UK tobacco market to decline due to Government schemes

Press Release   •   Feb 06, 2013 12:19 GMT

The UK cigarette and tobacco market comprises four main sectors -- cigarettes, hand-rolling tobacco (HRT), cigars and pipe tobacco.

UK purchases of tobacco products increased by 6% in 2012 to £19.2 billion, above the reported CAGR of 3% for the review period of 2006-2012. Sales remained high due to rising retail prices and taxes on tobacco products.

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.

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.

In 2010 the companies with largest domestic production outputs were: Imperial Tobacco Group Plc, Gallaher Group Plc and British American Tobacco Plc. Imperial Tobacco Group is a UK-based company engaged in the manufacture of cigarettes, tobaccos, cigars, rolling papers, and tubes and logistics.

Imperial Tobacco has manufacturing facilities in Nottingham and a total of 49 worldwide. In 2011 Imperial Tobacco launched GlideTec packs for the Lambert and Butler brand, and JPS roll your own and make your own tobaccos.

Over 2013-2018 the turnover of local producers is projected to contract by 7% to £1.6 billion, with the number of smokers in the UK and other mature countries expected to fall.

For more information on the UK tobacco market, see the latest research: UK Tobacco Market

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