TOBACCO INDUSTRY IN TURKEY. PREPARED BY VESİLE KUTLU 2001431033 Z.BEYDA GÜNAL 2001431015. OUTLINE. TOBACCO INDUSTRY IN THE WORLD The History of Tobacco in the World Place of Tobacco in the World TOBACCO INDUSTRY IN TURKEY MARKET STRUCTURE Domestic & Multinational Firms
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VESİLE KUTLU 2001431033
Z.BEYDA GÜNAL 2001431015
TOBACCO INDUSTRY IN THE WORLD
The History of Tobacco in the World
Place of Tobacco in the World
TOBACCO INDUSTRY IN TURKEY
Domestic & Multinational Firms
Government Policies on Tobacco Industry
Based on Written Agreement
Based on Auctions
Comparisons of the Firms
CONCLUSION AND RECOMENDATIONS
The History of the Tobacco:
Consumption of Tobacco
China produces 1.979.000 ton in 2002 with 34,8 % and takes the first place.
Turkey produces 161.310 ton with %2.84 production percentage and takes the 6th place within 5.688.490 total production.
The Share of the Export of Tobacco in Total Exports and Agricultural Products
The table below shows that, although the share of tobacco export in total export decreases it takes an important place in export of Agricultural products
As the table below indicates the Productivity of Tobacco is high enough depending on planted Field and Production between the years.
The most important and general good of tobacco is cigarette for producers.The market contains 2 types of firms:
1. Domestic Firm
2. Multinational Firms
Tekel 2000, Tekel 2001, Samsun, Maltepe Yeni Harman, Meltem,Ballıca, Bafra,Bitlis, and Birinci
The Employment of the Firm:
At the end of 2000 it was 2.092.163 on average; it increased by 2 times to 4.443.371 on average at the end of 2004.
It can be resulted that,TEKEL has an important contribution to the economy of the country which ca not be ignored.
Philip Morris SA
Monte Carlo and Aspen.
“Finding an effective way to enter the Turkish market, which is one of the largest in the world with total sales of some 100 billion cigarettes, has been one of British American Tobacco’s strategic priorities. This project provides us with an excellent opportunity for profitable growth.”
BAT Chairman Martin Broughton
Important points while making proper production planning
Both domestic and imported cigarettes are taxed in Turkey
Tobacco provides sustantial tax revenues to goverments especially in developing countries
In 1981, the warning “Harmful to Your Health” was
printed on cigarette packages. In 1996, a new law came into
effect which includes the points as follows:
of 18 is forbidden
on all packages of tobacco products
transportation vechiles is forbidden
Marketing Process of Tobacco
As it can be inferred from the table below the number of producers begin to decrease after the tobacco production is based on written agreement in 2002
Some problems with this method after applying in 2003:
Export of TobaccoMajor importers of Turkish Tobacco are United States, Canada France, Switzerland and GermanyTurkey exports 55 % of tobacco produced in each year
Export of TobaccoAs it can be inferred from the table, there are fluctuations in both quantity and value of exports. Although the amount exported in 2003 is more than that of in 2001, its value in 2001 is greater because of valuable foreign exchange
The Amount of Tobacco Exported both Domestic and Private Companies between the Periods 1995-2001The increase in exports of private sector may stem from their growing share intobacco market
Import of TobaccoAfter 1990s Turkey begins to import tobacco because of the demad for American blend cigarettes, now has 2.3 % share in world’s tobacco imports. It mainly imports from United States, Switzerland, France, Canada, and South Africa
PricingIn the past the prices of purchases supporting tobacco were in line with inflation rate but in the last years they are lower than inflation rate
Market Share of Existing FirmsMarket share is an important criterion in order to measure the performance of existing firms in industry. From 1999 to 2005 the market share of firms has changed. By the years the share of Tekel becomes small and the share of Philsa is growing
Comparison of Market Share between Existing Firms in TurkeyIn 2002, BAT enters the industry and market share of it is growing by the years. In 2005, BAT has 5 % share and Philsa is the second biggest company in the industry.
Comparison of Employment Level of Existing Firms in Turkey Althoughthe market share of private companies is incraesing, the number of people hired by them is not hihg enough compared to Tekel which hires 96 % of people working in tobacco industry.
ConclusionWhy Tobacco Industry in Turkey has an important contribuiton on economy?
In order to reach equilibrium among production, and consumption, stocks, it is necessary to have a proper production planning.
The requirements of agreement made between tobacco producers and trades are determined by only traders. Producers should build cooperatives in order to represent all producers and protect their rights against the other parties.