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The Canadian
cigarette market, once characterized by a unitary price structure, has
been transformed into one where cigarettes are sold at widely varying
prices. There are several categories of cigarettes now
available in Canada.
-
Illegal
cigarettes sold from native reserves
These sell for as little as 10 cents each (or $20.00 for a bag of
200)
-
Illegal
cigarettes (sometimes counterfeit) imported from other countries
-
Discount brands produced by small tobacco
companies and sold in regular stores
These sell for about 20 - 25 cents each
-
Roll your own
tobacco or tobacco sticks manufactured by major tobacco companies
Cigarettes manufactured from these cost about 25 cents each.
-
Discount brands produced by major tobacco
companies (the companies have two-tiers of these products)
These sell for about about 25 - 30 cents each.
-
So called premium brands manufactured by
major tobacco companies
These sell for about 35 - 45 cents.
 |
 |
 |
 |
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Illegal |
Discount Brand
Manufacturer |
"Value for Money"
BAT brand |
"Premium" RBH brand |
The development
of a legal market for discount cigarettes began about five years ago,
when the major tobacco companies reduced prices to fend of competition
from upstart brands made by very small manufacturers (previous to this,
the three major companies had controlled virtually all the sales in
Canada). The competition is now also between the major brands, each of
which has a significant, if not major, part of its market in discount
brands.
 Although
sales are declining for both 'discount' and 'premium' brands of
cigarettes, the declines have been faster for premium brands, as the
illustration from
Rothmans Annual Report 2006 illustrates.
Rothmans
estimates that about 50% of cigarettes legally sold in Canada are in the
"discount" category, up from only 6% five years ago. According
to the February 2006 YCM Report, discount brands are especially popular
in Atlantic Canada and Quebec. In Quebec, the three leading
discount brands (Peter Jackson, Mark Ten and Number 7) account for 40%
of cigarette sales.
For information on the best-selling
discount brands and their market share, see a recent report on
market share: |
