Industry Analysis & Industry Trends
While tobacco product manufacturing in Australia is restricted to two companies, competition is fierce. Heavy government regulation makes it very difficult for players to thrive, leading the companies to become battle hardened in their tactics. Demand for cigarettes has declined over the past five years as increasing health concerns, anti-smoking campaigns, increasing regulations and higher excise taxes discourage smoking. Recent regulatory restrictions include state bans on indoor smoking, state retail display bans and the introduction of plain packaging in December 2012. Plain packaging is expected to have a significant effect on the industry, leading revenue to decline by 4.4% in 2013-14 to reach $1.8 billion... purchase to read more
Industry Report - Starting a New Business Chapter
Barriers to entry into the industry are high. There are two manufacturers in the industry and imports account for 11.2% of domestic demand. Entry into the industry is constrained by the long-term decline in household expenditure on tobacco products. Existing companies are competing for market share in a declining market. In addition, brand loyalty is high and prevents new entrants from gaining market share. Regulations on advertising also make it very difficult for a new entrant to establish its own brands. This is being further constrained by the introduction of retail display bans in several Australian states and territories.
Due to the nature of the products and the relatively small Australian market, production economies are not significant... purchase to read more