Cigarettes & Tobacco 2011

• Publication date: October 2011

Executive Summary The UK cigarette and tobacco market comprises four main sectors — cigarettes, hand-rolling tobacco (HRT), cigars and pipe tobacco. The total value of the market is estimated to have reached £17.66bn in 2010, after rising by 8% from 2009, while, between 2006 and 2010, a 12.9% increase was witnessed overall. Key Note estimates that the cigarettes sector continued to account for the largest proportion of the market...

Executive Summary

The UK cigarette and tobacco market comprises four main sectors — cigarettes, hand-rolling tobacco (HRT), cigars and pipe tobacco. The total value of the market is estimated to have reached £17.66bn in 2010, after rising by 8% from 2009, while, between 2006 and 2010, a 12.9% increase was witnessed overall. Key Note estimates that the cigarettes sector continued to account for the largest proportion of the market, representing 86.6% of sales in 2010, followed by HRT, which represented 11.5%. Cigars and pipe tobacco are by the far the smallest sectors of the market, with a combined contribution of 1.9% in 2010.
Despite the value the UK cigarette and tobacco market increasing in recent years, a long-term decline in volume sales has become more apparent. This is due to a number of factors which have affected consumer opinions regarding smoking, while new legislation has also has a significant effect on the volume of cigarettes being sold. A wider awareness of the negative health implications that can be caused by smoking, as well as Government schemes to help smokers quit has persuaded many consumers to stop smoking, thus affecting volume sales. In addition, the Smoking Ban, which was introduced in the UK in July 2007 and made it illegal for users to smoke in public places, also had a significant effect on the market. Changes in other legislation, such as that governing the age restriction at which someone can purchase cigarettes (which rose from 16 to 18 in October 2007) is also believed to have affected the potential value of the market in recent years.
In 2011, the Government published a new report entitled Tobacco Control Plan for England, which outlined a number of steps and initiatives to help people to stop smoking. The first change outlined by the Plan is the display ban, which will mean that retailers will not legally be allowed to display any tobacco products, but will be forced to store them under the counter. The Act will come into force for larger retailers in April 2012, while smaller shops will have to abide by it as of April 2015. Other restrictions, such as the ban of branded tobacco products, are also included in the Plan, although a decision on this particular amendment has yet to be made and will be decided on by the end of 2011.
Four leading companies dominate cigarette and tobacco sales both in the UK and internationally. These include Philip Morris International; British American Tobacco (BAT); Imperial Tobacco; and Japan Tobacco International (JTI). The dominance of these companies makes it extremely hard for new distributors to enter the marketplace, as does the restrictions on advertising within the industry.
Key Note estimates that sales of cigarettes and tobacco will increase at a slow rate between 2011 and 2015, reaching £19.01bn in the latter year. Despite this, growth is expected to slow down considerably in the forthcoming years and any increase in value is likely to be down to rising prices and tax hikes. In terms of volume sales, the market is expected to continue to decline, due to the introduction of the Government’s Plan to tackle tobacco usage.

Tobacco Industry in Australia

Table of Contents

Foreword

Executive Summary

Market Definition
REPORT COVERAGE
MARKET SECTORS
Cigarettes
Hand-Rolling Tobacco
Cigars
Cigarillos
Pipe Tobacco
MARKET TRENDS
Smoking Restrictions
Prevalence of Smoking
[(c)Taxation and Smuggling
Smoking by Socioeconomic Group
Smoking by Region
ECONOMIC TRENDS
Population
Gross Domestic Product
Inflation
Unemployment
Household Disposable Income
MARKET POSITION
The UK
[(c)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 International
Philip Morris International
OTHER COMPANIES
Hunters and Frankau Ltd
Republic Technologies (UK) Ltd
Ronson International Ltd
OUTSIDE SUPPLIERS
MARKETING ACTIVITY
Exhibitions

Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

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

Current Issues
THE TOBACCO PLAN FOR ENGLAND
THE WORLD'S FIRST 'SAFE' CIGARETTE
LESS PRICE VARIATION AMONG CIGARETTE BRANDS
COUNCILS CONFLICT IN BACKING TOBACCO FIRMS
AUSTRALIA LEADS IN BRANDING BAN

The Global Market
GLOBAL OVERVIEW

Forecasts
INTRODUCTION
The Economy
FORECASTS TO
MARKET GROWTH
FUTURE TRENDS
Market Segmentation
The Government's Input
Product Innovations

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 Code
Structure
Brand Information
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

IMPERIAL TOBACCO GROUP 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

PHILIP MORRIS LTD
Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
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

Key Note Research

The Key Note Range of Reports