Cigarettes remains the dominant product category, highlighting limited progress of tobacco harm reduction to date

In 2019, cigarettes accounted for 94.6% (USD261.1 billion) in value and 94.4% (4.8 trillion sticks) in volume of high-risk product sales for the companies in the index. Between 2017 and 2019, global cigarette volume sales declined from 4.9 trillion to 4.8 trillion sticks (-1.2% CAGR) for the 15 tobacco companies in scope. This level of change is unlikely to result in a meaningful public health gain, nor will it lead to an end to smoking within this generation.

About half of all cigarettes volume sales are attributed to a single manufacturer, China National Tobacco Corp (CNTC). Beyond CNTC, the four biggest international players – Philip Morris International Inc (PMI), British American Tobacco Plc (BAT), Japan Tobacco Inc (JTI), and Imperial Brands Plc (Imperial) – account for a further 40.4% of total cigarettes volume sales in 2019. Cigarettes volume sales of BAT (-4.5% CAGR) and PMI (-3.7% CAGR) are declining faster than the index average -1.2%. Conversely, JTI and CNTC have registered a positive CAGR in cigarette volume sales of 1.6% and 0.3%, respectively. Other companies that primarily operate in their domestic markets – Eastern Co SAE (Eastern), Gudang Garam Tbk PT (Gudang Garam), ITC Ltd (ITC) and Vietnam National Tobacco Corp (Vinataba) – have similarly increased their sales of cigarettes, registering consistent single digit year-on-year volume growth.

Companies committed to tobacco harm reduction will have to proactively limit and ultimately stop the sales of cigarettes altogether by offering consumers reduced-risk alternatives, rather than counting on the natural decline of the category. So far, no company hast taken this path.

The conflicting dynamics of cigarettes sales between high-medium and low-medium income countries further limits progress toward tobacco harm reduction. The top 15 manufacturers have registered a 1.2% rate of volume decline for cigarettes in high-medium income countries, while in low-medium income countries there is a 1.7% growth. International companies that have increased their cigarettes sales in low-medium income countries the most are KT&G Corp (KT&G) (26.1% CAGR) and JTI (16.9% CAGR), yet both had declining cigarettes sales in high-medium income countries. Furthermore, Eastern, Gudang Garam, ITC, and Vinataba – companies that each operate in a single low-medium income market – have all grown their cigarette sales. In high-medium income countries, the most notable declines in cigarettes were registered by Tobacco Authority of Thailand (TOAT), which contracted by 19.6% CAGR due to domestic tax hikes and loss of market share, followed by Altria Group Inc (Altria)’s 6.6% decrease, a reflection of the shrinking cigarette market in the US.

Companies committed to tobacco harm reduction will have to proactively limit and ultimately stop the sales of cigarettes altogether by offering consumers reduced-risk alternatives, rather than counting on the natural decline of the category. So far, no company has taken this path.

For a complete list of sources and references, download the full Index Ranking report.

Product Sales Ranking

Note: * Performance indicators calculated as negative indicators – indicators are of type “lower is better”. For example, a higher “Volume Sales of High-Risk Products” clearly has a negative impact on tobacco harm reduction.

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