Tobacco Industry Facts, Lawsuits and Profits

by Nelson Chamiz

Until recently the tobacco industry is one that has enjoyed unprecedented growth and profits. The reason for this prosperity has been largely to do with the general ignorance of the dangers of smoking tobacco by the generality of users.

Even though anti smoking groups were working hard to oppose smoking,for many decades the ingredients used in tobacco manufacture were never made public. The turn of events in the mid-90s led to a new chapter in the fight against tobacco.

It became public knowledge that tobacco companies had up to 4000 compounds and over 500 additives in cigarettes. Of the 4000 compounds produced on tobacco combustion, at least 60 of them are cancer causing carcinogens.

This gave strength and encouragement to individuals acting alone as well as class actions in the form of tobacco lawsuits. Victims and families of victims of tobacco related cancer and disease brought before courts serious tobacco litigation cases.

Even though tobacco litigation had started in the 1950s plaintiffs started becoming consistently successful in 2000 in the United States. Lawsuits were being launched because tobacco companies knew about the effects of smoking but failed to warn the public. The first successful lawsuit was when Philp Morris was ordered to pay $51 million to a California victim with inoperable lung cancer.

More tobacco opposing research became the norm. Smoking laws and anti-smoking legislation rapidly gathered momentum to the extent that by end of 2009 up to 38 states in America had banned smoking in public places and employed tough anti-tobacco policy regimes.

Due to its sophistication, the tobacco industry was accused of manufacturing doubt in order to protect its threatened market. This would involve own scientific research that would put into question mainstream science against tobacco usage. The public would then be caught in a valley of indecision many ignoring mainstream warnings.

In terms of profits the United States outlook remains strong. Tobacco companies simply passed the burden of increased excise tax to individual smokers. In 2009 total industry profits increased.

Tobacco usage has been declining in most of the developed world. As a strategy, the focus is shifting to developing countries with weaker tobacco regulations. In the United States in 2010 tobacco consumption was projected to decline by 4% to 5%. This is an accelerated decline as compared to other years.

In the league of developed countries, Japan still has a higher smoking prevalence than other countries. Statistically 40% of men and 13% of women still smoke in Japan. The new focus on developing countries has seen China gaining 3 million new smokers a year with a total national smoking figure of 350 million.

To maintain profits and protect their business in the face of fierce anti smoking campaigns, some tobacco companies are moving into stop smoking products. This was demonstrated by an American tobacco company which bought a Swedish company producing stop smoking products.

Today China is the biggest world tobacco market and tobacco marker. The government collects 8% of its total tax revenue from tobacco. Annual tobacco industry profits in China stand at some US$60 Billion. China consumed 1.2 trillion cigarettes in the first 6 months of 2009.


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