Giant Tobacco Companies Could Face Big Losses

Published on April 19th, 2013 00:00

Cigarette companies aren't going to expect a prosperous future taking into account that U.S. markets decreases. At the moment China has considerably more cigarette users than the United States has people, with greater than 350 million smokers, primarily men, in accordance with the World Health Organization. India has 274 million smokers, which also include nearly all smokeless tobacco consumers in the world, at 205 million.

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Russia has the greatest smoking rate among men, at 60.2 %, and the largest smoking rate among youngsters. The Tobacco Atlas reports that profits from the worldwide tobacco industry reaches a half trillion U.S. dollars yearly. If cigarette manufacturers were a country, it would possess the gross domestic product of such countries as Poland, Saudi Arabia, Sweden and Venezuela. The Chinese government seems to have a monopoly on smoking production and regulates 38 % of the world cigarette market, more than twice that of its closest rival, Philip Morris International.

China National Tobacco produced $91.7 billion in profit and $16 billion in revenue in 2010. Students in Chinese schools are exposed to pro-tobacco propaganda. Some communications even associate tobacco use with academic success, as outlined by WHO research. Cigarette manufacturers even make use of revolution. According to WHO, when Hosni Mubarak's government in Egypt was overthrown and smoking restrictions ceased, tobacco manufacturers moved to advertise smoking as a way to display newly gained freedom. Tobacco executives firmly insist that they are not attracting new smokers in emerging countries but instead are stimulating cigarette users to move to their cigarette brands - the identical argument used for years in the United States.

The New York Times revealed in 2010 that companies, such as Philip Morris International and British American Tobacco, struggle against restrictions on advertisements in Britain, larger graphic health warnings in South America and greater cigarette taxes in the Philippines and Mexico. The cigarette manufacturers are also investing billions on marketing promotions in Africa and Asia. Nevertheless, as Forbes magazine remarks, as the health care costs of smoking increase, even emerging countries are resisting.

Forbes claims that, beginning June, Russians will be prohibited to light up in restaurants, and all cigarette advertising will be restricted. For instance, in 2011 China prohibited smoking in restaurants, bars and some other establishments, and plans to bar cigarette use in practically all public places by 2015. This is creating a discord in the government as it weighs the income from the state-run tobacco industry against the health costs of tobacco consumption. The majority of smoking restrictions in China are overlooked, according to a reliable source. India prohibited smoking in almost all indoor places in 2008, although observance has been leger.

By Joanna Johnson, Staff Writer.
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