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Cigarette and Tobacco Product Manufacturing in Australia Industry Market Research Report Now Updated by IBISWorld
Date:7/27/2014

Melbourne, Australia (PRWEB) July 27, 2014

Although Cigarette and Tobacco Product Manufacturing in Australia is restricted to two companies, heavy government regulation results in extremely fierce competition. According to IBISWorld industry analyst Spencer Little, “Demand for cigarettes has declined over the past five years due to rising health concerns, frequent anti-smoking campaigns, increasing regulation and higher excise taxes.” As a result, industry revenue is estimated to fall at a compound annual 0.8% over the five years through 2014-15. Revenue is forecast to drop by 3.8% in 2014-15 to reach $1.8 billion. Smoking tobacco has been proven to cause a range of health issues such as lung cancer, throat cancer and respiratory diseases. Industry products therefore cannot be advertised and must be sold in plain packaging that includes health warnings. Excise taxes, which are excluded from the industry's cost structure, have risen over the past five years. However, profitability has increased over this period, as manufacturers have been able to increase cigarette prices due to the relatively inelastic demand for tobacco products.

Over the next five years, the industry is anticipated to continue struggling. Tobacco product manufacturers are expected to continue to face rising government regulation. “Further declines in the national smoking rate will also reduce the size of the market,” says Little. As a result, prices of cigarettes and other tobacco products are projected to rise, in order to offset falling demand. The popularity of unpackaged tobacco and roll-your-own cigarettes is anticipat
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