UK cigarette consumption is expected to fall at an annual rate of five per cent, according to fresh research from Mintel.
The market intelligence report shows that consumption sank 11 per cent between 1989 and 1994. But the drop is expected to accelerate because of a mixture of anti-smoking campaigning, increasing excise duties and a growth in cross-border smuggling. By contrast, the value of the cigarettes sold in the five-year period has fallen to only four per cent. But Mintel also believes that more smokers will trade down to cheaper brands.
The research comes as the new voluntary agreement between the Government and tobacco industry on tobacco advertising comes into force, and as the two sides in the health battle prepare for a Commons showdown over cigarette advertising.
Advertising expenditure has dropped 31 per cent, from £53m to £36.5m since 1990, and will continue to fall as tighter restrictions come into force on poster ads this year. The Mintel report identifies direct marketing as the area most likely to benefit from the tighter restrictions.
Gallaher remains the dominant player in the market with a 41 per cent stake by volume but its main rival, Imperial Tobacco, has increased market share to 35 per cent. However, both have suffered falls in volume sales of 15 and three per cent respectively since 1990.