By Meghna

That cigarette you are holding in your hand, have you ever wondered how much is it worth? You’re probably going to say Rs. 12 or Rs. 13, but, it is going to cost you a lot more. You might want to rethink about smoking that cigarette.

In 2012, one cigarette cost Rs. 7 to the consumer and the cost of manufacturing that very cigarette was as low as 59 paise! This amounts to roughly 8.42 % of the price paid by the consumer.

Presently, while the consumer pays approximately Rs. 12-13 for one cigarette stick, the cost of manufacturing would lie approximately between Re. 1 to Rs. 3. Even after you add taxes and other logistical charges, the profit margin remains huge.

The cigarette market of India is mostly dominated by the corporate giant ITC. It is one of the most profitable industries and rakes in huge profits each year owing to the huge margins with the tax-evaded money so diligently paid by the smokers.

Cigarettes can quite literally burn a hole in one’s pocket.

In addition to tobacco being an excessively addictive substance, the brands too have enticed the unassuming consumer and have lured them into smoking.

There was a time when the image of Marlboro man was so deeply engrained in the minds of the general public that reportedly ‘Life’ magazine ran a full double page advertisement with an image of the Marlboro man without any caption and yet the people could recognize the advertisement and the image.

It is also a fact that four of the models who were part of the ‘Marlboro Man’ ad campaign died of smoking-induced diseases. Even that couldn’t hurt the brand value.

Cigarettes are omnipresent. Be it in the hands of handsome cowboy models or your favorite cartoon characters and at a subconscious level, these advertisements can be potent enough to make you think about it or create a positive notion about smoking.

In India, there is a ban on advertising of cigarettes and the advertising can only be done at the points of purchase, i.e by the shops selling cigarettes.

Tobacco – A lucrative industry

India is home to 25 million cigarette smokers, 100 million beedi smokers and 120 million users of smokeless tobacco. Such huge numbers of tobacco users make India the second largest tobacco consumer in the world, though India accounts for only 8% of the total tobacco produced world over.

Chewing tobacco and beedis are highly addictive and contain high amounts of carcinogens (cancer causing substances). High percentages of consumers make this industry highly lucrative. To meet the high demands and to ensure an adequate supply, the industry hires a large work force also.

Tobacco industry directly or indirectly involves 7 million workers and has a direct impact on Indian economy. In addition to this, it earns US $900 million of foreign exchange. Thus, any ban or restriction imposed on this industry will not only affect the workforce, but will also have a grave impact on the annual revenue generated by the country.

Tobacco Industry and Cancer health Industry- diametrically opposite ends of a vicious circle

It is a known fact that tobacco consumption causes cancer. This information is not just available on the tobacco products but is also conveyed through commercials, ads and what not.

Despite this, the tobacco consumption hasn’t decreased.

According to a report published in the National Journal of Medical Research, between the years 2002-03, India spent approximately Rs 300 billion (US$ 6.2 billion) on the treatment of tobacco-related illnesses.

Another report states that in the year 2011, the public spent Rs. 16,800 crores on treatment of tobacco-related illnesses. This was 1.6 per cent of the 2011’s GDP and is 12 per cent more than the combined expenditure on health made by states and Central government in the same year.



source: tradingeconomics.com

The tobacco industry is huge all across the world. In fact, the annual revenue generated by it is more than the per capita income of most of the African countries. The total revenue of China National Tobacco (CNT) – the world’s richest tobacco products company, was more than US $91 billion.

On the other hand, GDP of Namibia for the year 2014 was only $13.3 billion which is roughly 1/7th of CNT’s total revenue.

Smoking is a serious problem which needs to be tackled. In a time where tobacco companies earn more than nations, tackling the issue becomes exceedingly difficult. The fact remains that the number of people affected by smoking/tobacco consumption related diseases won’t come down as long as these products are readily available and easily accessible by the people.

It is a vicious circle as cancer health industry is fuelled by the tobacco industry. A smoker first spends a considerable amount on tobacco products and then he/she spends a fortune on treatment of tobacco-related disease.

So each time you light a cigarette, you burn away not just a chunk of your money, but also your life.