Smoking the competition

09:20, November 09, 2010      

Email | Print | Subscribe | Comments | Forum 

The nation's tobacco monopoly plans to cut the number of domestic cigarette brands to less than 20 by 2015, in a bid to compete with overseas rivals.

  That means China National Tobacco Corporation, which owns all domestic cigarette makers, will have to eliminate over 80 existing brands in just five short years.

  The plan is to pit two brands, Double Happiness and Hill of the Red Pagoda, up against the likes of Philip Morris brands Marlboro, Virginia Slims and Parliament.

  China National Tobacco said Monday on its website that its Qinghai branch will "cultivate" these famous brands.

  The goal is for each brand to sell up to 5 million cases annually by 2015. That's a lofty goal considering Double Happiness sold just 1.64 million cases last year and Hill of the Red Pagoda sold 2.17 million. The company expects sales from at least one of those two brands to top 100 billion yuan ($14.97 billion) a year.

  Additionally, the firm wants six total brands to bring in more than 60 billion yuan ($8.98 billion) each, and for a further six to each bring in 40 billion yuan ($5.95 billion).

  "Improving the competitive edge of the whole industry is our goal," Jiang Chenkang, head of the China National Tobacco Corporation, said earlier this year.

  According to the American Cancer Society, China National Tobacco controls 32 percent of the global cigarette market - almost as much as Philip Morris and British American Tobacco combined.

  Despite the fact that the Chinesetobacco industry handed over profits and taxes worth a whopping 513 billion yuan ($76.28 billion) to the State last year, not one domestic brand was able to compete with foreign giants on the global stage.

  Back in 2002, China National Tobacco merged many of the nation's 123 cigarette producers, drastically reducing the hundreds of brands flooding the market. The result was a 10 percent jump in sales for 30 percent of the producers.

  Han Liang, sales manager of a cigarette shop on Guanghua Road, told the Global Times Monday that he sells about one carton of Marlboros a month, compared with 40 to 50 cartons of Hill of the Red Pagoda.He sells Marlboro for 15 yuan ($2.23), compared with 7.5 yuan ($1.12) for Hill of the Red Pagoda. "Most consumers still prefer smokes under 10 yuan ($1.49) a pack."

Source: Global Times


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion