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The World Demand for UK Tobacco

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Abstract

The decline in cigarette consumption within developed countries makes the exploitation of new markets particularly important to tobacco companies. UK data on exports is used to show that, by splitting the sample into three groups, income and prices have significant but different effects on cigarette import demand according to country type. Additionally the extent to which firms vary prices according to these internal circumstances in an effort to increase total consumption is examined. Stresses that, while exports to newly industrializing and oil exporting countries have risen most dramatically, markets in Less Developed Countries are also a fertile source of future sales and may provide a focus for future policy co-ordination.

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