Pricing Power – Still Driving Tobacco Industry Profits26 Nov 2010 • by Natalie Aster
London – “Euromonitor International divides the cigarettes market into three price bands: premium; mid-price; and economy. Rises in prices can cause consumers to shift from one band to another, creating major differences between countries. Generally, high prices mean stronger mid-price and economy bands though the competitive advantage of major brands can enable the premium band to stay strong in spite of major price rises. The US market is made up of almost 70% premium brands despite major price growth since the Master Settlement Agreement, while in the UK (with the second-highest unit prices in the world) over 60% of the market is made up of economy brands.”
Detailed market research report “Pricing Power – Still Driving Tobacco Industry Profits” has been recently published by Euromonitor International. The report includes on-the-ground research and analysis of the 80 leading markets (which account for over 95% of most consumer markets) with other countries modelled for world and regional totals.
Published: November 2010
Price: USD 2,000
Report Sample Abstract:
- Prices paid by consumers for cigarettes are rising all over the world and (excluding China) prevalence is falling, though global volumes will be protected by growing smoking populations in developing regions.
- More than public smoking bans, health warnings and marketing restrictions, higher prices through increasing taxation are viewed as the most effective way of cutting smoking and raising tax revenues.
- Illicit trade stood at 522 bn sticks in 2009 and the connection between higher prices and cigarette smuggling is not disputed. However, illicit trade rise fears will rarely deter governments or the industry from raising prices.
- All the international companies are currently recording like-for-like volume falls, but pricing gains and premiumisation are keeping sales and profits rising. This will continue, albeit with more flexibility in price band strategies.
More information can be found in the report “Pricing Power – Still Driving Tobacco Industry Profits” by Euromonitor International.
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