers from 2013 onwards. The growth in the cigarette sector will be held back by the continuing trend towards value brands, while the focus on value will continue to drive sales of HRT. The cigars and pipe tobacco sectors will continue to deteriorate. The decline in the prevalence of tobacco will also continue to affect the market. SHOW LESS READ MORE >

Foreword

Executive Summary

Market Definition
REPORT COVERAGE
MARKET SECTORS
Cigarettes
Hand-Rolling Tobacco
Cigars
Cigarillos
Pipe Tobacco
MARKET TRENDS
Restrictions on Smoking
Prevalence of Smoking
Smuggling and Taxes
Pound's Slump Hits Cross-Border Sales
Smoking by Socioeconomic Group
Smoking by Region
ECONOMIC TRENDS
Population
Gross Domestic Product
Inflation
Unemployment
Household Disposable Income
MARKET POSITION
The UK
Overseas

Market Size
THE TOTAL MARKET
BY MARKET SECTOR
Cigarettes
Hand-Rolling Tobacco
Cigars
Pipe Tobacco
OVERSEAS TRADE

Industry Background
RECENT HISTORY
NUMBER OF COMPANIES
EMPLOYMENT
REGIONAL VARIATIONS IN THE MARKETPLACE
DISTRIBUTION
HOW ROBUST IS THE MARKET?
LEGISLATION
KEY TRADE ASSOCIATIONS
International Tobacco Growers' Association
Tobacco Manufacturers' Association
Tobacco Retailers Alliance

Competitor Analysis
THE MARKETPLACE
MARKET LEADERS
British American Tobacco PLC
Imperial Tobacco Group PLC
Japan Tobacco Group
Republic Technologies (UK) Ltd
OTHER COMPANIES
Hunters and Frankau Ltd
Ronson International Ltd
OUTSIDE SUPPLIERS
MARKETING ACTIVITY
Exhibitions

Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

Buying Behaviour
CONSUMER TRENDS
Tried to Give Up Smoking
Cigarettes
Hand-Rolling Tobacco
Cigars
Pipe Tobacco

Current Issues
HEALTH ISSUES
Charity Calls for Hike in Taxation
US Supreme Court Rejects Washington's Claim for Huge Damages
REGULATION
US Congress Passes Tough New Legislation on Tobacco
UK Tobacco Firms and Retailers Fined
Smoking Declines Among Children

The Global Market
GLOBAL TRENDS

Forecasts
INTRODUCTION
The Economy
FORECASTS TO
FUTURE TRENDS
Demographics
Market Segmentation
Product Development
Competitor Forecasts

Company Profiles
INTRODUCTION
DEFINITIONS
Turnover (Sales)
Pre-Tax Profit
Profit Margin
Average Remuneration
Sales per Employee
FURTHER INFORMATION

BRITISH AMERICAN TOBACCO PLC
Previous Name(s) and Date(s) of Change
Principal Activities
SIC Codes
Structure
Brand Information
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

IMPERIAL TOBACCO GROUP PLC
Principal Activities
SIC Codes
Structure
Brand Information
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

REPUBLIC TECHNOLOGIES (UK) LTD
Previous Name(s) and Date(s) of Change
Principal Activities
SIC Codes
Structure
Brand Information
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Key Note Sources
Key Note Ltd

Understanding TGI Data
Number, Profile, Penetration
Social Grade
Standard Region

Research

Note Range of Reports

- British American Tobacco PLC
- Imperial Tobacco Group PLC
- Japan Tobacco Group
- Republic Technologies (UK) Ltd
- Hunters and Frankau Ltd
- Ronson International Ltd