10.6 Market share and brand share

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10.1 The global tobacco manufacturing industry

10.2 The manufacturing industry in Australia

10.3 Retail value and volume of the market

10.4 The tobacco companies operating in Australia

10.5 Major importers operating in the Australian market

10.6 Market share and brand share

10.7 Trends in products and packaging

10.8 The tobacco growing industry

10.9 The tobacco industry and the illegal tobacco market

10.10 The tobacco industry exposed: tobacco industry document repositories

10.11 Corporate responsibility and the birth of good corporate citizenship

10.12 The tobacco industry's revised stance on health issues

10.13 Encouraging young people not to smoke

10.14 The environmental impact of tobacco production

10.15 Ethical farming issues

10.16 The environmental impact of tobacco use

10.17 The tobacco industry's response to tobacco litter

10.18 Corporate links with charities and social causes

10.19 Tobacco industry lobbying—overview

10.20 Tobacco industry lobbying—the tools

10.21 Tobacco industry lobbying—the targets

10.22 Donations to political parties

10.23 Public attitudes to the tobacco industry

10.24 The future of the tobacco industry

Acknowledgments

References

BATA was the clear market leader in 2007, with 42% of tobacco sales in the grocery market and 56% in the convenience sector. Philip Morris ranked second, followed by Imperial (Table 10.15).17, 41

10.6.1 Market share by brand—cigarettes

Table 10.5 in Section 10.3 above ranks tobacco brands among other leading brands of all products sold through supermarket and grocery outlets. BATA owns three brands in the top 10 (Winfield, Benson & Hedges and Holiday), PMA owns two (Longbeach and Peter Jackson) and ITA only one (Horizon).18 Data on market share of individual brands expressed as a percentage of the total tobacco market are not publicly available for supermarket and grocery outlets, which account for about half of all tobacco sales.

Table 10.16 shows the top 10 brands ranked by share of total tobacco sales value in Australian convenience stores in 2007. BATA clearly dominates the sector with the popularity of Winfield, Benson & Hedges and Dunhill, followed by PMA, with Peter Jackson and Longbeach. ITA is represented much lower in the rankings, with Horizon and Peter Stuyvesant.17 Marlboro, the world's most popular brand5, is not a market leader in Australia. In 2007, Marlboro had about 4% of market share in sales from convenience outlets.17 BATA dominated sales through convenience outlets, with a 56% share of the total value of cigarette sales. PMA held a third of the market (33%) and ITAss had only 11%.17 The data in Table 10.16 relate only to sales via convenience outlets, which account for only 13% of the market.12

10.6.1.1 Brand preference among Australian secondary school students

National surveys of smoking prevalence and behaviours among Australian secondary school pupils have included questions about brands smoked. Table 10.17 shows the cigarette brands most commonly smoked by school students in 2005.42 Brand preference among school-aged smokers is broadly similar to that indicated by the total market share surveys shown in the preceding tables. In 2005, one in three young school-aged smokers smoked Winfield cigarettes. Since it is illegal in Australia to sell cigarettes to children under the age of 18, underage smokers are more likely to procure cigarettes from friends or the home, so brands usually smoked are likely to reflect the preferences of the older smokers around them. Other factors known to influence choice of brand among young people include price and marketing. The brands most likely to be smoked by children include products available in packs of 20 or 25, which are cheaper in price than packs of 30 or more cigarettes.42

10.6.2 Market share by brand—roll-your-own tobacco

ITA and BATA lead the RYO sector. According to data from convenience stores sales, ITA is clear market leader, with its brand mix including Champion and Drum (Table 10.18.) However, the data in Table 10.18 relate only to sales from convenience outlets, which account for 13% of the total tobacco market.17 Sales data from the combined supermarket and grocery sectors which rank brand leaders from all product categories show that BATA's Winfield is the leading RYO brand, but that ITA's sales from Champion and Drum probably give it greater overall market share in this retail sector18 (see Table 10.5, Section 10.4).

10.6.3 Market share by brand—cigars

All cigars sold in Australia are imported, and apart from BATA, the tobacco companies do not have substantial engagement in the cigar market (Table 10.19).17 Based on data on sales data from convenience stores, the importer Stuart Alexander has greatest market share, followed by Swedish Match.

Although the cigar market remains small at about 2% of the total tobacco market, cigars have grown in popularity in recent years, with an annual growth in sales volume of about 5%.43 The two most popular cigar brands, Cafe Creme (a Henri Wintermans variant) and Willem II, together hold more than 50% of the total Australian cigar market.11 Cigars are discussed further in Section 10.7.10.

10.6.4 Price bracket and pack size

The Australian cigarette market has a number of differentiating features apart from brand, including variations on flavour or blend, pack size, and price.

Although BATA is overall market leader in the grocery sector (Table 10.5 in Section 10.4) it does not lead in all segments of the market when examined by price positioning and pack size. In broad terms, the cigarette market is broken into three main price brackets: 'value', for the price conscious smoker; 'mainstream' for the middle price range, and 'premium' for the higher end of the market. Table 10.20 shows that in the supermarket and grocery sector, value brands are the most important segment in terms of percentage of cigarettes sold by volume and value, occupying about 45% of market share. Mainstream brands account for just over one third of the market, and the most expensive brands account for fewer than 20% of the market volume and value. PMA is market leader in the value sector, through the strength of Longbeach. BATA is firmly in control of the mainstream segment due to the dominance of Winfield, and also leads the premium market with Benson & Hedges and Dunhill. ITA's strongest showing is in the value sector, where Horizon ranks second to PMA's Longbeach. In both other sectors, ITA claims less than 10% of the market.41 The most popular pack size is 25s, followed by 30s. In 1999, larger pack sizes lost their appeal due to changes in the federal excise tax which eliminated the price advantage of purchasing greater quantities of cigarettes (see Chapter 13 for discussion).

In the convenience sector, 'mainstream' brands (Winfield and Peter Jackson) account for about 47% of all cigarette sales. Brands in the 'premium' bracket are next most popular (such as Benson & Hedges, Dunhill, Peter Stuyvesant and Marlboro), with about 30% of sales in total, and 'value' brands (Longbeach, Horizon and Holiday) account for about 20% of the market. The most popular pack sizes sold in the convenience sector in 2007 were 25s (about 40%), followed by 30s, 20s, and 40s.17

The recent emergence of a 'sub-value' category of cigarettes has been noted in the industry press.11 The sub-value segment includes cheaper brands and smaller pack sizes (the minimum legally permissible in Australia being packs of 20) to help meet tighter personal budgets. Imported brands from China and elsewhere are competing to supply this end of the market.11