Tag Archives: health care costs related to smoking

The Smoke Economy – How Big Tobacco Keeps Growing

Fewer people are smoking – that means tobacco companies are making less money, right? Unfortunately, according to this infographic from purplebox; tobacco companies are pulling in record profits despite lower sales. It is, of course, fantastic that the number of cigarettes being sold in the U.S fell by 37% between 2001 and 2016, but since 2006, the operating profits of US tobacco manufacturers have increased by 77% to a massive $18.4 billion.

Tax on Cigarettes

The tax on cigarettes in the U.S is 42% and this is actually quite low relative to places like the UK who tax cigarettes at 82%. Interestingly, both California and New York are looking to increase the tax on cigarettes. It will likely be the customer who foots the bill here as if you’re addicted to smoking; you simply have to pay whatever price is being charged.

Smokers Increasing

When you consider the world as a whole, the number of smokers is actually going to increase from 1 billion right now to 1.64 billion by 2025. Tobacco companies are always willing to pivot and they can target new markets if they feel others are starting to wane.

For example, one big name is British American Tobacco and they have recently been targeting the less educated African markets. They are currently facing lawsuits related to past and future health care costs related to smoking.

Expensive Habit

The tax will likely continue to go up on cigarettes but unfortunately, an addiction is powerful and people can’t simply quit when the price of a pack goes up by $2. They will generally make cutbacks in other areas of their lives to pay the extra cost. Tax on cigarettes is a good thing but for the smokers left behind; it can turn into an extremely expensive habit to feed.

Read more about how the smoke economy continues to grow in the following infographic:

The Smoke Economy