Bad smoke: Increasing excise taxes will pose a threat to the industry

The Cigarette and Tobacco Product Wholesaling industry in Canada surpassed major obstacles and has succeeded in adapting to new consumer trends and client procedures. Federal and provincial governments have levied higher excise taxes on cigarette products in an effort to raise tax revenue and reduce tobacco consumption. To sustain profit margins amid declining sales volumes, cigarette manufacturers have consistently raised prices on their products. Traditional merchant wholesalers have contended with strong competition from large-scale cigarette manufacturers that also wholesale their tobacco products within the Canadian market. This phenomenon has led to significant restructuring and an overall stagnation in employment over the past five years...read more.

Industry Statistics & Market Size
Revenue
$8bn
Annual Growth 14-19
3.4%
Forecast Growth 19-24
Profit
Employment
2,795
Businesses
232

Industry Threats & Opportunities

  • Disposable income will foment demand for alternative tobacco products and wholesale prices will keep increasing
  • The industry is characterized by high trade volumes and thin profit margins
  • The number of industry enterprises is forecast to grow
  • Industry Report - Industry Investment Chapter

    Reflective of the broader nondurable goods wholesaling sector, the Cigarette and Tobacco Product Wholesaling industry in Canada has a moderate level of capital intensity, and IBISWorld estimates that industry operators typically spend $0.25 on capital investments for every dollar spent on wages. Wages and salaries represent the industry's labour costs, while depreciation is used as a proxy for capital. Common capital expenditures for industry operators include investments in warehousing facilities and distribution vehicles. Though the initial investment required to establish a wholesaling warehouse is high, these operations require minimal ongoing capital investments since few additions to plant and equipment are needed. Rat...purchase to read more.

    Additional Insights for the Cigarette & Tobacco Product Wholesaling Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cigarette & Tobacco Product Wholesaling Industry are

  • Economies of scale
  • Having relationships with key markets
  • Automation - reduces costs, particularly those associated with labour
  • IBISWorld analysts also discuss how external factors such as Percentage of smokers and Demand from beverage and tobacco product manufacturing in the Cigarette & Tobacco Product Wholesaling industry impact industry performance..

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    What's in this report

    What is the Cigarette & Tobacco Product Wholesaling Industry?

    This industry acquires packaged cigarettes and other tobacco products from manufacturers and sells the goods to various retail stores, such as supermarkets, convenience stores, specialized tobacco stores and bars. They may also sell to other wholesalers. The sales and distribution offices of tobacco product manufacturers are included in this industry.

    Industry Products
  • Premium cigarettes
  • Midpriced cigarettes
  • Economy cigarettes
  • Other tobacco products
  • Industry Activities
  • Distributing cigarettes
  • Distributing cigars
  • Distributing fine-cut tobacco
  • Distributing e-vapor products
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Percentage of smokers
  • Demand from beverage and tobacco product manufacturing
  • Consumer spending
  • Population

  • Current Performance
  • Competition and industry structure
  • Profit and participation
  • Trends in tobacco
  • Chart: Revenue Growth

  • Industry Outlook
  • Continual structural changes
  • Adjustments to new demand conditions
  • Table: Cigarette & Tobacco Product Wholesaling Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cigarette & Tobacco Product Wholesaling Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Supermarkets & Grocery Stores in Canada
  • Convenience Stores in Canada
  • Beer, Wine & Liquor Stores in Canada
  • Pharmacies & Drug Stores in Canada
  • Gas Stations with Convenience Stores in Canada
  • Small Specialty Retail Stores in Canada
  • Vending Machine Operators in Canada
  • Bars & Nightclubs in Canada

  • Key Selling Industries
  • Cigarette & Tobacco Manufacturing in Canada

  • Products & Services
  • Midpriced cigarettes
  • Economy cigarettes
  • Premium cigarettes
  • Other tobacco products
  • Chart: Cigarette & Tobacco Product Wholesaling Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Convenience stores
  • Gas stations
  • Supermarkets and other grocery stores
  • Other
  • First Nation reserves
  • Chart: Major Market Segmentation for the Cigarette & Tobacco Product Wholesaling Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesOther
  • Chart: Cost Structure Benchmarking – Sector vs Cigarette & Tobacco Product Wholesaling

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cigarette & Tobacco Product Wholesaling Industry

  • Industry Globalization
    Imperial Tobacco Canada Limited, Core-Mark Holding Company Inc.,
  • Table: Imperial Tobacco Canada Limited - financial performance
  • Table: Core-Mark Holding Company Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Cigarette & Tobacco Product Wholesaling Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Cigarette & Tobacco Product Wholesaling Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • Percentage of smokers (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Chewing Tobacco
  • Shredded strips of tobacco leaf, often sweetened, that are consumed by placing a portion of the tobacco between the cheek and gum or upper lip teeth and chewing.
  • Cigarillos
  • Long cigars, slightly thicker than a cigarette but thinner than a traditional cigar. Cigarillos are consumed orally just as cigars are.
  • Dissoluble Tobacco
  • Strips, sticks, orbs and compressed tobacco lozenges that are finely processed to dissolve on the tongue or in the mouth.
  • Electronic Cigarette
  • A battery powered personal vaporizer or electronic nicotine delivery system that produces a smoke-like nicotine aerosol consumed in the lungs.
  • Fine-Cut Tobacco
  • Finely cut strands of tobacco also known as shag, rolling tobacco, loose tobacco, baccy or rollies. Fine-cut tobacco is used to make hand-rolled cigarettes using rolling papers.
  • Snuf
  • Fine-ground tobacco that is inhaled or sniffed into the nose.
  • Snus
  • A moist powder tobacco product that is placed under the lip for extended periods of time.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Cigarette & Tobacco Product Wholesaling market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Cigarette & Tobacco Product Wholesaling:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cigarette & Tobacco Product Wholesaling market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Cigarette & Tobacco Product Wholesaling, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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