Tobacco industry

The tobacco industry comprises those persons and companies engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. It is a global industry; tobacco can grow in any warm, moist environment, which means it can be farmed on all continents except Antarctica.

Tobacco is a commodity product similar in economic terms to foodstuffs in that the price is set by the fact that crop yields vary depending on local weather conditions. The price varies by specific species grown, the total quantity on the market ready for sale, the area where it was grown, the health of the plants, and other characteristics individual to product quality. Laws around the world now often have some restrictions on smoking but, still 5.5 trillion cigarettes are smoked each year. Taxes are often heavily imposed on tobacco.

The tobacco industry generally refers to the companies involved in the manufacture of discount cigarettes, cigars, snuff and chewing and pipe tobacco. The largest tobacco company in the world by volume is China National Tobacco Co. Following extensive merger activity in the 1990s and 2000s, international markets are dominated by five firms: Philip Morris International, British American Tobacco, Japan Tobacco, Altria, and Imperial Tobacco.

The tobacco industry in the United States has suffered greatly since the mid-1990s, when it was successfully sued by several U.S. states. The suits claimed that tobacco causes cancer, that companies in the industry knew this, and that they deliberately understated the significance of their findings, contributing to the illness and death of many citizens in those states.

The industry was found to have decades of internal memos confirming in detail that tobacco (which contains nicotine) is both addictive and carcinogenic.

The suit resulted in a large cash settlement being paid by a group of tobacco companies to the states that sued. Further, since the suit was settled, other individuals have come forth, in class action lawsuits, claiming individual damages. New suits of this nature will probably continue for a long time.

Since the settlement is a heavy tax on the profits of the tobacco industry in the US, and further settlements being made only add to the financial burden of these companies, it is debatable if the industry has a money-producing long term outlook.

The tobacco industry has been largely successful in this litigation process, with the majority of cases being won by the industry. During the first 42 years of tobacco litigation (between 1954 and 1996) the industry maintained a clean record in litigation thanks to tactics described in a R J Reynolds Tobacco Company internal memo as “the way we won these cases, to paraphrase Gen. Patton, is not by spending all of Reynolds’ money, but by making the other son of a bitch spend all of his.” Between 1995 and 2005 59% of cases were won by the tobacco industry either outright or on appeal in the US, but the continued success of the industry’s efforts to win these cases is questionable.

Lawsuits against the tobacco industry are primarily restricted to the United States due to differences in legal systems in other countries. Many businesses class ongoing lawsuits as a cost of doing business in the US and feel their revenue will be only marginally affected by the activities.

Production by country

The United Nations Foreign Agricultural Office estimates the following production of unprocessed tobacco by country in 2000.




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