Industry Review

1. TOBACCO INDUSTRY
-Kunika Singhal

2. CONTENTS Overview
 History
 Type of Industry
 Nature of Industry
 Sub Industries
 Export
 Major Companies
 SWOT Analysis
 Product Line
 Future Strategy
 Political Issues


3. OVERVIEW OF INDUSTRY
•The Tobacco Industry is a set of corporations
that grow, sell and distribute tobacco and related
products throughout the world.
•Barriers to entry in this industry are relatively
high, though, due to govt restrictions on
marketing and advertising. Therefore, a small
number of companies serve this market.
• Tobacco Industry is now mainly focusing on
young adults.

4. HISTORYTobacco cultivation has a history of about 8000
years.
Europeans were introduced to tobacco when
Columbus landed in America in 1492.
Portuguese traders introduced tobacco in India
during 1600. Tobacco became a valuable commodity
in barter trade and its use spread rapidly.
Gradually tobacco got assimilated into the cultural
rituals and social fabric due to presumed medicinal
and actually addictive properties attributed to it.

5. Tobacco Industry falls under the primary
industry as it comprises those persons
and companies engaged in the growth,
preparation for sale, shipment,
advertisement, and distribution
of tobacco and tobacco-related products.
TYPE OF INDUSTRY

6. NATURE OF INDUSTRY
India is the third-largest tobacco producer in the world,
with annual production of about 800 million kgs.
The major exportable variety, Flue Cured Virginia (FCV)
tobacco, is produced mainly in Andhra Pradesh and
Karnataka, with production in 2014–15 totalling 297
million kgs.
This has led to India emerging as a leading exporter of
FCV tobacco globally.

7. SUB –INDUSTRIES
 Leaf Tobacco Industry :
The Leaf Tobacco Industry is
involved in the growing & ageing
of leaf tobacco.
Tobacco Products Industry :
It includes the manufacturing of
commodities,mostly cigarettes
fine cut tobacco, for final
consumption.

8.  Exports of Indian Tobacco rose at a CAGR of 9.0 per cent
to US$ 918.9 million in 2014–15 from US$ 502.2 million in
2007–08.
 In 2014–15, India exported 246 million kgs of tobacco
and tobacco products.
 India ranks third in terms of production of tobacco and
in exports, after Brazil and the US.
 Indian tobacco is exported to about 100 countries.
 India exports unmanufactured tobacco primarily to
Western Europe, South and Southeast Asia, East Europe
and Africa. Western Europe is the key market for Indian
tobacco exports.
EXPORT

9.  ITC
 A-One Beedi
 Azad Bidi
 Kanhayya Tobacco Co. Ltd
 Kothari Products Limited (KPL)
 M.R Tobacco Pvt Ltd
 Sapna Enterprises
 Sri Jayalakshmi Tobacco Co Ltd
 Tej Ram Dharam Paul
MAJOR COMPANIES

10. SWOT ANALYSISStrengths
1.Distribution network well in place.
2.Variety of Brands.
3.Most companies are financially
sound.
4.Addictive in nature.
Opportunities.
1.International market.
2.Market penetration.
3.Women’s market.
4.Cigarettes to bidi making which is
bigger.
.
Threats.
1.Declining market.
2.Heavy taxes and duties.
3.Growing anti-smoking
movement.
4.Entry of global brands.
5.New government restrictions.
6.World Health Organization
Weakness
1.Hazardous Product.
2.Causes various forms of
cancer.
3.Social Taboo.

11. Cigarettes Pan Masala Mouth Freshners
Bidis ChuttaKretek
PRODUCTS

12. Khaini Mawa
Nasal Snuff

13.  Tobacco companies have designed their
products to attract new users, almost all of whom
are children.
 Their internal documents discuss ways of
reducing the harshness of their products and how
to make them more appealing to new users,
especially with the use of flavorings.
 With their colorful packaging, various flavors,
and frequent placement near candy displays in
retail outlets, cigars can easily be mistaken for
candy by adults and children alike.
FUTURE STRATEGY

14. Tobacco is used by the youth all over India with a wide
range of variation among states.
Two in every ten boys and one in every ten girls use a
tobacco product.
Initiation to tobacco products before the age of 10 years is
increasing.
There are currently about 240 million tobacco users aged 15
years and above (195 million male users and 45 million
female users) in India.
TOBACCO USE AMONG YOUTH
Tobacco industries are mainly focusing on Youngsters due to
following reasons:

15. Ban on smoking in public places(including indoors).
Ban on direct and indirect advertising of tobacco products
Ban on sales to minors
-Tobacco products cannot be sold to children <18 years
-Tobacco products cannot be sold within a radius of 100 yards of
educational institutions
Pictorial health warnings
English and one or more Indian languages to be used for
health warnings on tobacco packs
Testing and Regulation: Ingredients to be declared on
tobacco product packages (Tar and Nicotine)
INDIAN LAW-AT A GLANCE