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THE CHINA NATIONAL TOBACCO CORPORATION: A PLAYER WITHOUT COMPETITORS

The China National Tobacco Corporation - the larger cigarettes maker in the world - (hereinafter “Tobacco Corporation”), plays a monopolist role in the Chinese tobacco market and is owned by the Chinese government. Indeed, Tobacco Corporation has a market share, which is higher than the one of its five main competitors.

Tobacco Corporation in 2013 manufactured 2.5 trillion cigarettes entirely addressed for the Chinese market. Moreover, this giant registered an increase in the revenues even if its competitors decreased the production levels. Tobacco Corporation employs almost more than 500.000 Chinese and plays an essential role in Chinese economy.

However, the Chinese government has recently proposed strong campaigns against tobacco consumption, due to the high death rate for smoking- related diseases. This action did not affect the monopolist role of Tobacco Corporation, which is strongly involved even in schools and in the education projects.

On the contrary, the general manager of Tobacco Corporation, Mr Ling Chengxing announced a prevision of increase of the 8% with regard to the contribution to the government. As a consequence, the economic dependence of the Chinese government is a huge obstacle in the fight against tobacco consumption.

 

The gLAWcal Team

LIBEAC project

Monday, 1 January 2015

(Source: Bloomberg Business Week)