The American tobacco industry is changing; the face of the tobacco industry is going back to its roots. In 1911, the then government decided that the American Tobacco Company was too large and monopolized the industry; they ordered the split into smaller companies.
The recent proposal for the purchase of Lorillard into the Reynolds American business, it is going back to before the company split, combining two of the biggest cigarette producers in America. The move will reduce costs, as savings on the production and the selling of the products will come into force, reducing the overheads of both businesses.
This gives the sales teams more options to offer their clients and this is a great time to start stocking cigarettes. Creating an online tobacco merchant account is going to allow for an increase in potential sales, by giving customers the ability to pay using their credit and debit cards.
With the rise in smokers, this includes the e-cig market, there are more people becoming addicted to nicotine and the cigarette business in America is growing in certain areas.
This is because the price of cigarettes is still relatively cheap, allowing for greater profits and an increase in prices over time. The only other market that has a similar closed market is China. Cigarette sales account for over 40% of the global market and China Tobacco produces these, both these countries have an isolated market. Not many cigarettes from other countries are able to penetrate the Chinese or American markets. In America, companies are waiting to see the price of compensation given to individuals who claim cigarettes caused illnesses. Whilst China protects its business, by refusing other brands into the country.
One major shareholder in Reynolds America is British American Tobacco, this company holds over 40% of the shares and rumor predicts a complete take-over of the company in the future.
Reynolds America is not holding onto all the brands in the merger of the two giant cigarette businesses, with Imperial Tobacco of Britain looking to procure the Winston and the Blu brands. The Winston is the closest to the Marlboro range and the Blu is one of the bestselling e-cigs on the American market.
The future of the companies trading tobacco in America might be going backward, but it looks set to end the isolation of America from the global cigarette market.
Contact us to set up your online tobacco merchant account today!