Market reports, business information and market research - Midnight Croquet. Key Note Cigarettes and Tobacco

Worldwide Business Information and Market Reports

Telephone +44 1404 891528 Fax +44 1404 891717 Email reportfinder @ tiscali.co.uk

KEY NOTE CIGARETTES AND TOBACCO : APRIL 2001

WANT TO BUY THIS? Just one of a HUGE range of titles from publishers such as Aktrin, AMA Research, Key Note, MAPS, MBD, MSI and The Prospect Shop that you can BUY RIGHT NOW online from us. To buy or to browse further, use either of the Back To buttons below to activate our catalogue. If you would like to buy this title, you will find it in alphabetic order in the Index using the first Back To button. If you need further information, please contact us using the details at the top of this page. Please tell your colleagues if you find our site useful!

This report covers: cigarettes, tobacco, cigars, hand-rolled, cigarillos, nicotine patches, nicotine gum, hypnosis, acupuncture, pipe tobacco, premium brands, mid-price brands, black market, duty paid, non-UK duty paid, low-price brands, cheroots, voluntary agreements, quota systems, forestalling, duty-paid mark,

Companies/brands covered include: British American Tobacco, BAT, Dunhill, Lucky Strike, Kent, State Express 555, Rothmans, Pall Mall, Winfield, John Player Gold Leaf, Marlboro, Gallaher Group, Benson & hedges, Silk Cut, Berkeley Superkings, Mayfair, Dorchester, Camel, Imperial Tobacco, Lambert & Butler, Regal, Embassy, Superkings, JPS, Swedish Match UK, Swan, Hunters & Frankau, Manchester Tobacco Company, Zig Zag (GB),

GO TO LATEST EDITION
Executive Summary
Table of Contents
Back to Confectionary, Snacks and Tobacco Index and Shopping Cart
Back To REPORTFINDER home page and Search Engine

EXECUTIVE SUMMARY

The UK duty-paid cigarette and tobacco market grew by 3.9 percent between 1996 and 2000, to reach a value of £12.37bn. While the volume of the market has remained fairly constant, its value has been affected by rising tobacco-specific taxes. In addition, the legitimate trade is being undermined by the growing volume of smuggled products entering the market.

The main sectors of the market are cigarettes, cigars, hand-rolling tobacco and pipe tobacco. Cigarette sales have seen a trading down on the part of many consumers, from premium to low-priced brands, in the face of substantial price rises in the market. This has also encouraged some consumers to opt for hand-rolling tobacco as a lower-priced alternative - a choice particularly popular among younger smokers, both male and female. Cigars have seen a fall-off in sales, but an even sharper decline is evident in pipe tobacco.

Cigarettes and tobacco continue to be a battleground for the pro- and anti- smoking lobbies. The negative health implications of smoking mean that the Government and the EU are among those actively seeking a reduction in the prevalence of smoking, and they are legislating against it. Those in favour of smoking, led by the tobacco groups, are taking a pro-choice position. However, even they regard issues such as a complete advertising ban as simply a matter of time.

The UK market is heavily regulated and mature, with volumes steady or declining, rather than on the rise. As a result, the major tobacco companies are pursuing a policy of overseas expansion. Desirable markets include those in the former Soviet Union, and growth is taking the form of acquisition.

The most important issue facing the UK market is the growing level of smuggled products. These are often UK brands that have been exported and subsequently find a way back into the UK market to retail at a discount of up to £2 for a pack of 20. UK cigarettes and hand-rolling tobacco are the most expensive and highly taxed in Europe. The Government is taking steps to combat smuggling through its Customs and Excise operations, but many within the trade see a reduction in tobacco taxes as the only way to deal with the problem.

Volumes in the cigarette and tobacco market are expected to show a slight decline in the medium term, but it is likely that sales of legitimate products will show a sharper fall unless the threat from smuggled products can be addressed. The market's value will grow slowly between 2001 and 2005, boosted by price increases imposed by the tobacco groups, as well as by any rises in tax.

TABLE OF CONTENTS

Executive Summary	1
1. Market Definition	2
REPORT COVERAGE	2
MARKET SECTORS	2
Cigarettes	2
Cigars	2
Cigarillos	2
Hand-Rolling Tobacco	3
MARKET TRENDS	3
Prevalence of Smoking	3
Table 1: Prevalence of Smoking in the UK by Sex and Age ( percent of adults),1988, 1994 and 1998	3
Table 2: Proportion of All Adults Trying to Give Up Smoking and Method Used ( percent), 1999 and 2000	4
Under-Age Smokers	5
UK Taxes and Smoking	5
Table 3: Cigarettes andHand-Rolling Tobacco — Retail Price and Total Tax in Each of the Countries of the EU (pence), 2000/2001	5
MARKET POSITION	6
The UK	6
Table 4: Indices of Total Household Expenditure and Spending on Cigarettes and Tobacco (1996=100),1996-2000	7
Overseas	7
TRADE ASSOCIATIONS	7
Tobacco Manufacturers’ Association	7
2. Market Size	8
THE TOTAL MARKET	8
Table 5: The UK Market for Cigarettes and Tobacco by Value at Current Prices(£m at rsp), 1996-2000	8
by market sector	8
Cigarettes	8
Table 6: The UK Market for Cigarettes by Value at Current Prices (£m at rsp), 1996-2000	9
Table 7: The UK Market for Cigarettes by Volume(billion sticks), 1996-2000	9
Premium Brands	9
Mid-Price Brands	9
Low-Price Brands	10
Cigars	10
Table 8: The UK Market for Cigars by Value at Current Prices (£m at rsp),1996-2000	10
Hand-Rolling Tobacco	11
Table 9: The UK Market for Hand-Rolling Tobacco by Value at Current Prices(£m at rsp), 1996-2000	11
Table 10: The UK Market for Hand-Rolling Tobacco by Volume (tonnes),1996-2000	12
Pipe Tobacco	12
Table 11: The UK Market for Pipe Tobacco by Value at Current Prices (£m at rsp), 1996-2000	13
OVERSEAS TRADE	13
Imports	13
Table 12: Imports of Cigarettes and Tobaccoby Value (£m),1998 and 1999	14
Exports	14
Table 13: Exports of Cigarettes and Tobaccoby Value (£m),1998 and 1999	14
3. Industry Background	15
RECENT HISTORY	15
NUMBER OF COMPANIES	15
EMPLOYMENT	16
Table 14: Number of Local Units Manufacturing Cigarettes and Tobacco Products by Number of Employees, 2000	16
DISTRIBUTION	16
Table 15: Retail Distribution of Tobacco Products byType of Outlet by Volume ( percent), 2000	17
HOW ROBUST ISTHE MARKET?	17
LEGISLATION	18
Voluntary Agreements	18
Quota Systems	18
Duty-Paid Marks	19
4. Competitor Analysis	20
THE MARKETPLACE	20
MARKET LEADERS	20
British AmericanTobacco PLC	20
Company Structure	20
Current and Future Developments	20
Financial Results	21
Gallaher Group PLC	21
Company Structure	21
Current and Future Developments	21
Financial Results	22
Imperial TobaccoGroup PLC	22
Company Structure	22
Current and Future Developments	23
Financial Results	23
Swedish Match UK Ltd	23
Company Structure	23
Current and Future Developments	23
Financial Results	23
OTHER COMPANIES	24
Hunters & Frankau Ltd	24
Financial Results	24
The Manchester Tobacco Company Ltd	24
Financial Results	24
Zig Zag (GB) PLC	24
Financial Results	24
OUTSIDE SUPPLIERS	24
ADVERTISING ANDPROMOTION	25
Main Media Expenditure	25
Table 16: Main Media Advertising Expenditure on Cigarettes, Cigars and Tobacco (£000), 2000	25
Recent Campaigns	26
5. Strengths, Weaknesses, Opportunities and Threats	28
STRENGTHS	28
WEAKNESSES	28
OPPORTUNITIES	28
THREATS	29
6. Buying Behaviour	30
CONSUMER PENETRATION	30
Table 17: Penetration of Cigarettes and Tobacco Products ( percent of adults),1995-2000	30
By Sex	30
Table 18: Penetration of Cigarettes and Tobacco Products by Sex( percent of adults), 2000	31
By Age	31
Table 19: Penetration of Cigarettes and Tobacco Products by Age( percent of adults), 2000	31
By Social Grade	32
Table 20: Penetration of Cigarettes and Tobacco Products by Social Grade( percent of adults), 2000	32
By Region	32
Table 21: Penetration of Cigarettes and Tobacco Products by Region( percent of adults), 2000	33
7. Current Issues	34
THE ROLE OFTHE INTERNET	34
HEALTH ISSUES	34
Cigarette CompanyAdmission	34
Health and SafetyExecutive Guidelines	35
World HealthOrganisation Proposals	35
PRODUCT DEVELOPMENT	35
CORPORATE ACTIVITY	35
LEGISLATIVE CHANGES	36
UK Government	36
European Union	36
8. The Global Market	37
WORLD HEALTH ORGANISATIONCONVENTION	37
THE EU MARKET	37
Table 22: The EU Tobacco Market by Country by Volume (million and tonnes), 1998	38
Germany	39
Italy	39
France	39
NON-EU MARKETS	39
China	39
The US	40
Russia	40
9. Forecasts	41
INTRODUCTION	41
Household Expenditure	41
Table 23: Total Household Expenditure and Index of Retail Sales (£bn and index 1995=100), 1995-2000	41
Tobacco Smuggling	41
Table 24: Non-UK-Duty-Paid Cigarettes and Hand-Rolling Tobacco as a Proportion of Total Sales by Volume ( percent), 1996-2000	42
FORECASTS 2001 TO 2005	42
Table 25: The Forecast UK Market for Cigarettes and Tobacco by Value at Current Prices (£m at rsp),2001-2005	42
FUTURE TRENDS	43
Demographics	43
Table 26: The UK Population by Age Group (000),1996, 2001 and 2006	43
Market Segmentation	43
Europeanisation/Globalisation	43
Product Development	44
10. Company Profiles	45
British AmericanTobacco PLC	46
Gallaher Group PLC	48
Imperial TobaccoGroup PLC	50
Swedish Match UK Ltd	52
11. Further Sources	54
Associations	54
Periodicals	55
Directories	56
General Sources	56
BonnierInformation Sources	57
Government Publications	58
Other Sources	58
Understanding TGI Data	60
Number, Profile,Penetration	60
Social Grade	61
Standard Region	61
Key Note Research	62
The Key Note Rangeof Reports	63

Back to Top

Back To REPORTFINDER HOME PAGE

Ariadne - working together with our customers to enhance productivity and increase knowledge

Last updated by Jacob van Eldik 19th May 2001