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United Kingdom smoking tobacco market: £1.5 billion industry in 2011
Smoking Tobacco in the United Kingdom - a new market research report on 2014-03-24 12:39:01
The United Kingdom smoking tobacco market continues to be dominated by Imperial Tobacco, which accounted for 51% volume share in 2011. The company?s strength comes from leading brand, Golden Virginia which alone held 34% volume share in 2011. The company also offers a number of other strong brands, including Drum, Gold Leaf, Golden Virginia Yellow and the newly-launched JPS in RYO tobacco and St Bruno in pipe tobacco. The remainder of sales is mainly split between Gallaher Group, which accounted for 38% of volume sales in 2011, mainly derived from Amber Leaf; and British American Tobacco with 10% volume share, mainly derived from Cutters Choice.

In 2011, smoking tobacco achieved sales growth of 10% in volume terms and 14% in current value terms. While growth remains strong, it slowed in comparison to 2009 and 2010 as sales matured and increased from a higher sales base. Ongoing difficult economic conditions in the UK continue to impact on consumers, whose disposable incomes remain under strain. Many consumers already chose to trade down from cigarettes to RYO tobacco in previous years. However, there continued to be migration from cigarettes to RYO tobacco in 2011, resulting in further growth for the category.

Ongoing economic difficulties in the UK and stronger taxation on cigarettes will continue to encourage consumers to trade down to RYO tobacco, albeit at a slower rate than that seen over the review period. As a result, growth in the category will continue to be driven by RYO tobacco. Further increases in tax rates on tobacco will meanwhile result in constant value growth remaining stronger than volume growth for smoking tobacco overall.

Key Headlines

- 10% volume and 14% current value growth from 2010 to reach 5,580 tonnes and £1.5 billion in 2011
- Growth stimulated by consumers demanding value for money tobacco products as well as by major cigarette brands developing RYO tobacco
- RYO tobacco sees only growth with 11% volume and 15% current value growth in 2011
- Imperial Tobacco loses three percentage points in volume share from 2010 but retains dominance with 51% share in 2011
- 6% volume and 7% constant value CAGR expected for forecast period

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Mike King
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