Impact On The UK Tobacco Industry

Abstract

This essay seeks to identify the impacts on the UK tobacco industry based on the political and social life factors, then analyze the impacts on the sales of the UK tobacco industry under the political restrictions and globalization trends and figure out the strategies that tobacco industry has carried out to improve their competitiveness when they are facing the challenges.

Introduction

At the present, the UK tobacco industry is continuously uncertain due to the increasingly more regulations were implemented which also includes introducing the plain packaging laws. In the tobacco market, under the increasing high prices and rising taxation, the economy cigarettes brands has become the second choice of customers. Thus, the British

As it can be seen from the data in Figure 1.1, the Scotland was by far the highest aged 18 and over smoker rate country in the UK, with about 20.3% of smoker in 2014. England and North Ireland has got the similar rates (18% and 18.2% respectively), while a slightly higher proportion was found in the Wales (around 20.3%). The data shows that the disparity exists in between deferent regions in the UK.

It is also easy to notice that a significant disparity exists in the smoker percentages between different types of occupations where routine and manual workers got almost triple (around 30%) than the managerial and professional employees (about 10%), whereas intermediate labourers had double the proportion of routine and manual workers, which shows that the basic-level staffs smoke more than executive-level officer due routine and manual staffs mainly work on the physical tasks which requires more methods to shift their attention in order to relieve the pressures (Figure 1.2).In addition, as table Figure 1.3 shows, the price of tobacco products including duty has maintained to a constant increasing trend since 1997 until

Adding tax on the tobacco then gradually become one of the main sources of revenue for government, thus the government definitely would like to hold the high tax rate which was about 89 percent of cost for a packet cigarettes. (politics.co.uk, 2015) Meanwhile, the high taxation implemented in the cigarettes has caused a significant decline in the consumption of tobacco goods, also boots the competition within the industry. As a result, consumers might change to the lower price tobacco brands which will lead to a strike to most of the top brands tobacco firms. Besides, according to the Policy Smoking, the government has held the non-smoke events to motivate smokers to eradicate smoking addictions which includes proposing people stop smoking in their houses and private cars, ban young people under 18 smoking and emphasising how the second-hand smoking adversely effects their teenagers and families. (Ellison, 2013) All the actions they did will play a effective role to restrict people consuming cigarettes, and smokers may begin to realize the harms of smoking not only for economy but also for their own health and others. Therefore, the market spaces for tobacco products tend to be more and more narrow, because of that people are mentally rejecting the unhealthy products.