Less people are smoking in the United States, but tobacco firms are still increasing their profits. This may seem like a contradiction but according to this infographic from purplebox U.S tobacco firms continue to increase their profits. While less people are smoking the actual cost per pack is far greater, and between 2001 and 2016, tobacco companies increased prices significantly. By 2016, they managed to increase their revenue by 32%.
It’s of course good to see less people smoking but the people left behind are the ones picking up the tab. Addiction is a powerful thing and most smokers need a greater reason than the price going up to quit.
While less people are smoking in the U.S, the numbers around the world seem to be increasing. In 2017, it is estimated that around 1 billion people smoke and this is projected to rise to upwards of 1.64 billion by 2025.
Tobacco has only a few major players and they are determined to protect their profits. One particularly big market is in China and a company called CNTC pretty much control things over there. In fact, they are responsible for 98% of all cigarettes sold in china and between 7-10% of government revenue is through tobacco sales. The Chinese government are in a tough position in that they rely on it for cash but they also have to deal the detrimental effect it has on the nation’s health. How much of this revenue is being spent on dealing with the associated health problems? It’s a very difficult one to navigate for the Chinese government.
Tobacco firms are very good at pivoting so when success in one market begins to wane, they will focus their efforts on other markets to ensure healthy growth. For example, British American Tobacco are facing large lawsuits from governments in Africa to cover the costs associated with past and future healthcare costs. There is simply less education about how bad smoking is for your health in African countries and tobacco firms are not afraid to exploit this. There is also far less legislation in place to control the advertising of tobacco firms so young people are more prone to getting started.
The key point of this infographic is that tobacco firms are industrious. They are willing to fight against bad publicity and look for loopholes and ways they can continue to take in massive profits. Find out all about the biggest tobacco firms in the infographic below.