The six largest producers of American cigarettes, by U.S. market share size:
- PHILIP MORRIS COS.
(Philip Morris USA is the domestic tobacco subsidiary)
- Owns Marlboro, the most popular brand in the nation, with a 26 percent market share.
- Paid $4.5 billion in taxes in 1992 and is the largest single taxpayer in the United States.
- Spent more than $2 billion on advertising in 1992 for all of its products.
- Employs 92,000 people in the United States and 69,000 others around the world.
- Had $50.6 billion in sales last year, making it the nation’s seventh-largest corporation with profits of $3.1 billion.
- Makes 43 percent of its sales, but 69 percent of its profit, from tobacco.
- RJR NABISCO HOLDINGS
(R.J. Reynolds Tobacco Co. is the domestic tobacco subsidiary)
- Employs 66,500 people worldwide and 10,000 in the U.S.
- Made $15.1 billion in sales last year and $3.2 billion in operating income, making it the nation’s 25th largest corporation. (It posted a net loss due to restructuring costs.)
- Makes 57 percent of its sales, but 75 percent of its profit, from tobacco.
- AMERICAN BRANDS INC.
(The American Tobacco Co. is the domestic tobacco subsidiary)
[NOTE: The English firm B.A.T. Industries, which owns Brown & Williamson Tobacco Co., recently bought the American Tobacco Co. from American Brands Inc.]
- Employs 43,000 people around the world.
- Earned $470 million last year, on sales of $8.2 billion.
- Makes about half its sales, and 60 percent of its profit, from cigarettes and other tobacco products.
- LOEWS CORP. (Lorillard, Inc. is the domestic tobacco subsidiary.)
- Employs about 28,000 people.
- Earned $594 million on sales of $13.6 billion last year.
- Made 16 percent of its revenue from cigarettes; the company does not report profits by product line.
- B.A.T. Industries (Brown & Williamson Tobacco Co. and American Brands Inc. are the domestic tobacco subsidiaries.)
- Employs nearly 200,000 people.
- Earned $28 billion in revenue in 1992, with a net income of $1.3 billion.
- Made 64 percent of its revenue from tobacco, worldwide.
- BROOKE GROUP (Liggett is the domestic tobacco subsidiary.)
- Employs about 1,450 people
- Reported operating income of $5.7 million on sales of $720 million in 1992. Had a net loss of $75.8 million after deductions for discontinued operations and other extraordinary items.
- Made 84 percent of its sales from tobacco.
Source: Martin Merzer, “More Than Just Smokes,” MIAMI HERALD, April 26, 1994, p. C1.
SEVERAL TOBACCO COMPANIES IN BUSINESS WEEK’S TOP 100
BUSINESS WEEK’S annual listing of the top 1000 corporations in the United States contains several tobacco companies. The rankings are based on overall market value (all dollar values are in millions):
* Philip Morris ranked number seven, with an overall market value of $52.3 billion, a seven percent increase from last year. PM reported 12 month sales of $53776, a six percent increase from 1993, with profits of $4725, a 32 percent increase from 1993.
* RJR Nabisco Holdings ranked number 120, with an overall market value of $7659, a 2 percent decrease from 1993. Twelve month sales figures for the company were $15366, a 2 percent increase, with profits of $764.
* American Brands ranked 125, with an overall market value of $7495, a 12 percent increase from 1993. The company reported 12 month sales of $13147, a four percent increase, with profits of $885.1, a 64 percent increase from 1993.
* Smokeless tobacco maker UST ranked 167, with an overall market value of $5834, a seven percent increase from 1993. UST reported twelve month sales of $1223, a 10 percent increase, on profits of $387.5, a 5 percent increase from 1993.
* Loews, the parent company of Lorillard, ranked 170, with an overall market value of $5727, a two percent decrease from 1993, on sales of $13515, a one percent decrease, with profits of $267.8, a 55 percent decrease.
Ranked by sales, Philip Morris was number 10, and ranked by profits, it was number 5. The overall market value of tobacco was one of the “winners” of 1994, according to BUSINESS WEEK, with an increase of $4,230,000.
TOBACCO REPORTER provides more detailed financial information on Philip Morris:
* Worldwide cigarette volume rose to 757 billion units, a 15.4 percent increase from 1993. Overall volume for Marlboro rose 14 percent to 399 billion units.
* Operating revenue for Philip Morris USA increased by 8.6 percent to $11.1 billion, and operating income rose by 17.6 percent to $3.3 billion.
* Domestic shipment volume for the year was 219.4 billion units, an increase of 12.7 percent.
* Marlboro shipments in the U.S. rose 27 percent to 137.7 billion units. Philip Morris had a shipment share of 44.8 percent, a 2.6 percent increase.
* Philip Morris International reported an operating income increase of 21.9 percent to $2.9 billion on revenues of $17.6 billion, an 11.5 percent increase. Overall volume of 536 billion units was a 16.6 percent increase from 1993. 1994 marked the first year that international cigarette sales surpassed the 500 billion unit level.
* Volume increased in almost all established markets, and also in emerging markets such as Central and Eastern Europe. Volume more than tripled in Eastern Europe and grew by double- digits in Central Europe.
Sources: “The BUSINESS WEEK 1000,” BUSINESS WEEK, March 27, 1995, p. 90; “Recordbreaking Sales,” TOBACCO REPORTER, March, 1995.