The number of cigarettes sold in the US has declined 37% since 2001. Tobacco regulations are stricter than ever, and Big Tobacco has lost high-profile lawsuits costing millions. Yet the tobacco industry has reported a 32% increase in revenue, totaling $93.4 billion in 2016. According to reporting from the Wall Street Journal, these stats have contributed to the boom:
- Cigarette prices have skyrocketed. Americans spent more on cigarettes than beer and soda combined in 2016. The reason? Smoking has become incredibly expensive. The average price of a pack of smokes has gone up from $3.73 in 2001 to $6.42 in 2016. Pricing varies by state, and a pack of unfiltered Camels in New York City can run upwards of $14.
- Competition has shrunk. To cut costs and weed out competitive pricing (which has in turn made the price hike of cigarettes so successful), the industry has consolidated. Down from seven major players in the industry, there are now two main manufacturers of cigarettes in the US: Altria (which produces Marlboros) and Reynolds American Inc. (which sells Newports). Combined, these two companies make eight of every 10 cigarettes sold today.
- Taxes remain favorable to tobacco companies. Though federal and state taxes are costly to American tobacco companies (and could increase even more), compared to other western countries, US companies are getting a deal. An average pack of cigarettes runs a smoker in Britain $10.90, 82% of which goes to taxes. Here, where cigarettes cost $4 less on average, 42% of an average pack goes to taxes.
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