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Competitive research on market size of cigarette brands

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  1. Introduction
  2. The tobacco industry in India
    1. Industry background
    2. Recent happenings and its impact on the industry
    3. Annual per capita adult cigarette consumption
    4. Woes of the tobacco industry
  3. The present scenario
  4. Company profile
    1. ITC's diversified status
    2. Key points
    3. History of ITC Ltd
    4. The core competencies
  5. The major Competitors of ITC Ltd
  6. Business diversification
    1. Cigarettes/ tobacco
    2. Specialty paper and hotels
  7. Earnings sensitivity factors
  8. Financial review: A research
  9. SWOT analysis of ITC Ltd
  10. Market survey and interpretation of the survey
    1. Findings from the survey
    2. Recommendations and limitations
  11. Conclusion
  12. Bibliography

The cigarette industry in India is dominated by 4 players - ITC, Godfrey Phillips, VST (also a BAT affiliate) and GTC. These four companies together control almost 99% of the market. The cigarette industry faces competition mainly from the unorganized sector 'bidi' manufacturers, who are protected from high duties due to small-scale industry status. Affected by steep duty hikes, the industry has been facing stagnant volume growth in the last 2-3 years. Cigarette sales dropped by 4% in volume terms in FY00. The 2000-01 budget also hiked excise on all types of cigarettes by 5%.

Based on the contribution form various products, ITC's business can be divided into three main divisions, namely cigarettes, tobacco and agri-products. ITC's mainstay of earnings is cigarettes (87%) and tobacco (3%). Agri-products business contributes 5% of the total Rs80bn revenues, while other businesses of hotels, paper and packaging collectively contribute the balance 5%.

Tobacco today is the largest contributor to Indian excise collections. Despite that the industry has been getting step-motherly treatment by the central government. The industry has been facing regular increase in excise duty on cigarettes in every budget for past so many years. The cigarette industry in particular has been suffering both at the hands of central government as well as state governments. In CY12/00 also the cigarette industry was again made a scapegoat and a proposal for additional levy of 1% on cigarette manufacturers was made to pay for the lackadaisical approach of government regarding unregulated tobacco crop. Last year (CY12/00) a number of big events like crop holiday for the current year, proposals of additional levy on cigarettes etc. dominated the industry scenario.

[...] In such a scenario of rising taxes and decreasing consumption, any further imposition of levies or taxes on the cigarette industry seems unjustified. So I think the government should give a glance to these aspects and should try to see the situation from cigarette industry's point of view before finalizing any proposal PRESENT SCENARIO ?Scotch is not a mass product any where in the World. What the scotch player will not say but do realize it that the scotch market in India is even not self sustaining.? While the wine industry accounts for less than one percent of the tobacco industry in India, it boasts of a growth of 25 percent per year. [...]


[...] All cigarette factories have ISO 9002 quality certification. ITC's Tobacco Technology Centre at Peenya, Bangalore has the distinction of being the first independent R&D centre in India to get ISO 9001 accreditation. The Kolkata factory has won the Rajiv Gandhi National Quality Award (Best in Eastern Region) for 1998. SISTER CONCERNS COMPANIES A. IN INDIA ITC Bhadrachalam Paperboards Ltd ( 56.00 BFIL Finance Ltd ( 99.99 BFIL Securities Ltd ( 99.98 MRR Trading & Investment Ltd ( 99.98 ITC Hotels Ltd ( 71.23 Srinivasa Resort Ltd Bay Island Hotels Ltd Greenace Holding Ltd Fortune Park Hotel Ltd ( 99.99 Russell Credit Ltd ITC Infotech Ltd All India Tobacco Company Ltd Elan Enterprises Ltd ITC Global Holdings Pvt Ltd Brands . [...]


[...] The Company today manufactures some of the most popular cigarette brands in the country like Red and White, Four Square, Jaisalmer, Cavenders, Tipper and Prince. Gallaher Asia Limited The Company's roots date back to 1857 when Tom Gallaher started a business making Irish roll tobacco in Londonderry, Northern Ireland. In 1900, Queen Victoria awarded Gallaher a Royal Warrant, and in 1928 it became a public company for the first time. The first major acquisition took place in 1936 with Senior Service, then J.R. [...]

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