7. Companies in the Market

SUPPLY SIDE

I have made many references to Philip Morris and BAT as being the two large tobacco companies that are scoring out of the anti-tobacco legislation.

Here is a page from the WHO site that explains where these companies operate and how big they are. The data refer to 1999 – i.e. the turn of the century.

Click on the map to see it full size, or click here to go to the source.

Map from WHO

Map from WHO

  1. The dominance of Philip Morris (especially in USA) and BAT (in rest of the world) is very clear here.
  2. It appears here as if they have a combined market share of 31%, but this is only because the purple areas are included in the calculation. These are state monopolies, with China being a state monopoly of 2 billion people. The state monopolies account for 40% of the world’s cigarette consumption. If these were not included in the calculation of Philip Morris and BAT’s shares then their share would double to about 60% of the world consumption – an effective duopoly.

Now read the text on the left:

“From the late 1990s, the IMF has pressurised countries such as the Republic of Korea, the Republic of Moldova, Thailand and Turkey to privatize their state tobacco industry as a condition of loans.”

Here is the point that I have been building up to in all the previous chapters!

Why is the World Health Organisation’s sister organisation, the International Monetary Fund making it a pre-requisite for loans that the cigarette industry in a country need to be open to competition from an USA company and a UK company?

In these times that Wall Street is being occupied because 1% of Americans own the wealth of 40% of the world should there not be concern about this wealth being used to open countries to a drug that increases cancer?

In fact – is the IMF using the US’s money to loan to these countries? No. No, it is an international fund and the USA is one of the countries that is the deepest in debt at the moment.

Something stinks!

DEMAND SIDE

Cigarette consumption is increasing by about 3.4% per year world-wide. This is made up of two trends: a decreasing trend in developed countries and an increasing trend in developing countries.

(Link to Source.)

You might be more interested in the specifics for your country go here.

Here are a few countries that I find interesting:

Greece: 3017 cigarettes per adult per year,

Spain: 2225,

Japan: 2028,

Switzerland: 1698,

China 1648,

Italy: 1596,

Turkey: 1499,

Denmark: 1495,

USA: 1196,

Australia: 1130,

United Arab Emirates: 1092,

France: 876,

UK: 790,

South Africa: 511,

Mexico: 470,

Kenya: 167,

DR Congo: 131,

Nigeria 103,

India 99,

Zimbabwe: 86,

Zambia: 71.

Yes, it might be true that the trend in the developing countries is on the increase, however, they have a very long way to go before they smoke as much (per capita) as the developed countries on the top of this list.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s