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Tobacco's Surprise Rebound in US

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发表于 4-25-2017 15:56:47 | 显示全部楼层 |阅读模式
Jennifer Maloney and Saabira Chaudhuri, Tobacco's Surprise Rebound; Booming US cigarette makers shrug off regulation and the decline of smokers by boosting prices. Wall Street Journal, Apr 24, 2017 (front page).
https://www.wsj.com/articles/u-s ... perience-1492968698
http://www.theaustralian.com.au/ ... 1cc7e60f31839fa3386

Quote:

"Far fewer Americans are smoking [panel 1 of the graphic shows decrease unfailingly every year], and yet US tobacco revenue is soaring, thanks to years of steady price increases [by manufacturers]. Americans spent more at retail stores on cigarettes in 2016 than they did on soft drinks and beer combined, according to independent market-­research firm Euromonitor International. Consolidation and cost cutting are boosting profit. Big Tobacco shares are on a roll. * * * Cigarette makers found they could more than make up for falling volumes with higher prices.

"The number of cigarettes [individual cigarettes, not pack of cigarettes -- as panel 3 of the graphic demonstrates] sold in the US fell by 37 per cent from 2001 to 2016, according to Euromonitor. Over the same period, though, companies raised prices, boosting cigarette revenue by 32 per cent, to an estimated $US93.4 billion ($123.5bn [in Australian dollar, which naturally does not appear in Wall Street Journal]) last year. An average pack in the US cost an estimated $US6.42 in 2016, up from $US3.73 in 2001, ­according to TMA, an industry trade group.

"The operating profits of US tobacco manufacturers have grown 77 per cent since 2006 to $US18.4bn in 2016, according to Bank of America Merrill Lynch Global Research. Industry executives and analysts now figure the country generates more tobacco profits than any other market in the world outside China, where a state-run monopoly controls sales and prices.

"The [tobacco] industry [in US] sells 5.5 trillion cigarettes each year to the world's one billion smokers. In many ways, the US has become attractive again * * * Taxes are often lower in the US than elsewhere in the developed world, according to World Health Organisation data. About 42 per cent of the average US pack price is tax, according to TMA. In Britain, meanwhile, taxes make up 82 per cent of the average pack, which sells for about $US10.90, or about $US4 more than the average US price, according to Britain's Tobacco Manufacturers’ Association. Thanks partly to the First Amendment [specifically freedom of speech, whihc in US includes freedom from being forced to say you do not want to; however, US suppreme court ruled a company has less first amendment right than a human], US tobacco makers also aren't constricted by some of the more stringent branding and health-warning rules introduced elsewhere. In Britain and Australia, cigarettes are sold in drab, greenish-brown packs with a large health warning and a graphic photo

"China is by far the world's biggest market, where state-owned China National Tobacco 中国烟草总公司 sells 44 per cent of the country's cigarettes.

Note: Accompanying the report is a graphic whose heading reads, "Smoking Hot Returns." The graphic is locked behind a paywall.  The graphic has six panels, where panels 5 and 6 are as follows.  
(5) Price breakdown for a pack of Marlboros, 2016:
Manufacturer operating profit (20%), components (18%), Other (4%), Retailer/wholesaler mark up (17%), State (26%), Federal (16%)
                                                                                                                                                                     l-----------Excise tax--------l
(6) Around 80% of US cigarette sales belong to two major companies

Shares of cigarette sales in the US, 2015:
Altria (46.6%): Marlboro (40.2%) + L&M (3.6) + Virginia Slims (1.1) + Parliament (1.0) + Basic (0.7)
Reynolds American (33.6%): Newport (13.2%) + Camel (8.6) + Pall Mall (8.2) + Natural American Spirit (1.8) + Doral (1.5) + Misty (0.2) + Ca[ri )0.1)
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