10.0 Introduction

Last updated: May 2019 

Suggested citation: Winstanley M, Freeman B, Bayly M, Scollo M. 10.0 Introduction. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 20196. Available from https://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-0-introduction

The selling of tobacco is a globalised operation resulting in a global health burden.1 In only a few nations (e.g. China, the US, Japan and Egypt) is the tobacco market controlled by companies headquartered in that country.2 Tobacco companies may be either government operated or publicly traded companies. As of 2014, 24 countries had major  tobacco monopolies or significant state ownership of tobacco companies, including Algeria, China, Egypt, Iran, Iraq, Japan, and Thailand. These seven countries are among the 50 largest tobacco markets in the world. Most countries with significant state ownership or monopolies are located in the Eastern Mediterranean (including the Middle East) and Western Pacific regions (including Asian Pacific countries such as China and Japan). In 2011, state-owned tobacco markets accounted for approximately 40% of world cigarette consumption. (When excluding China this figure is only about 5%.)3 Government ownership alone is not always predictive of a lack of resolve to implement strong tobacco control measures. For example, the Thai Tobacco Monopoly is government owned, yet Thailand is internationally recognised as having one of the world’s most advanced tobacco control programs.4 Privatisation of formerly state owned tobacco companies has been shown to lead to decreased cigarette taxes, overturned tobacco control legislation and increased tobacco consumption and prevalence.5, 6

The global tobacco industry is now primarily concentrated in the hands of five tobacco companies that collectively control almost 80% of the world’s tobacco market, four of which are publicly traded corporations. Market share concentration is increasing, with larger companies acquiring small operators.7 Cigarettes account for 92% of the total tobacco market, with cigars, smokeless tobacco, and ‘other smoking products’ each accounting for 2-3% of the market. The global tobacco industry was estimated to produce more than 5.5 trillion cigarettes in 2018.7 The biggest single consumer market is China, where the industry is state owned, with approximately 300 million smokers who accounting for more than 40% of the global total. North Asia also accounts for 48% of the tobacco production market, of which the majority is located in China. Accordingly, China National Tobacco Company represents approximately 45% of market share in the global tobacco industry. Four international tobacco companies—Philip Morris International (including Altria), British American Tobacco, Japan Tobacco, Imperial Tobacco and Altria Group—account for some 36% of the global market, or about two-thirds of the total tobacco market outside China.

i There are only a very small number of privately-owned tobacco companies.

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1. Haustein K-O and Groneberg D. Society, politics and the tobacco industry. In Haustein, K-O and Groneberg, D, eds, Tobacco or Health? Physiological and Social Damages Caused by Tobacco Smoking. Springer e-books, 2010. 411–31. Available from: https://springerlink3.metapress.com/content/g8571304413tu081/resource-secured/?target=fulltext.html&sid=p5vwkv45auw2nlzc4dirmfbz&sh=www.springerlink.com

2. Physicians for a Smoke-Free Canada. The global tobacco economy: A snapshot of economies of multinational tobacco companies and of international tobacco control efforts in 2008. Ottawa: Physicians for a Smoke-Free Canada, 2009. Available from: http://www.smoke-free.ca/pdf_1/GlobalTobaccoEconomy-2009.pdf

3. Euromonitor International. Meeting the new challenges — corporate strategy in tobacco. London: Euromonitor International, 2011, [viewed 10 August 2011] . Available from: http://www.euromonitor.com/tobacco

4. World Health Organization. Tobacco industry interference with tobacco control. Geneva: WHO, 2009. Available from: http://whqlibdoc.who.int/publications/2008/9789241597340_eng.pdf

5. Gilmore AB and McKee M. Exploring the impact of foreign direct investment on tobacco consumption in the former Soviet Union. Tobacco Control 2005;14(1):13–21. Available from: http://tobaccocontrol.bmj.com/cgi/reprint/14/1/13

6. Gilmore A, Fooks G and McKee M. The International Monetary Fund and tobacco: a product like any other? International Journal of Health Services 2009;39(4):789–93. Available from: http://www.ncbi.nlm.nih.gov/pubmed/19927416

7. IBISWorld Pty Ltd. IBISWorld Industry Report C1131-GL: Global Cigarette & Tobacco Manufacturing. IBISWorld Industry Report, Melbourne, Australia: IBISWorld, 2018.