<strong>One in Every Two Cigarettes Will Be Smoked by Chinese Consumers by 2018</strong>

Source from:  CBS MarketWatch 05/28/2014

Global market research company Euromonitor International released today new research on the tobacco industry. As one of the world's most valuable fast moving consumer goods industries, totalling US$800 billion globally, the tobacco industry is at a crossroads with seven of the top 10 global markets posting volume declines in 2013.

China remains the largest and one of only three top 10 markets where cigarette volumes have not declined, with $205 billion sales in 2013. China and the other two growth countries amongst the top 10, Indonesia and Vietnam, managed to offset the volume declines in all other top 10 markets, adding a combined 60 billion additional sticks in 2013.

"Is the tobacco industry in terminal decline?" asked Zora Milenkovic, Head of Global Tobacco Research at Euromonitor International. "The answer is yes, it's heading that way. Euromonitor's latest data for 2013 shows volume declines of around 4% globally last year, excluding China, and also shows two of the largest markets for cigarettes in the world after China - Russia and the US - losing a combined total equivalent to the entire annual sales of Bangladesh in the next five years."

Illicit trade grew by 5% to account for one in 10 cigarettes consumed globally, while RYO (roll-your-own) tobacco will feature the highest growth as cigarette smokers migrate to cheaper variants despite increased taxation in its largest markets. Illicit trade is set to exhibit double digit growth in developed markets over the next five years, with only Asia-Pacific, skewed by Chinese declines, set to buck the general trend towards illicit growth across all regions.

E-cigarettes are the one area that all tobacco manufacturers are seeking to expand. The global e-cigarettes and vapour market are expected to be worth US$7 billion by the end of 2014. "Although no-one is entirely convinced of e-cigarettes within the tobacco business, no-one wants to be left out in case it revolutionises the industry," says Milenkovic. Enditem