In this piece, we will take a look at the top 20 countries with the highest percentage of smokers. If you want to skip our primer on the tobacco industry and countries that smoke the most cigarettes, head on over to Top 5 Countries with the Highest Percentage of Smokers.
Tobacco smoking is one of the deadliest habits anyone can form. A practice that has been in place for decades if not centuries, smoking contributes to more than eight million deaths around the world each year according to data from the World Health Organization. Most of the world’s smokers are men, and as a whole, cigarette smokers accounted for 22.3% of the world’s population as of 2020.
Like gasoline, cigarettes are also one category of products that have an interesting demand and supply curve. This curve is used in economics to gauge the impact of price changes on a product’s supply, and it generally shifts with the changes in price. Data from Dartmouth University’s Tuck School of Business shows that even large price changes often have little effect on the demand for cigarettes.
Naturally, this also provides cigarette companies with an enviable market if you disregard the unethical nature of selling a highly addictive product that can lead customers to a slow and painful death. This lucrative market has also transformed the cigarette industry into one of the largest in the world. In fact, the cigarette industry is one of the few that can rightly be called an oligopoly. And its dominance is clear from the fact that while nearly all other oligopolies – such as semiconductor fabrication, aircraft production, and oil production – all require massive capital investment, the tobacco sector is quite different.
Making cigarettes is neither technologically intense and neither does it require massive capital expenditure such as buying expensive machines made by only one company (like for instance ASML Holding N.V. (NASDAQ:ASML)’s dominance in the semiconductor industry). Despite this, most of the world’s tobacco industry is controlled by five companies. These are Philip Morris International Inc. (NYSE:PM), British American Tobacco p.l.c. (NYSE:BTI), Imperial Brands PLC (OTCMKTS:IMBBY), Japan Tobacco Inc. (OTCMKTS:JAPAF), and China Tobacco International (HK) Company Limited (HKG:6055.HK). (For a complete list of best cigarette stocks, be sure to check out 10 Best Tobacco and Cigarette Stocks To Buy) And for these companies, the countries where the most tobacco is smoked are also lucrative markets.
So how exactly do these big tobacco companies play in their markets? Research from the National Library of Medicine shows that at most, a single tobacco company can control 50% of a country’s tobacco market. The biggest tobacco company when it comes to dominating the markets of the 90 countries studied is Phillip Morris, which commands the majority of the market in 38 countries. As a whole, one company out of the five held the majority of the market in 77 countries. Delving deeper, the largest market for China Tobacco is naturally China, while for British American Tobacco, the main markets are Australia, Canada, Pakistan, and Brazil. Japan Tobacco commands the market in its home country and Russia among others. And finally, Phillip Morris is scattered throughout Europe, Mexico, and South America.
However, these days, the ‘buzz’ in the tobacco industry is all about e-cigarettes. And wary of losing its market, big tobacco is pumping big bucks into this market. For instance, Imperial Brands owns Fontem Ventures, blu e-cigarette; and Phillip Morris’ former parent Altria Group, Inc. (NYSE:MO) owns one of the world’s most popular brands of e-cigarettes, the Juul. And for good measure too, since research shows that the global electronic cigarette market is slated to grow at a whopping compounded annual growth rate (CAGR) of 30.6% between 2023 and 2030.
So what’s going on in the e-cigarette scene? Well, here is what the management of Altria Group, Inc. (NYSE:MO) had to say during a recent earnings conference:
In e-vapor, we previously announced we elected to be released from the noncompete obligations related to our JUUL investment. We retain our economic stake in JUUL. E-vapor remains the largest smoke-free category in the U.S. and the most successful category in transitioning U.S. smokers away from cigarettes. We believe the category can play an important role in harm reduction, and we’re continuing to evaluate all options to best compete in the category. Next, let’s discuss the progress we made to enhance our digital consumer engagement. We launched a new digital trade program last spring, and we believe this program enhances our ongoing commitment to responsible retail.
The program includes multiple participation options for retailers. For those participating at the highest level we introduced incentives for retailers to include age and identity verification solutions in their digital platforms. And once the consumer is verified, retailers can then provide offers and messaging from our brands within the retailer’s app. I’m excited to share that we implemented these solutions in more than 33,000 stores, exceeding the goal we outlined last year at CAGNY. Currently, consumers can view offers from our smokeable and more smokeless tobacco brands. But going forward, we expect to expand the program to include on! and other smoke-free brands. As we continue to broaden our digital reach, data will help us better understand each smoker’s journey and help them successfully transition to other smoke-free alternatives in our portfolio.
Moving to the regulatory environment. We remain optimistic about the future of harm reduction in the U.S. We believe we have an unprecedented opportunity to lead the way in shifting millions of smokers to smoke-free alternatives, if we follow the science and foster innovation with the support of reasonable regulation.
So, with these details in mind, let’s take a look at the countries that smoke the most.
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Our Methodology
To compile our list of the countries with the highest percentage of smokers, we used data from the World Health Organization (WHO) for smoking in both males and females. Estimates of GDP per capita in nominal terms are also provided to illustrate any correlation between economic development and smoking.
Top 20 Countries with the Highest Percentage of Smokers
20. Hungary
Estimate of current tobacco smoking prevalence (%): 31
Hungary is a landlocked Central European country. It has a $188 billion economy and a GDP per capita of $19,385. It has some of the lowest levels of income inequality in the world and exports large volumes of cars and associated parts.
19. Hellenic Republic
Estimate of current tobacco smoking prevalence (%): 31.3
The Hellenic Republic, or Greece is a Southeastern European country. It has a GDP per capita of $22,595 and relies to a large extent on petroleum exports to earn its foreign exchange.
18. Principality of Andorra
Estimate of current tobacco smoking prevalence (%): 31.3
The Principality of Andorra is one of the smallest countries in the world with an area of a little more than four hundred square kilometers. It has a high GDP per capita of $41,930.
17. Slovak Republic
Estimate of current tobacco smoking prevalence (%): 31.5
The Slovak Republic is another landlocked Central European country. It has a population of five million and has robust auto and electronics manufacturing industries.
16. Georgia
Estimate of current tobacco smoking prevalence (%): 31.6
Georgia is an Asian and European country with a $27 billion economy and a GDP per capita of $7,600. It thrives on the back of copper and car exports.
15. Republic of Indonesia
Estimate of current tobacco smoking prevalence (%): 32.6
The Republic of Indonesia is a Southeast Asian country that is one of the most populous regions in the world. It has a GDP per capita of $5,016 and a population of 277 million people.
14. French Republic
Estimate of current tobacco smoking prevalence (%): 33.3
The French Republic, or France, is one of the most developed countries in the world. This lends it a high GDP per capita of $44,747.
13. Bosnia and Herzegovina
Estimate of current tobacco smoking prevalence (%): 33.5
Bosnia and Herzegovina is a Southeastern European country that ranks among the smaller countries in terms of both population and area. It has a GDP per capita of $8,223.
12. Republic of Lebanon
Estimate of current tobacco smoking prevalence (%): 33.7
The Republic of Lebanon is an Asian country that is one of the poorest nations in the world that is beset by severe economic misgovernance. It has a GDP per capita of $2,785.
11. Tuvalu
Estimate of current tobacco smoking prevalence (%): 34.2
Tuvalu is an island country in the Pacific Ocean. Covering just 26 square kilometers in area, it has a GDP per capita of $2,970.
10. Republic of Latvia
Estimate of current tobacco smoking prevalence (%): 34.2
The Republic of Latvia is a Northern European country. It has a GDP of $40,588 and primarily exports agricultural products.
9. Republic of Cyprus
Estimate of current tobacco smoking prevalence (%): 34.5
The Republic of Cyprus is a Western Asian country with a high GDP per capita of $33,807. It plays an important role in the global shipping industry.
8. Solomon Islands
Estimate of current tobacco smoking prevalence (%): 35.5
The Solomon Islands is an Oceanic country made of nearly a thousand islands. It has a low GDP per capita of $2,357 and relies primarily on agricultural products for its exports.
7. Hashemite Kingdom of Jordan
Estimate of current tobacco smoking prevalence (%): 35.5
The Hashemite Kingdom of Jordan is one of the oldest countries in the world. It has a GDP per capita of $4,635, has a skilled workforce and population, but high levels of government debt.
6. Republic of Croatia
Estimate of current tobacco smoking prevalence (%): 37.4
The Republic of Croatia is a Southeastern European nation. It has a high GDP per capita and is one of the most popular tourist destinations in the world.
Click to continue reading and see Top 5 Countries with the Highest Percentage of Smokers.
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Disclosure: None. Top 20 Countries with the Highest Percentage of Smokers is originally published on Insider Monkey.