Overview of the development of the cigarette industry
Cigarettes are used to make shredded tobacco into strips of cigarette products. Also known as cigarettes, cigarettes, cigarettes. There are filter cigarettes and mouthless cigarettes, and there are light and strong flavors. Cigarettes began to enter the Chinese commodity market in 1890, and factory manufacturing began in 1893, with production and sales increasing year by year. Since 1980, China's cigarette production ranks first in the world. In 1989, the output was 3,195,600 boxes (50,000 pieces/carton).
There are four main types of Chinese cigarettes based on raw materials:
1 flue-cured type, using flue-cured tobacco as raw material, popular in the United Kingdom, China, India, Canada and other countries;
2 mixed type, with baking, drying and air-curing as raw materials, is now popular in the world;
3 spice type (oriental type), using oriental tobacco as raw material, popular in Turkey, Greece, the Soviet Union and Eastern Europe;
4 Sun-cured type, using dark-lighted tobacco as raw material, popular in southern Europe and some countries in Africa.
Statistical Analysis of National Cigarette Production in October
According to the statistics of the “Coiler Brand Competition Pattern and Leading Enterprise Analysis Report†issued by Prospective Industry Research Institute, the national cigarette production decreased slightly in March-April 2018, and the national cigarette production rebounded in May 2018. In May 2018, the national cigarette production was 189.35 billion, an increase of 11.1% year-on-year. The national cigarette production increased gradually from June to September in 2018. The national cigarette production fluctuated less from March to October in 2018, and the national cigarette production declined in October 2018. In October 2018, the national cigarette production was 182.46 billion, down 1.7% year-on-year. From January to October 2018, the national cigarette production was 1,978.79 billion, an increase of 2% year-on-year.
Statistics and growth of national cigarette production from January to October 2018
Source: Prospective Industry Research Institute
Statistical Analysis of Q1 Chinese Cigarette Sales in 2018
In 2017, the sales volume of Chinese cigarettes reached 234.862 billion, the production and sales rate decreased by 1.5% year-on-year, and the inventory increased by 12.9% compared with the beginning of the year. As of 2018, the sales volume of Chinese cigarettes in Q1 reached 670.264 billion, the production and sales rate increased by 5.2% year-on-year, and the inventory decreased by 11.7% compared with the beginning of the year.
Q1 China cigarette sales statistics and growth in 2016-2018
Source: Prospective Industry Research Institute
Statistical Analysis of the Average Price of Single Cigarettes in China in 2017
Price leverage and taxation policies are regarded as effective means of tobacco control. With the increasingly strict implementation of tobacco control in China, from the entry into force of the 2006 China Tobacco Control Framework Convention in China to 2015, the tax rate per cigarette in China has increased from 21.9 to 82.5. The retail price increased from 50.8 to 125.7. On the other hand, the grade structure of cigarettes continued to escalate. The proportion of cigarettes in the first and second categories in 2017 was 30% and 15% respectively, which was 3 percentage points higher than that in 2014. The average price of the box continued to rise steadily. The price increase, the smoking ban campaign, and the weakening of the cigarette gift function. Since 2015, the ad valorem tax rate has increased from 5% to 11% and the specific tax has been added to make the sales volume of traditional cigarettes decline. The production and sales volume of cigarettes has peaked.
Average price and growth of single cigarettes in the country from 2011 to 2017
Source of data: public information, prospective industry research institute
The specifications of new products are constantly increasing, and the performance of “fine, medium and short explosion†is eye-catching.
The controlled smoke campaign was launched, and a new generation of young people became a tobacco consumer group. The cigarette market showed a trend of healthy consumption and individual consumption. In recent years, the number of new product specifications introduced by the industry has fluctuated. In 2016, the number of new product specifications introduced by the industry was 168, which was about 5 times that of 2009. The new category represented by “fine and short burst†is a new impetus for cigarette sales. In 2017, the wholesale sales of fine cigarettes, smouldering cigarettes, medium cigarettes and short cigarettes in the industry were about 240, 35, 35, and 250,000 boxes, respectively. The hot sale of the new category of “fine, medium and short burst†in China's cigarette consumer market also reflects the good trend of healthy consumption and individual consumption in the market.
New requirements for policy, anti-counterfeiting and environmental protection will promote industry concentration
With the implementation of the Tobacco Convention and the State Administration of Tobacco's strategy on cultivating tobacco groups, higher requirements have been placed on the capital, technology, quality control and innovation capabilities of tobacco label companies. For example, because the state stipulates that cigarette products are not allowed to be publicized, packaging has become an important carrier for tobacco companies to transmit their brand image, which puts high demands on the design capabilities of tobacco label enterprises. The monopoly production of cigarettes puts forward higher anti-counterfeiting requirements for tobacco production, and the requirements for printing and anti-counterfeiting processes in the manufacturing process are also significantly higher than other printed packaging products. In addition, the traditional cigarette label printing uses aluminum foil composite or PET film jam, which is difficult to degrade. Traditional ink paper contains harmful volatile substances, which is harmful to health. The environmental health trend also requires the tobacco label enterprises to upgrade.
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