Tobacco profits up in smoke

TOBACCO sales in Spain have plummeted over the last five years, according to the tobacco industry.

Whereas Spaniards smoked up to 90 billion cigarettes in 2009, this number has dropped dramatically over the course of the last half decade to 47.5 billion: a decrease of 47 per cent in sales.

Notwithstanding a general trend for healthy living in recent years, there are several political and economical factors that experts have attributed to the decline.

Tough anti-smoking laws have made the opportunity to light up in public more complicated throughout Europe, and although the Spanish are blessed with suitable outdoor-smoking weather throughout much of the year, it seems that many smokers have taken the hint that not everyone welcomes smoke in the air.

Economically speaking, tax hikes and the credit crunch have tightened belts. Where people could previously afford to burn money on cigarettes, they are now having to reassess their priorities.

A knock-on effect to the hit taken by big tobacco has been the increase in small, low-cost producers’ market share. Packets costing no more than €4.10 are now dominating 11 per cent of the market, and other options including rolling tobacco and E-cigarettes are muscling in on the market too.

Smuggling is another major thorn in Big Tobacco’s side. The European Union recently asked both Spain and the UK to investigate Gibraltar’s role in tobacco smuggled into Spain.

It is estimated that 8.8 per cent of all tobacco smoked now in Spain comes in illegally, tax free, and that figure jumps to 11.3 per cent when legal duty-frees are taken into account: a stark contrast from the 2.5 per cent in 2009, and amounting to roughly €718 million in lost taxes every year.

The tobacco industry has launched a campaign to educate people in how supporting smugglers can damage the economy as a whole. It will be interesting to see if this campaign will be met positively or not by the general public.