Wednesday, March 3, 2010

Tobacco(Cigarette Industry)

India is the world’s third largest producer of tobacco and a very large consumer of tobacco products. Over 40 per cent of the tobacco consumed in India is in the form of bidis. Cigarette accounts for 15 per cent, while rest is divided between chewing tobacco, pan masala, hookah, snuff and other mixes. Around 80 per cent of smokers are located in urban India, while rural market continues to be dominated by bidis.
The free trade pact among SAARC nations led to easy availability of foreign cigarettes. Cigarette market consists of premium brands like Marlboro, Rothmans, State Express 555, Benson & Hedges, Dunhill and Camel.

Cigarettes is a highly concentrated sector with very few companies engaged in this business. ITC, the largest Indian tobacco products manufacturer, alone controls about 82 per cent of market share. Followed by other major companies like Godfrey Phillips India (9.7 per cent), VST India (4.9 per cent) and GTC Industries (2.4 per cent).

The industry is pre–dominantly domestic, exports being a small proportion of production. Cigarettes are classified as filter cigarettes and non–filter cigarettes. Filters help to remove 90 per cent of the nicotine content and 75 per cent of tar and other toxic materials. It also ensures no change in the original
flavour of the cigarette.

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