Tobacco Companies

In recent years, publicly traded tobacco companies have consolidated through privatization and mergers. Today there are five major private tobacco companies: Philip Morris International, Altria/Philip Morris USA, Japan Tobacco International, British American Tobacco, and Imperial Tobacco. In addition to these corporations, there are sixteen state-owned tobacco companies that are the leading cigarette manufacturers in specific countries. China National Tobacco Corporation is the largest state-owned tobacco company, producing more cigarettes than any other company in the world. In 2008 CNTC manufactured 2.1 trillion of the 5.9 trillion cigarettes produced worldwide.

As the tobacco market has consolidated under a few major companies, the direction of these companies is beginning to change. Traditionally, company buyouts took place in order to consolidate and expand cigarette market share. Now tobacco companies are branching out into other areas of tobacco products and technology. In recent years, the major tobacco companies have purchased corporations that produce oral tobacco, such as snus. In 2011 Philip Morris International bought patent rights to a technology that delivers nicotine-infused aerosol. In the same year, British American Tobacco established Nicoventures, a separate company dedicated to creating alternative nicotine products that offer the same experience expected from cigarettes without some of the risks of smoking.

Estimates of revenues from the global tobacco industry vary widely but are likely approaching half a trillion dollars annually. Although tobacco is ultimately a financial burden on the governments and health-care systems of countries, it is also a source of government revenue, through tobacco taxes and additional profit for those countries with state-owned tobacco companies. Each year the tobacco industry in China contributes over 7% of the central government’s total revenue. If Big Tobacco were a country, it would have a gross domestic product (GDP) similar to that of Poland, Sweden, Venezuela, or Saudi Arabia.

Research Says:

These companies remain some of the most profitable in the world. This is thanks in part to their endless inventive ways of undermining and circumventing regulation.
Anna Gilmore, University of Bath, UK, 2011


Altria Group has outperformed the S&P 500 every year since 2000 and has increased its dividend 44 times in the last 42 years. Its scale, balance sheet strength and improved operational focus make the company a compelling consumer products investment opportunity, and enable the company to have large-scale economic impact.
Altria website, US, 2011

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    Chart: Global Cigarette Market Share
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    Chart: Tobacco Company CEO Compensation
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