Total value of retail sales of cigarettes and tobacco products in UK rose by 6.4% and 2.4%, respectively, in 2011 and 2012, driven primarily by price increases and government tax increases: Research and Markets

Nevin Barich

DUBLIN , December 10, 2013 (press release) – Research and Markets (http://www.researchandmarkets.com/research/k5833z/cigarettes_and) has announced the addition of the "Cigarettes & Tobacco Market Report 2013" report to their offering.

This Market Report analyses the cigarettes and tobacco market in the UK. It covers various types of smoking tobacco products, with the analysis focused on items that are sold in the retail sector. The total value for retail sales of cigarettes and tobacco products grew by 6.4% and 2.4%, respectively, in 2011 and 2012. The increase in market value was driven primarily by price increases and government tax hikes on these products.

Official statistics show that the proportion of smokers in Great Britain has been falling steadily since 1974, due to increased awareness of the health risks involved in smoking, and legislative restrictions implemented by the Government, such as the smoking ban in public places and the ban on cigarette vending machines. The economic downturn in 2008 also contributed to the downwards trend as some consumers decided to quit smoking due to financial problems. In 2011, 20% of the total adult population in Great Britain smoked, down from 27% in 2000 and 45% in 1974.

Traditional manufactured cigarettes continued to account for the largest sector of the market over the review period, with the sector growing year-on-year between 2010 and 2012. Prior to that, the traditional cigarette market contracted by 0.6% in 2009, affected by the economic downturn. Sales of hand-rolling tobacco (HRT) grew throughout the review period, with the sector rising by an estimated 31.1% between 2008 and 2012. Growth in HRT has been driven by the increasing number of smokers switching from cigarettes to HRT to save money. The UK cigar and pipe tobacco sectors were in long-term decline well before the recent economic downturn and continue to fall in value. In 2012, sales of cigar and pipe tobacco products fell by 7.3% and 36.7%, respectively.

The market is dominated by a handful of tobacco companies, including Philip Morris International (PMI); British American Tobacco (BAT); Imperial Tobacco; and Japan Tobacco International (JTI). These companies operate on a global scale and have a combined share of nearly half the global market. In order to remain competitive, large tobacco companies are beginning to adopt alternatives to traditional cigarettes, such as electric cigarettes (e-cigarettes).

The authors forecast that the UK market for cigarettes and tobacco will continue to grow in value terms over the next 5 years, driven mainly by greater tax hikes and price increases.

Companies Mentioned

- British American Tobacco PLC

- Hunters and Frankau Ltd

- Imperial Tobacco Group PLC

- Japan Tobacco International

- Philip Morris International

- Republic Technologies (UK) Ltd

- Ronson International Ltd

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