Imperial’s Four Key Brands Account for 33% of Sales

Imperial Tobacco’s £1.2bn writing off of amounts of its Spanish business is a surprise. The manufacturer is the giant operator in the recession-hit country, where a half of the personnel is unemployed.
Volumes are declining and companies as Imperial have been raising prices in order to increase profitability. It has also been paying attention on its key brands such as Gauloises, Davidoff and West. These are higher margin products as well as Imperial’s rolling tobacco as Drum and Golden Virginia brands, which have been declining to. Whole sales of these fine cut tobaccos increased by 13%, with premium cigar sales up 10%.

The manufacturer has also been implementing innovation, as for instance its “Glide Tec” packages, which demonstrated positive results and great demand among many smokers. These packages have a little “window” on the front of the package which permits the smoker to slide up the inner package with their thumb, thus opening the pack with only one hand. In the year to September, net profit from tobacco increased 5% at constant currencies, with volumes of cigarettes sold dropped 2.5%. After the write-down, pre-tax revenues declined to £1.1bn from 2.2bn.

Female Smoking

Latest reports show female smokers make up nearly 20 percent of the world’s tobacco smokers, and that figure is likely to grow due to successful ad campaigns targeting women, with consumption growing fastest among younger women and girls.
As a result, the rate of deaths among this population is also likely to grow – adding to the 5 million who now die each year worldwide from tobacco use and passive smoking. The WHO says the number could reach 8 million deaths by 2030.
To combat the millions the tobacco industry spends each year on ads, health advocates are now trying to step up public awareness campaigns along with anti-smoking restrictions, taxes and bans, especially in low income, developing nations with few controls.

 What’s Behind the Surprise Global Spike in Female Smoking?

What is the most ethical tobacco company or cigarette brand?

• I believe American Spirit purport to be made from 100% organic tobacco with no chemical additives. The purpose of many of the additives in cigarettes is to affect the body in various ways so as to make it more susceptible to nicotine. Choosing not to put them in is either an ethical choice or a clever marketing ploy.
  Seth, Edinburgh, Scotland

• How can any tobacco company be ethical? They target children worldwide as the next generation of smokers, expand sales in developing countries with less stringent advertising regulations and lower public awareness) are desperate to induce even more women into smoking by associating cigarettes with "caring /feel-good" factors. And from an economic perspective (which seems to be the only thing that counts these days), our increasingly ageing populations simply cannot afford to lose their expensively educated young people so prematurely.
  Sheila Kirby, Esbjerg, Denmark

• I back what Vince says. People have many ideas of what "ethical" is, and it changes over time. The American Indian peace pipe has a different ethical tone to it than the much-maligned Marlboro co. To me, there's a good side and bad side to all things, and since all things are connected, we all have links to something "unethical". Eg: computers run off electricity, which is generally sourced from a mix of fossil fuels, nuclear and renewables, produced by various companies for mixed motives, operated by many different people, who have a much better chance of getting to know each other (and themselves) if they can access the internet and have these discussions. Peace (& yes, I smoke, but not 100% of my time is spent smoking!)
  René Thomas, Huddersfield, UK

• I am a Mohawk living on a reservation in NY, USA. People here do make cigarettes but we encourage young people not to smoke and leave that to a decision made by adults. I do not apologize for my people trying to survive by making a legal product. Also, a company here exports cigarettes to the UK called 1st-nation. These are made with ethically sourced tobacco from Malawi benfitting the underpaid farmers there, and employs Mohawk Natives living on our reservation. I believe these are the first ever Ethically Sourced cigarette. Thanks
  Andre, Akwesasne New York, USA

• 1st-nation have recently launched in the UK and are probably the closest thing to Fairtrade that we are going to get. They voluntarily pay the farmers a premium and also invest in agricultural diversity for these farmers. The various Fairtrade organisations have illogically refused to provide support to tobacco products, so 1st-nation is working with local Malawi farming authorities to set their own ethical standards. Additionally, the brand is priced similarly to other mainstream brands.
  Pritesh Mody, London UK

• Tobacco producers started adding a pesticide to their crops in the 1950's. Cancer was never linked to tobacco previous to this pesticide being added to the crop. Is organic tobacco the answer for those who choose to smoke?
  Andrew, South Shields England

Smoking Men, Style and Life

Cigar vs. Cigarette: Cultural Difference

Cigar smoking is often considered as a more refined as cigarette smoking. Cigars are mostly popular in the US than in other parts of the world, with about 2.2% of adult consuming them. They are in a greater demand among men than women. They are often used in caricatures of wealthy people and symbolize masculinity and strength.

20% of adults in the US smoke cigarettes, although this rate has been decreasing since the 1960s. Also cigarette smoking is considered less sophisticated that cigar smoking. Nowadays people pay attention mostly on the health risks of cigarettes use than cigar smoking as the first are considered more popular. At present it is prohibited to smoke both cigar and cigarettes at workplaces, restaurants, stores and many public places.

Biology Nicotiana

There are many species of tobacco, which are encompassed by the genus of herbs Nicotiana. It is part of the nightshade family (Solanaceae) indigenous to North and South America, Australia, south west Africa and the South Pacific. Many plants contain nicotine, a powerful neurotoxin, that is particularly harmful to insects. However, tobaccos contain a higher concentration of nicotine than most other plants. Unlike many other Solanaceae, they do not contain tropane alkaloids, which are often poisonous to humans and other animals.

Despite containing enough nicotine and other compounds such as germacrene and anabasine and other piperidine alkaloids (varying between species) to deter most herbivores, a number of such animals have evolved the ability to feed on Nicotiana species without being harmed. Nonetheless, tobacco is unpalatable to many species, and therefore some tobacco plants (chiefly tree tobacco, N. glauca) have become established as invasive weeds in some places.

Quick Facts about hookah smoking

• Compared to a single cigarette, hookah smoke is known to contain:
• Higher levels of arsenic, lead, and nickel1
• 36 times more tar
• 15 times more carbon monoxide
• Smoking a hookah requires taking longer and harder drags, increasing levels of inhaled
nicotine and carcinogens in the lungs.
• The longer the hookah session, the more nicotine and toxins one takes in.
• A 45 to 60 minute hookah session exposes the smoker to approximately the same amount
of tar and nicotine as one pack of cigarettes.
• Sharing mouthpieces without washing them can increase the risk of spreading colds, flu,
and infections—even oral herpes.
• Health risks of smoking hookahs include cancer, heart disease, lung damage, and dental
disease.5
• Do not think that if you are just visiting a hookah bar, that you are in the clear. There are still
high levels of damaging secondhand smoke to all who are present.

Becoming a smoker: Young women smoking

Generally, young people demonstrate their possession of cultural capital and secure their position within social hierarchies on the basis of what and how they consume.To this end, young women’s narratives of learning to smoke and their attempts to embody‘smoking cool’ can be read as the accrual of capital, or the acquisition of social skills and competencies that serve as markers of distinction. Some young women portrayed themselves as coming to smoking with an existing cultural knowledge or‘smoker’s capital’, a natural affinity for smoking thought to occur by virtue of one’s previous exposure to tobacco in their home or community environments. Likewise, through their experiences and interactions with other young tobacco users adolescents described building up their smoking identities and the capital which resulted from being recognized as skilled or ‘real’ smokers.

Smoking is not only a social practice but also a bodilyone, in that how the cigarette is held and smoked can demonstrate bodilycompetence . . . that must be acquired through practice’. The needto be seen as a ‘real’ smoker is particularly evident in the narratives of younger tobaccousers, some of whom are still struggling with their smoking technique and comportment,attempting to ‘get it right’ and pass as more relaxed, competent and experienced. InRenée’s case, age and gender differences contributed to her initial awkwardnesswith cigarettes, as a new smoker amongst a group of older males, friends of her then-newboyfriend.In considering the distinctions young women made between themselves and moreexperienced smokers, a Bourdieusian analysis further illustrates how adolescents signifycultural capital through mastering the largely unspoken knowledge around the correctway to smoke. Likewise, smoking can alsosymbolise one’s initiation of ‘grown up’ practice as ‘the subtle bodily schema incorporate-rated in the cultural practice of smoking are osmotic reflexes of the transition into adulthood. For Mackenzie, this consisted of moving from what she termed ‘fake’ smokingwhen first experimenting during pre-adolescence, to ‘real’ andregular smoking as a teenager. Although not everyone would admit to smoking incor-rectly or to faking it, this fake/real distinction points to the imperative of demonstratinga seemingly effortless skill with cigarettes as a key aspect of the cool adolescent’s socialrepertoire. Consequently, smoker’s capital is not only about doing it right, but is alsoabout doing it for real, as self-conscious smoking does not carry much weight amongadolescents.

Imperial Tobacco Group

Imperial Tobacco Group  is the fourth largest tobacco manufacturer and second largest UK-based tobacco company. Imperial was founded in 1901 when 13 British tobacco and cigarette companies joined together comprising a conglomerate named W.D & H.O Wills of Bristol.

In 1902 Imperial Tobacco and American Tobacco Company joined forces creating British American Tobacco (BAT). The parent companies agreed not to trade on each other's domestic territory, assigned trademarks and export businesses to the joint venture. In 1911, however, the American Tobacco Company sold its share in BAT while the Imperial Tobacco held on to its part till 1980.

Besides tobacco business, Imperial is a very diversified company owning chain of restaurants, brewery, People's drugstore, etc. But recently the company decided to focus on its core tobacco business so all other unrelated subsidiaries were divested. Now Imperial Tobacco is an independent tobacco manufacturer listed on the UK stock exchange.

In 2003 Imperial Tobacco purchased the Reemtsma Cigarettenfabriken GmbH of Germany (then the fourth largest tobacco company) adding such brands as Davidoff, Peter Sluyvesant and West to its list of products. In 2008 Imperial acquired Atladis (then the fifth largest tobacco company) with its brands Gauloises Blondes and Gitanes.

Inovative Product Development

Phillip Morris product development is about understanding — and responding to — adult smoker preferences. The process begins with focused market research that results in a rigorous assessment of the challenges faced by our brands and the most consumer-relevant solutions. This insight then drives the development of innovative product concepts.

One such concept addresses a growing adult smoker preference to personally adapt, adjust or change the product when desired. In turn, this has translated into the commercialization of a new hybrid product: a regular cigarette that converts into a menthol product when the capsule within its filter is crushed by the smoker.

The most innovative addition to our portfolio in recent years, the hybrid concept was successfully introduced for the first time in 2011 with the launch of Marlboro Beyond, highlighted later in this Report, in selected markets in our European Union Region, and L&M Forward in Finland and Poland. These brand variants now complement our existing menthol-to-menthol capsule brands, such as Marlboro Ice Blast, which are enjoying considerable success in Asia and Latin America.

Philip Morris International

PMI is a U.S. company with headquarters in Lausanne, Switzerland. PMI is ranked second in the global tobacco market behind the China National Tobacco Company.
• PMI ranks second in the Russian cigarette market with 26% of the market in 2009.
• Russia is PMI’s largest market and is still considered an emerging market that PMI specifically targets to improve the growth of the company.
o “Russia [is] one of the key drivers of PMI’s strong overall results during the first half of 2008” according to Leo McLoughlin, Managing Director of PMI Affiliates in Russia.
• When Russia was part of the USSR, PMI signed an Agreement on Scientific and Technical Cooperation allowing production of PMI brands under its license in the USSR between 1977 and 1986. In 1992, PMI opened its first representative office in Moscow.
• PMI operates through three entities in Russia, but is generally known as Philip Morris International.
o Philip Morris Sales and Marketing Ltd. - Has about 100 offices throughout the country.
o OAO Philip Morris Kuban- A manufacturing facility acquired in 1993 and opened for production in 2000.
o ZAO Philip Morris Izhora- Construction of factory began in 1998 and production started in 2000.
• In 2009 PMI produced 390 billion cigarettes in its Russian factories.
• In 2008, PMI was the leader in the premium-priced cigarette segment, but as consumers down trade to cheaper brands, PMI continues to prosper because of its strong portfolio of brands in all cigarette segments.
• PMI continues to introduce new products and profit from the Russian market despite tough economic conditions.
o In a presentation to Morgan Stanley, PMI’s CEO Louis Camilleri stated that “Our business momentum [in Russia] continues unabated, the distribution network, which over the years has been consolidated, is working efficiently and effectively

A Chronological History Of Cigarette Smoking, By Brand

Parliament Lights, 1986: The First. Smoked on the train tracks on the way home from school, after we ran into a friend's older brother who had a pack. I am proud to say that I toughed it out and only coughed once, although this still does not diminish the embarrassment of having one's first cigarette be a Parliament Light.

Camels, 1986: Look How Bad I Am. When we speak of Camels here, we speak of filterless Camels, smoke of prison inmate and off-track betting habitue alike. Chosen both as an attempt to look harder and an obvious overcompensation for my guilt over the Parliament thing. The next year or so would find the brand interchangeable with Lucky Strikes and Chesterfields, also unfiltered. I seem to remember these as being the last packs I was able to buy in cigarette machines, which were already starting their slow march towards extinction.

English Ovals, 1987-1988: Family Tradition. When my father, who had given up smoking upon my birth, found out that I had picked up the habit, he evinced a combination of disappointment and resignation, but he was also enthusiastic about these sweet unfiltered American classics, which were his favorite brand during his lung-damaging years. For a while they were mine as well, although I do remember a brief flirtation with Player's Navy Cut.

Sher Bidis, 1988: A Shameful Summer Indulgence. I was young, what do you want from me? I still blush when I recall this era. It was only two months though. Best not to think about.

 Gauloises/Gitanes, 1988-1993: The Age Of Pretension. They were dark. They were strong. They were French. They spoke of exoticism, of cosmopolitan ways. They were absolutely brutal, "but so is life," said the impossibly precious teen. (Also known as the years of terrible breath.) I smoked more of these than I (or my eventual pulmonary specialist) care to consider, but wow were they great at the time. I think a few puffs off of one now would knock me on my ass, but, ah, youth. I generally preferred Gauloises, since the Gitanes packet looked like you were carrying around condoms with you, but either would do. The cigarettes I still dream about when I dream about cigarettes.

Basic, 1993: The Frugal Year. Ah, generic cigarettes. How many more drinks was I able to buy because of the money I saved on you? Notable for marking my entry into the filtered cigarette category.

Marlboro Reds, 1994-present: The Final Cut. And so, I gave in and became the typical American cigarette consumer. Sure, I've bummed the illicit menthol when desperate. There was that brief period when I quit and gained 30 pounds (resuming smoking managed to take five of those off, so, you know, yay, me). I've smoked the occasional Nat Sherman at fancy parties. I'm not bragging or anything, I'm just setting the record straight. But if the last fifteen-odd years of my life have had one constant, it has been that red-and-white pack sitting on my dresser, an old friend ready to console whatever, whenever, a soothing hit of nicotine is needed. Which is fairly frequent. In fact, right now would be a good time. Anyway, consider yourselves caught up.

BAT Converts Korea

In Seoul, shoppers at a 7-ll convenience store stare at packs of Kent Convertible cigarettes which have just been launched exclusively in the city. The packs are apparently equipped with different colored flashing lights that are signalling for attention.
In Busan, on the other side of the country, a Korean businessman places several packets of Kent Convertible that he purchased in Seoul that morning on the table in front of colleagues and associates, dispensing individual sticks or entire packets to his enthralled guests.
In an upstairs bar frequented by American expatriates, a visitor is handing out Kent Convertible sticks around the bar, demonstrating the technique required to release the menthol flavor and then increase its strength to a riveted crowd of smokers.
Within three weeks of its launch, BAT’s new Kent Convertibles cigarette had gained unprecedented market share, exceeding BAT’s expectations and attracting smokers to its new smoking concepts, and marking another significant – and unique - product launch in a country that has been described as a “must win” market for cigarette manufacturers.
The Korean market has become a sort of testing ground for new products and innovative smoke concepts, with brand variants researched, designed and manufactured specifically for the country’s smokers.
The patented flavor capsule technology incorporated in the unique charcoal filter system which lends the filter the ability to “convert” from a regular charcoal filtered light cigarette to a menthol stick, and then to increase the amount of menthol released into the smoke by rolling it between the fingers (“click and roll”) is claimed to represent the most significant innovation in filter technology since filters were invented.
The product has caught on rapidly, with Korean (and ex-pat) consumers buying in to the concept with gusto, proving once again that Korea is a market that embraces change and innovation.
“Korea was chosen as the market in which to launch Kent Convertibles because Koreans love innovation, they are open to new things that add value and functionality in a product,” confirmed Jeremy Flint, BAT Korea’s CORA executive director talking to Tobacco Asia recently. “Koreans love to see high-tech functionality in high-end products. BAT was looking for something to capture the imagination of Korean consumers. While flavor capsules are not new, - they’ve been around for two or three years in other markets – the charcoal filter and convertible technology incorporated in the filter – which should not be confused with boost products, which have also been around for a while,. offers something unique.”
Clearly, the Korean consumer thinks so as well. Initial sales reports indicate Kent Convertibles gained a market share of over 2.3% in Greater Seoul in key accounts within a month of its launch..
The brand was launched nationwide in mid-August, and is expected to continue to show the sort of performance experienced in Greater Seoul as its appeal is clearly in tune with the Korean consumer mindset.

Trends in Asian tobacco industry

Because in addition to the Chinese market, 42% of the market in Asia has not been occupied by multinational tobacco companies, tobacco companies around the active participation of local competition for market share.

Of local tobacco companies throughout Asia, they have a competitive advantage: implementation of ASEAN's internal policies and regulations on tobacco, and from Union countries to trade outside the tobacco companies will be punished, which means that they double-digit sales in the cigarette growth in the region by trade protection and benefit from. However, the multinational tobacco companies, the Asian market is still full of temptation. Vietnam tobacco in state ownership and local ownership on the relationship is unclear, leading to poor access to cigarette sales in the country, perhaps on the part of tobacco companies to privatize is an effective way to solve this problem. South Korea's KT & G Club will be the Asian region's most attractive acquisition targets, as Indonesia and Thailand Djarum tobacco company attractive. In addition to individual countries such as Singapore, most Asian countries, tobacco is still relatively moderate policy, and that in the short term there will be no significant change.

Also an issue of concern is: As cigarette taxes increase, the illegal cigarette trade has become increasingly rampant. Such as Malaysia, the domestic cigarette smuggling, cigarette smuggling in Asia accounted for 30% of total; and India, its domestic cigarette smuggling, cigarette smuggling in Asia accounted for 10% of the total to 15%. Asia, unlike Europe or Latin America, the overall situation as bad, but the local government should be noted that before the situation gets worse, "the smuggling of excise tax increase and the proportion of" problem.

In addition, Asia is still a good supply of leaf area. The development of tobacco production in India and Indonesia, the Philippines, Thailand, Vietnam and the expansion of tobacco farming in Bangladesh making Asia and Latin America, Africa is also important tobacco supply zones. All EU tobacco producers rely heavily on imported tobacco, especially cigarettes and opponents in the current consumer demand for home-made cigarette case. To meet the needs of the EU tobacco companies, tobacco suppliers in Asia need to use its tobacco processing methods. Meanwhile, Asia is growing different spices spices smoke to reduce smoke production uncertainty due to the Turkish adverse effects. Looking ahead, the major tobacco-growing countries in Africa as the uncertainty of production and leaf production in Brazil by the Brazilian domestic economy and the impact of currency appreciation in Asia have the opportunity to become the world's most important tobacco supply zones.

Cigarette consumption as an important tobacco market and supply areas, the next decade, Asia may become the world tobacco trade on the market the most active areas. Any company seeking to participate in the tobacco growing business in Asia to be necessary, of course, is difficult to enter the market early.

One of the most profitable industries in the world: Tobacco

The tobacco industry is one of the most profitable industries in the world. To market their deadly products, tobacco companies use their enormous wealth and influence both locally and globally. Even as advocacy groups and policy makers work to combat the tobacco industry’s influence, new and manipulative tactics are used by tobacco companies and their allies to circumvent tobacco control efforts. It is important for tobacco control advocates to know which companies are present, how and where they operate, the types and quantity of products sold, and marketing tactics used to sell tobacco products. By being informed about all aspects of the tobacco sale industry within a country, advocates are better equipped to fight the tobacco industry and its allies on multiple levels.
It is important to note that the tobacco companies typically report market data annually at least several months after the end of the fiscal year. By its nature, annual market data reported by analysts and tobacco companies are one or two years old. Therefore, general trends, forecast data, and tobacco industry positioning within the market contained here are the most recent we are able to obtain from tobacco analysts, Euromonitor International, and other sources.