Gallaher Ltd, Imperial Tobacco Ltd and Rothmans (UK) Ltd are the main manufacturers supplying the UK market and are increasing their export trade. British American Tobacco (BAT), the world's second largest tobacco company, is based in Britain.

Following the completion of the merger of BAT with Rothmans, the combined company will have a global market share of 16%, just behind the US company Philip Morris which has 17% of the world market.

Gallaher produces three of the four top-selling UK brands: Benson and Hedges, Mayfair, and Silk Cut.  Imperial Tobacco produces the leading UK brand Lambert and Butler.  Other brands produced by Imperial include Superkings, Regal, and Embassy.

Sales

Sales of duty-paid tobacco products in the UK amounted to 62 billion cigarettes, 2.7 million kg of hand-rolling and pipe tobacco, and 1 billion cigars in 1999.

This figure is declining as bootlegging and smuggling increases.  In 1998, BAT, one of the largest companies in the UK, made a profit of £1,011 million.

Value

The value of domestic sales for all the tobacco products listed above amounted to £12.1 billion.

Tax

Cigarette taxation in the UK is the highest in the world, making cigarettes, on average, more than twice as expensive as elsewhere.  People in the UK spend about 12 billion pounds on cigarette products of which nearly 10 billion is tax.

Advertising and sponsorship

Tobacco sponsorship of sport in the UK is worth about £7.5 million a year.  In 1998 a European Union Directive to ban tobacco advertising was agreed, resulting in a gradual ban on tobacco advertising and promotion.  Point-of-sale advertising will remain subject to domestic legislation (1998 European Union Tobacco Advertising Directive). By 2006 there will be a complete ban on all tobacco advertising and sponsorship throughout the EU.

Government funding to stop smoking

In England and Wales the Government has set aside £110 million to help change public attitudes about smoking and reduce its health toll.

Revenue

The UK Government earned £10,305 million in revenue from tobacco duty and VAT in 1997 - £8,390 million in excise duty and £1,915 million in VAT.

Subsidies

The UK contributes to the EU's subsidised tobacco industry.  In 1997 the EU spent £998 million ECU (£735 million), £5,370 for each of the 135,000 tobacco growers.  A high proportion of tobacco grown in Europe is unmarketable and is sold at give-away prices to Eastern Europe and Africa.

03/06/2009