How Much Does it Cost to Make Cigarette and Cigarette Companies Profits

On this post we wanted to show you how much does actually cigarettes costs to produce, how much tax you are paying on pack of cigarettes and how much profit does the biggest manufacturers of cigarettes makes.

Pricing

As annual report of Philip Morris (2012) shows to make one pack of Malboro Gold company is spending around Twenty six dollar cents. Also another report from R. J. Reynolds Tobacco Company (2012) shows that to make a packet of Winstow Light cigarettes company is spending less than 23 dollar cents. The list could go on and on but we think that you already got the clue about it. 

Taxes on cigarettes and tobacco

Here is a list of cigarette Taxes in EU Ireland - 78%, UK - 77%, France - 80%, Estonia - 67%, Latvia - 83%, Greece - 73%, Czech Republic - 78%, Hungary - 80% (Tobacco Manufacturers' Association, 2012)

To make it clearer of how much TAX and VAT smokers are paying here is an example: lets assume that person smokes 1 pack of cigarettes a day, so in whole yaer he or she will spend 2682.75 pounds from which 2112.53 pounds will go to government because of Duty, Tax and VAT (Richard Browning, 2012). UK are getting big revenue from duties and VAT of cigarettes. Here is some statistics - UK tax revenue from tabacco in 2010-2011 = 11.1, 2011-2012 = 12.1. (HM Revenue & Customs (HMRC) / TMA, 2012)

Companies who are making biggest profits from cigarettes

There are big amount of different tobacco manufacturer companies in our planet. But we will focus on Imperial Tobacco Group Plc., Japan Tobacco International, British American Tobacco (BAT) and Philipp Morris International. So ‘Imperial Tobacco Group Plc.’ is the 4^th largest cigarette producer in the world and they have the  largest market in cigarette, hand rolling tobacco and rolling papers. They market share in UK is 45% and they made £1,896m operating profits in 2011. (Imperial Tobacco Annual Report, 2011)  The strongest and biggest asian tobbaco company is ‘Japan Tobacco International’ which is the 3^rd largest tobacco company in UK. JTI sold 563 billion cigarettes during 2011this number is 10% of cigarettes which was sold in global market. The company reported an operating income of US$4,439m in year 2011. (Japan Tobacco Inc. Annual Report, 2011) Just a bit more profit then JTI  in 2011 received ‘British American Tobacco’ company which is the 2^nd largest tobacco company in the world, the company cigarette market share in UK is 8% . BAT sold 705 billion cigarettes and made an operating profit of £4,721 millions during 2011. (British American Tobacco. Annual Report, 2011)  ‘Philipp Morris International’ is the biggest tobacco company in the world, they produce the best known cigarrete brand ‘Marlboro’. The company cigarette market share in UK is 7%.  The total amount of cigarette consumption in UK between 2010 and 2011 is 45678 million. (ASH Fact Sheet, August 2012)